Part I of our series, "Turning Purpose to Profit"
The internet and globalization have commoditized every available product other than the most customized, personalized, high-end professional and retail services. Unless you are cheaper than anyone else, your market will shrink. And if you are cheaper than everyone else, your profits will shrink. This is the new business reality.
This new reality started developing a couple of decades ago. On November 6, 2005, the The New York Times featured a piece on how the Goliath (i.e., Walmart), was trembling in fear of the emerging David -- Google. Less than ten years ago, Google was a small upstart compared to Walmart, and Amazon was just an on-line bookstore. Today, almost anything you need can be delivered to your door the next day with a single click on Amazon Prime. How do you compete with such extreme levels of convenience and efficiency?
In this environment, improved efficiencies -- a necessary, entry-level requirement -- will not alone secure margin growth. The key to growing margins lies not in the products you produce, but in your ability to overlay your products with an intangible dimension that satisfies some of the deepest needs for which people crave. Yet, far more management energy has been directed towards increasing efficiencies rather than thinking about the real differentiators responsible for growth and margin protection.
This efficiency drive, with its often brutal cost-cutting and relentless automation, brought advantages to consumers but not always profitability to businesses. The road to efficiency, paved with new technologies, is strewn with wrecks of businesses -- and even industries -- that were obliterated along the way. It doesn't take long in an environment of instant diffusion of information for one company's improvements and innovations to become entry-level requirements for everyone else. Innovative products quickly become mass-produced commodities as the Internet facilitates consumer awareness of lower priced opportunities.
What is our defense? On the threshold of a new post-infotech era, exhilarating opportunities abound for us to move beyond the commodity game. We need to continue managing and improving efficiency, but we also have the opportunity to reshape the future. Any business can create a unique offering immensely more valuable to its customers than any mere commodity could possibly provide. Customers are saturated with material choices, but their starvation for more "spiritual," human nourishment and well-being represents the biggest business opportunity of our time. Civilized society has built superb social and economic structures to provide most people with some level of material security. The average person's dignity, however, is assaulted a thousand times during their daily activities. People's souls, craving greater meaning, erode in the pursuit of the very consumerism that oils the wheels of business. Your business needs to recover its soul so that it does not lose its edge.
Here are five new perspectives that might help you discover and recover your company's soul in ways that will satisfy the deeper needs of your customers:
- REFRAME the meaning of the term "value." The value of a transaction should no longer be defined only by price, convenience, and quality. Value should also be considered by the degree to which the transaction satisfies people's deeper emotional and spiritual needs.
- REGARD your tangible product or service not as your end product, but rather as a vehicle by which to deliver a much more valuable, intangible product to your customer: the experience of true human dignity.
- ENGAGE your customers' minds, hearts and souls. Engage their minds with your tangible product, its price, and its features. Captivate their hearts with your brand and nourish their souls with the dignity you give to them.
- CREATE your tangible product with your business process and operation, but create the intangible dimension of your product with the culture of your people.
- NURTURE your culture. Authentic culture cannot be copied by your competitors and will deliver more value to your customers than inauthentic advertising.
The authenticity of your culture is as crucial to your business success as is the effectiveness of your strategy and the efficiency of your process. For people to feel dignified as human beings and not merely valued as your customers, they need to experience this authentic caring. It cannot be faked! Unfortunately, in an attempt to standardize procedure, many business practices inhibit the experience of genuine human dignity on the part of the customer. Standard procedure improves efficiency and protects reputation, but leaves little with which companies can truly differentiate themselves in their markets.
The companies who reshape the future and dominate it will be those who develop complex new human skills, deeper multi-cultural understanding, and a far higher prioritizing of human values and people's spiritual aspirations as the center stage of their strategic thinking.