What’s Your Strategy? Operational Excellence, Product Leadership or Customer Intimacy?

Dec 2, 2013

In the Discipline of Market Leaders by Michael Treacy and Fred Wiersema, we learned about the importance of being clear about your strategic priority. What unique value do you bring to the marketplace and your customers? In this book, they describe three strategic priorities of operational excellence, product leadership and customer intimacy.

Companies that focus on operational excellence don’t innovate products or service. However, they do operate a hassle-free service with low prices. Walmart and McDonalds are examples of companies where operational excellence is their strategic priority. All systems are designed around the ability to be highly efficient including their ordering and fulfillment systems.

Companies that focus on product leadership push the envelope on product development. They create products that change the way the customer lives and/or plays. They create a culture of innovation, out-of-the-box thinking and don’t punish failure. Companies like Apple, Sony, and Johnson and Johnson are considered to be companies that focus on product leadership.

Companies that focus on customer intimacy are ones that create close relationships with their customers and fully understand their business. These companies focus on providing the services specifically needed by their customer. Nordstrom is definitely known today as a company that focuses on customer intimacy.

In the government, we tend to create products and services that try to be everything to everyone. In some cases, they end up being nothing to no one. As seen above by the examples, one priority isn’t better than another but it should drive your solutions and supporting business systems.

Being clear about your strategic priority ensures that all systems are built to accommodate the priority and everyone in your organization is marching towards the same goals.