Monday, July 10, 2006

The Most Important Discipline For A Company To Master Today

Strategy books like "The Discipline of Market Leaders" argue (quite correctly in my opinion) that to dominate a market, a company must choose a single discipline on which to focus. TDML lists the three choices as "best product, best total solution, or best total cost"; I prefer the formulation "efficiency, innovation, or customer service."

For a long time, I thought that was enough. After reading "Small Giants," however, I've realized that there is a fourth discipline that may be even more important.

Being a great place to work.

Whether your focus is efficiency, innovation, or service, being a great place to work is the foundation for excellence.

Would the Toyota Production System work without workers who took pride in continuous improvement?

Would 3M or Google be as innovative without giving workers the freedom to tinker and work on their own ideas, rather than ones handed down by management?

Would Nordstrom's legendary level of service be possible if its associates didn't love their jobs?

It's not about perks and benefits, though of course things like free food and corporate massages usually don't hurt.

It's about providing an environment that meets workers real needs--the things that go beyond simply collecting a paycheck. In fact, being a great place to work may even save you money through greater productivity and lower cash compensation costs.

My visionary friend Don Yates is fond of pointing out that the sole reason an organization exists is to meet the needs of its members. No one can put a gun to your head and make you work at a particular company (at least not in this country).

Yet few companies feel comfortable setting "meeting the needs of its members" as an explicit goal. At best, they might say they want to build a sense of "family" (it is telling that what makes the family relationship unique is the involuntary bond of kinship).

But if a company does acknowledge our basic human needs for connectedness with others, personal growth, and a sense of contributing to something larger, and provide an environment that meets these needs, it can attract the kind of talented, passionate people that will enable it to triumph over all its competitors.

This kind of extraordinary organization has two incredible advantages that make it almost unbeatable: Greater talent and greater productivity.

If I told you that there was a simple piece of management software that would enable you to recruit the best team, and make them more productive than any of your competitors, you'd rush out to buy it.

That magical product already exists. All you have to do is make your company a great place to work.

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