to your 401(k) for you to retire. You may as well retire, since you are
not serving me.” I may make that speech someday.
A second player-driven type organization is one that focuses on
customers. This organization does more than focus; it becomes very
customer-centric. In Treacy and Wiersema’s language they are
called a customer-intimate organization. This organization’s energy
is spent solving the customer’s problem. This core process of help-
ing the customer with everything from finding the right size shoes
to checking on the faucet installation is what creates the long-term
relationships between the business and the customer. Customer-
intimate organizations are clever. They know their market is the
high-income category or people with money who want to be pam-
pered. They don’t cater to the handout crowd or people looking for
a bargain. Don’t go to Nordstrom looking for a blue-light special.
You will never hear “Attention Nordstrom shoppers. Our blue-light
special on aisle twelve for the next twenty minutes is mink coats,
with matching accessories on aisle eleven.” Sustaining a high cus-
tomer–sales staff ratio to provide intimate service costs a great deal
of money. Somebody has to pick up the tab. Guess who?
A customer-intimate organization understands that solving a
customer’s problems must be in real time. The answers or solutions
must be immediate. In a customer-intimate organization the
employee must be able to make decisions on the spot to solve a cus-
tomer’s special requirements. The required organizational structure
is decentralized with a high degree of empowerment. Employees in
a customer-intimate organization are rewarded for finding specific
solutions to customers’ problems.
Contrast that with my experience, and maybe yours also, while
buying a car. At some point the salesperson has to check with the
sales manager. Your offer is so low the company is giving the car
away or the salesperson will be fired for making such a poor deal.
Actually the salesperson is on break in the employee lounge drink-
ing coffee while you anxiously await the news confirming your
cunning ability to negotiate a deal. I caught that game early. Now
the first question I ask a salesperson is, “Can you sell me a car?” The
The Six Driving Forces That Affect Your Business Plan
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answer is always a startled affirmative. I then go on to say, “No,
what I mean is can you sell me a car without having to go to the
sales manager? If you can’t, then I don’t want to waste your time,
so let me work directly with the sales manager. Otherwise I’m out
of here.” A Toyota salesperson in Baton Rouge must have thought I
was kidding. When he returned he discovered I wasn’t.
Customer-intimate organizations give employees a lot of room
to make deals, work with the customer, and demonstrate value in
the relationship. In my car dealership story, the salesperson had
been told the rules up-front, yet he wasted my time and tried to
play games with my mind. Don’t do that to your customers, espe-
cially when they are sending signals that such amateurish behavior
will not be tolerated.
A number of outstanding companies choose to use the cus-
tomer-intimate model. Nordstrom, Cott Corporation, and Airborne
Express are three examples I reference because they are in business-
es with radically different goods and services. Don’t be caught off
base thinking that customer-intimate means assigning a personal
shopper to your customer. Customer-intimate means solving the
customer’s problems, no matter what type business problem is pre-
sented. Each of these companies believes that time spent up-front
with the customer in a one-on-one relationship pays great divi-
dends in the long term. People and businesses pay premium prices
to have their needs legitimized, their concerns heard, and their
unique business problems solved.
Doug Christie, a sales representative for Bayer’s agriculture
division in Crossfield, Alberta, understands the concept of being
close to the customer and customer intimacy. He is always on the
job with no order too small or situation too minor for his attention.
His clients know when they unexpectedly run short of vaccines or
they need technical information, Doug is instantly available. His
office has a twenty-four–hour phone contact number. Doug works
the phone constantly, staying in touch with his clients. I jokingly
said to him, “You must have that phone permanently attached to
your ear.” He just grinned, reached back, pulled out his wallet, and
Seven Steps to a Successful Business Plan
154
said, “No, not to my ear, to this.” Not only is he a caring salesper-
son who loves his business, he also knows his “center of gravity”—
taking care of those clients. It must work. Doug was recently named
sales representative of the year.
THE PLANS-DRIVEN ORGANIZATION: ACHIEVING
GOALS IS THE NAME OF THE GAME
A plans-driven organization is based on compliance of its member-
ship. It believes in using a disciplined approach to moving forward.
This organization requires rigid adherence to the plan. Rewards are
based on absolute compliance with the pre-agreed plan. Such rigor
requires an equally rigorous management system to sustain itself.
Authoritarian management is the common approach. With a fixed
structure there is little latitude for individual decision making or
unilateral actions. In a plans-driven organization the name of the
game is to accomplish the goals. Employees are rewarded for high
compliance. Sticking to the plan is important. Because of this fixa-
tion with goal achievement, the customer tends to be placed in the
back row of priorities.
A utilities company is probably a good example of a plans-driv-
en organization. An electrical company must operate from a tight-
ly managed plan to generate and deliver a certain level of power to
its users. It must do usage calculations to determine the flow of its
outputs and plan accordingly. To adequately serve the public, it
must be thinking far ahead in terms of population growth, support
requirements, and total management of the consumption require-
ments.
Plans are central to any organization that by necessity has a
high compliance component. For example, a rigid plan would be
followed by a team during an annual outage changeover procedure.
Servicing nuclear rods is not the time to be creative. They would
not be rewarded for skipping standard operating procedures, taking
shortcuts, or making it up as they go along.
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155
Another example of a plans-driven organization is the military
unit preparing for war. The precursor to battle is thorough plan-
ning, but even this has limits. Every good commander knows that
plans are obsolete the moment the first shot is fired. War is truly the
role model for chaos. That’s why the U.S. military, contrary to pop-
ular stereotypes, trains its soldiers to take responsibility, take
charge, and take command. When the carefully planned attack
becomes the typically chaotic scenario, nothing goes as planned.
Stability is achieved in the chaotic situation by discipline, training,
and dedication to the agreed plan.
A corporation represents a case for the concept of business
drivers and a single focus. If the corporation is consistent with a
uniform focus across all operating divisions, no problem exists.
When a corporation is made up of diverse strategic business units,
the problem of single focus is compounded. What is the correct
driver for the corporation? If the planning team selects the wrong
driver, serious operational difficulties will follow. Assume the cor-
poration has a customer-intimate focus. What happens between the
corporate staff and the operational staff of the business unit that is
products-focused? What functional or dysfunctional behaviors are
demonstrated in exchanges between the corporate staff and the
business unit that is an operationally excellent unit? Imagine the
communications conflict between the corporate staff and the busi-
ness unit that happens to be properties-driven. In each of these
cases you have a serious operational conflict. The management
teams are behaving from uniquely different views of the same mis-
sion. There is no internal organizational alignment, as portrayed by
the arrows in Figure 6-1.
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156
To resolve the conflict created by misalignment, as seen in
Figure 6-1, you may choose to have all your business units come
into alignment by shifting from one focus or orientation to a con-
sistent focus across all units. There are two solutions: You may have
them all become operationally excellent. You may choose to make
them all product-focused.
Alignment can be done by that method. Before you jump to
that solution too quickly, consider the cultural shift requirements
and implications. You may not be able to get people to move from
a product focus to an operational-excellence focus. I’ve watched
organizations try to make the shift. Resistance to the change takes
many shapes and forms. Employees will passionately charge that
The Six Driving Forces That Affect Your Business Plan
157
Figure 6-1. When business units have different focus from the corporate
focus, loss of direction, cohesiveness, and teamwork happens.
the organization no longer cares about the quality of its products.
They see the company as a money-hungry organization trying to
drive costs down. They equate steps like reengineering and down-
sizing with cost cutting only for the sake of being more profitable.
A corporation with diverse business units must have a plan
focus. The explanation is quite simple. What is the function of a
corporate headquarters? It is a control function. What should head-
quarters control? How about the plan? If I am the chief executive
officer with five diverse business units, I want them to follow our
plan. I don’t care how they do it. They may have five different
approaches (see Figure 6-2) and still be able to fill my corporate
requirements. What I want from each of my unit presidents is their
contribution to the bottom line of my corporate plan.
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Figure 6-2. A corporation with diverse business units must be plans-driv-
en. It is the only combination that allows diversity. The only thing that
matters in this case is whether the business unit met its plan require-
ments. That’s the bottom line.
THE PROCESS-DRIVEN ORGANIZATION:
CONTINUALLY SEEKING IMPROVEMENT
A process-driven organization looks for operational excellence in all
that it does. These companies do extensive examinations of the
flow of primary and secondary processes found within their busi-
nesses. They seek constantly to drive out inefficiencies. They are on
a perpetual continuous improvement path. No process is too small
to be ignored when looking for delays, blocks, and leverages to
improve. This means they become very good at doing the same
tasks over and over. Tight processes are the watchword when you
look at an operationally excellent company’s structure. There is no
fat.
Operationally excellent companies focus on how they do busi-
ness and reward efficient and effective behaviors in employees.
Their people are taught not to waste any resources in getting the job
done.
To achieve operational excellence, a company must advocate
and practice teamwork as a principle of its culture. In today’s busi-
ness environment there is no place for the lone player. The process-
es required to stay ahead of production schedules, customer
demands, and short cycle times are too complex to be mastered by
one person or a handful of selected employees. An operationally
excellent company is the right testing ground for using teamwork
as a tool to promote the culture.
The Pony Express is a good historical example of operational
excellence. The design of this mail delivery system was based on
maximum efficiency for people and equipment for its day. The
images of riders staying in the saddle for hours with no break, fre-
quent horse changes, and frequent hand-offs to fresh riders at a full
gallop have become part of the lore. As with many good business
ideas the Pony Express’s days were short-lived because of the costs
and other factors. The process was so grueling and dangerous that
the company encouraged only young, single, male applicants.
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159
Wal-Mart wrote the book on distribution operational excel-
lence.
4
It was the first of a number of companies to examine its
processes, reduce the cost of those processes, and pass the savings
to the consumer. Wal-Mart did not see the necessity to pay anyone
in the middle to handle the product. The store’s strategy was to
reduce shipment time from factory to store floor and use the sav-
ings as a weapon against the competition. Wal-Mart went ever fur-
ther with its remaining handlers. In simple terms, products enter a
warehouse floor by two in the afternoon, go directly to a lane des-
ignated for a specific store, and are shipped out in the afternoon.
The product enters the store and is immediately on the shelf. The
production-to-consumer sequence is short, controlled, and effi-
cient.
Another example of an operationally excellent company is
FedEx Corporation. Its ability to manage process is legendary and
has been copied by hosts of companies trying to emulate its effi-
ciencies. FedEx manages its processes tightly, carefully designing
routes, loading trucks, and managing the route time. The compa-
ny’s delivery people are like human machines—they represent the
model of efficiency during their workday. The next time you have
a FedEx delivery, invite the representative to take a coffee break and
chat. It will not happen. They are cordial but focused.
Any company attempting to achieve the awards for excellence
will have to examine the way it does business with the same inten-
sity as Wal-Mart or FedEx. There is a move in management circles
to clean up operating systems. Reengineering, Business Process
Mapping, and six-sigma are techniques currently in vogue. Each
technology has its various consultants, disciples, and true believers.
All work well to some degree when properly applied.
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THE PRODUCTS-DRIVEN ORGANIZATION:
PRODUCING THE BEST AND STAYING ON TOP
A products-driven organization replaces the customer as king with
the product as king. These organizations know their “center of grav-
ity” is the product. A products-driven organization puts its energies
into producing either the best product on the market or a series of
products that stay ahead of the market requirements.
In a products-driven organization, two factors influence suc-
cess. The first factor is the product itself. No effort is missed in mak-
ing the product the centerpiece of the organization. When a com-
pany hits a winner, such as Sony with the Walkman, Volkswagen
with the new Beetle, or DaimlerChrysler with the Chrysler PT
Cruiser, it pushes the product to the fullest with continuous
improvements. Companies with an early product lead often lose
the advantage when they stop the product improvement. A com-
peting company then buys the market with an improved model just
far enough off the original design that patent or copyright infringe-
ments are not a problem. A products-driven organization can ride a
single product for years if it has the foresight to pour the effort into
maintaining the product’s visibility in the marketplace.
An issue faced by every products-focused company is obsoles-
cence. Continuous improvements help, but not for the pet rock or
hula hoop. Some products are fads with a limited shelf life or life
span, no matter the marketing efforts. Management teams have to
make tough decisions about their approach to products since sig-
nificant capital investment is required to generate a stream of prod-
ucts or refurbish the existing lines.
This was exactly the situation for Rose Marie Bravo as the new
CEO of Burberry.
5
She faced a tough situation of reviving a proud
old British brand. As a tough manager she was reported to be cut-
ting the gray-goods market in Asia, focusing the product lines, and
refreshing the image. Her situation was delicate since she did not
want to alienate the old Burberry crowd of trench coat wearers
The Six Driving Forces That Affect Your Business Plan
161
while appealing to the fashionable new follower. This situation is
familiar to any president of any products-driven company.
A second way for a products-driven company to succeed is to
try to always top its own product through creativity. This is done
through a business structure that is loose enough to allow for cre-
ativity. Out-of-the-box thinking is necessary in a products-driven
organization because demand for innovations on the existing prod-
ucts is relentless. When combined with the requirements for a
stream of new and better products, the culture, by definition, must
promote innovation by individuals and teams. The reward system
in a products-driven company is based on the creativity required to
develop and sustain a steady stream of products.
Another example of a products-driven company might be
General Mills or Post Cereal in the cereal business. Every day they
fight for shelf space in the stores. Their packaging has to be eye-
catching; their products taste-sensitive and cost-competitive. The
pressure is on the development teams to improve the existing prod-
ucts or develop new ones. The next time you are in a grocery store
take a close look at the products on any given shelf. How many will
be marked in some way as “new” or “improved”?
I love being a consultant. It gives me an opportunity to con-
tradict myself without missing a beat. I just told you about the need
for freshness and creativity in your product line. Now I’m going to
say you may not have to do anything with your product but keep
on keeping on.
A product that hasn’t changed since it was first introduced is
the Randall knife. Based in Orlando, Florida, Randall Knives has
patterns of knives that have been unchanged for several decades.
The Number One fighting knife I carried in the jungles of Vietnam
in 1969 is exactly the same pattern as the model featured in the
company’s 2000 catalog. The late Bo Randall and later his son Gary
remained true to their purist designs as custom knife-making
caught on in the late 1960s. Prior to that only a handful of custom
knife makers could be found in the United States, and Randall was
considered the dean. That was because of quality and style. When
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