Contributors from members of the Copper team
You are a business owner. You have built a great company and have the basic building blocks for growth. This is the point when you want to pour on the gas by strengthening your value proposition and improving your competitive advantage. To help you do that, we have identified the top ten great business practices of globally recognized all-time high-performing companies that helped them get to the next stage of growth. We will take a look at the foundations of their success by examining their unique strategies and how you can apply them to your business today.
DON’T BE ALL BUSINESS
Whole Foods Market sells organic food, but that is not the only thing they are known for. Whole Foods’ marketing media does not focus on their products; instead it focuses on selling an “organic lifestyle” along with the beauty of healthy eating. They featured videos of their suppliers as brand stories. By promoting a culture in addition to advertising products, Whole Foods’ marketing campaigns have inspired millions of people around the world to adopt that lifestyle, and in doing so buying billions of dollars worth of goods.
SELL THE EXPERIENCE
We have all heard of “the Starbucks experience”, the heart of Starbucks’ brand and the key to its success. CEO Howard Schultz had a vision of bringing the concept of an Italian coffee house to America, and that vision is realized in each and every Starbucks. Customers know exactly what to expect from Starbucks, and Starbucks works hard to reinforce these expectations by maintaining consistent quality in its food & beverages, ambiance and service as well as amenities like free WiFi and music downloads. You are not only what you sell, but the entire experience you offer to your customers.
GET RID OF THE CRAP
“People think focus means saying yes to the thing you've got to focus on. But that's not what it means at all. It means saying no to the hundred other good ideas that there are …. Innovation is saying no to 1,000 things.” - Steve Jobs When Mike Parker was first appointed as a CEO of Nike, Jobs’ advice to Parker was to “get rid of the crap and only focus on good stuff”. Whether you are building a marketing campaign, restructuring a business model, or talking about product design, less can indeed be more.
KNOW YOUR CUSTOMER
Harley Davidson is a great example of a company that knows its customer, and their financial statements speak to the results with a 2014 net profit margin exceeding that of the industry leader, Toyota. They identified that their customers weren’t simply buying a motor bike, but were buying Harley Davidson products for the unique experience of riding Harley Davidsons. The company created H.O.G., the Harley Owners Group, a community for Harley owners to share the Harley Davidson experience together. The company captured why their customer were buying their product - “Live to ride and make great friends along the way” - and delivered a solution for it.
EMPLOY CONSCIOUS CAPITALISM
Tom’s adopted its “one-for-one” business model with shoes that quickly expanded to eyewear and other products. For each pair Tom’s sells, it gives away another pair to people in need all over the world. Similarly, when customers purchase dog food from Pedigree Petfoods, they help orphaned dogs find homes. Corporate social responsibility (CSR) increases brand value by offering customers the chance to contribute to a greater cause. According to Cone, 93% of consumers are more loyal to companies that engage in CSR, and Harvard Business Review showed that socially conscious companies perform 10x better than others. Great CSR creates a positive cycle by engaging stakeholders, employees, and suppliers alike. HBR concludes that “The most conscious companies give more, and they get more in return. The inescapable conclusion: it pays to care, widely and deeply.”
“Employees are a company's greatest asset - they're your competitive advantage. You want to attract and retain the best; provide them with encouragement, stimulus, and make them feel that they are an integral part of the company's mission.” - Anne Mulcahy, former CEO of Xerox The importance of having great employees is especially applicable to growing companies, where small teams must be able to tackle a myriad of big problems. How do you find great talent? Zappos, the e-commerce giant, has a unique strategy of offering customer service workers $3000 to leave the company after their first week of work; CEO Tony Hsieh says only 2-3% take the money. Though a bold approach, it has worked well for Zappos by ensuring they have only the most motivated employees. In Inc Magazine, Facebook CEO Mark Zuckerberg shared a leaner practice on recruiting the best employees, where he only hires someone to work directly for him if he believes he could work for them. This is another simple yet effective way to build your company with quality talent.
DON'T BE ALL THINGS TO ALL PEOPLE
Exceptional business strategies help companies strengthen their competitive advantage. Michael Porter, a leading authority on competitive strategy, shares his pearls of wisdom in his book “On Competition,” where he points out that one way to differentiate your company from the herd is by focusing. “Strategy 101 is about choices: don’t be all things to all people”, writes Porter, who refers trade-offs as a strategy. He emphasises the example of Southwest Airlines, the world’s largest low cost carrier. Southwest began operating focusing only on routes between Dallas, Houston, and San Antonio. Their primary target was leisure travellers, but before long their aircrafts were frequented by business travellers as well. They now operate 3,400 flights every day. Southwest started with a tight focus and let their business expand organically, so be like Southwest, and don’t try to be all things to all people.
DON’T DO EVERYTHING BY THE BOOK
Zara is another company with an excellent business model worth examining. One of their most interesting practices is their resource allocation and efficient inventory management. Unlike traditional retail models, Zara produces 80-85% of their products according to market reaction. That way, they never waste products on markdowns. They only ramp up production when they see products become popular and leverage customer feedback to get insights on the next big thing. Zara does not advertise, and they are known for spending almost nothing on marketing; instead, Zara invests in the location of their retail stores. This is how Zara maximizes its brand value. There are two main lessons to be learned from Zara’s ingenious business model: to allocate resources in a way that maximizes the return on your investment, and to test the market, when possible, before committing to a course of action.
SOCIAL KNOWLEDGE SHARING
Social knowledge sharing leverages social media tools to share and communicate company knowledge both internally and externally. According to i4CP, high-performance organizations are 2.5 times more likely to engage in social sharing than low-performing organizations. Companies share their ideas and knowledge to gather feedback, monitor sentiment and to test ideas or new product concepts. Social knowledge sharing enables you to collect customer feedback in a cost-effective and timely manner. 3M, a multinational company known for driving growth through innovation, has found that products created based on customer feedback and input generate more than eight times the amount of revenue of those created strictly internally. Some of the most groundbreaking innovations are heavily informed by customer input, and with social media more powerful than ever before, companies need to start leveraging the power of social sharing today.
BECOME A NETWORK ORCHESTRATOR
A collaborative study by Deloitte and Harvard Business Review, analyzed S&P 500 companies over the past 40 years. They have identified four types of business models:
- Asset Builders (e.g. Ford, FedEx, Walmart)
- Service Providers (e.g.Accenture, JP Morgan)
- Technology Creators (e.g. Microsoft, Oracle)
- Network Orchestrators (e.g. Uber, TripAdvisor eBay)
Network Orchestrators significantly outperformed other companies. They facilitate a service based on their network of customers. Nike, for example, developed the Nike+ ecosystem where users could track their performance and share it with friends. Build your own ecosystem and be a Network Orchestrator.
It is important to align your business practice to your needs, goals and the market you serve. Don’t reinvent the wheel; take the ideas and best practices of the exceptional businesses of today, and use, optimize, and create new ones to help you build the exceptional business of tomorrow.