As customers and markets change, so should your business strategy. In fact, it should constantly be evolving. My favorite definition of strategy is attributed to Michael Porter, the globally recognized business thought leader who simply defines it as “creating a unique and valuable position involving a set of differentiating actions.”
Remember, if you don’t act in a way that is different from your competition and valued by your core customers, you’ll be seen as just another commodity, to be bought on price alone. But there’s more to strategy than simply identifying differentiating activities that are meaningful to customers.
The companies that really their scale up are the ones that back up their differentiated brand with a guarantee. It’s the guarantee that really matters to the core customers and attracts them to your company so that they’ll buy from you at a profit. But it’s a promise that if not kept could hurt your company and help the competition.
So why then would anyone want to make a promise that could put his company in jeopardy? There are lots of reasons to do so. For starters, a meaningful guarantee helps align the entire team behind key goals and empowers them to act in unpredictable ways on the things that really matter to customers. It’s a mechanism that brings out the best in a team and has them acting in unexpected ways that are unique to your organization.
Because a guarantee empowers all individuals within the company to keep the promise, it creates a level playing field. It evenly distributes power so that everyone feels equal and can make a real difference in their respective roles. It significantly increases collaboration and strengthens communication among team members.
Lastly, the guarantee should be tied to team members’ performance and the company’s goals. That carries with it both rewards and risks. When the promise is kept, the rewards benefit the team and the company; when it’s broken, it helps the competition. Since less than 10 percent of the companies in our industry have a truly differentiated brand promise backed up by a guarantee, offering one is a great way to stand out from the competition.
Judith M. Guido is chairwoman of Guido & Associates, a business management company. She can be reached at email@example.com.