Focus On The Customer

As a follow-up to my post about How The Mighty Fall by Jim Collins, I thought I'd share a more personal story. How many of you remember a discount retailer called Bradlees? Operating stores from Maine to Virginia, Bradlees was the "Target of the northeast" in its day. With attractive stores and a solid reputation for its apparel, Bradlees leadership was convinced it had a winning formula.

In the mid 1980's, I worked in the public affairs department for The Stop & Shop Companies (Bradlees parent company at the time). Among other things, I was charged with helping the operating companies with store openings and new market entries, and writing all the speeches for the corporate CEO and the various company presidents. Interestingly enough, there was probably no one else at corporate who spent more time in stores talking to customers and front-line employees, while at the same time thinking and writing about the business on a macro scale. It's an experience that forever shaped how I approach my work. But I digress...back to the story.

I spent a great deal of time with Bradlees' senior leadership team, especially its president. As I remember it, Bradlees financial performance, regardless of how impressive, was always being compared to Wal-Mart and it really steamed the Bradlees leadership team. Gross margins was an especially sore subject, as Wall Street analysts kept asking why Bradlees couldn't achieve Wal-Mart's impressive results. The dilemma of course is how does one achieve Wal-Mart like margins when operating stores with expensive real estate and higher labor costs?

Tired of the monthly badgering about its margins, Bradlees leaders believed the quickest way to improve margins was to raise prices. And that's exactly what they did. The problem was, the customers responded by flocking to competitors Caldor, Zayre, and Ames. And for all intents and purposes, thousands of Bradlees customers simply left and never came back.

While Bradlees hung on for a number of years, it never fully recovered from the wound, going bankrupt in 2000 and closing all of its stores the following year. (Ironically, when Wal-Mart eventually opened stores in this part of the country it took over many of Bradlees former locations).

The poisonous combination of arrogance and lack of customer focus sent the company into a death spiral. Imagine going out of business because you tried to compete with another retailer that didn't have a store within 500-1000 miles of you? Hard to imagine, but that's what happened.

The next time you think about taking your focus off your customers, even for a second, remember Bradlees.

Collins And Client Service

Let me start by saying I'm a big fan of Jim Collins. Built to Last and Good to Great are both terrific books. We use Good to Great for our graduate students in the capstone module of Seton Hall University's MASCL program.

I will have to say though that Collins' latest book, How The Mighty Fall is a smaller book in more ways than one. It comes off as a hastily written defense of his first two works. You need only to flip to page four before reading a highlighted page titled: Why The Fall Of Previously Great Companies Does Not Negate Prior Research. As a result, the 123 pages of primary text falls well short of his first two books, but to be fair, he had a pretty tough act to follow.

Anyone who understands the fundamental principles of Built to Last realizes that while an enterprise may be built to last, it's not guaranteed to last. If you've read Good to Great, most readers get the concept that moving from good to great doesn't ensure eternal greatness. Despite the fate of Fannie Mae, Circuit City, et. al., the fundamental principles of Collins' first two books are rock solid.

But dismissing this new book as simply an act of Collins just playing defense would be unwise. Based on his research, both new and old, he offers "five step-wise stages of decline." Understanding these stages, particularly in today's business climate may come in handy. That said, I believe layered in those stages appears to be a lack of disciplined focus on the customer and on "having the right people on the bus." It seems to me that once a company shifts from these priorities to others, even slightly, it can spark its demise.

Consider this, I've asked several people to name one company for me, that was truly focused on the customer, in need of bailout money right now. You know how many names I have on the list? Zero.

In my next post, I'm going to share a story of a retailer (for whom I worked many years ago) whose road to failure began by paying too much attention to a competitor that wasn't even in its operating area, while paying too little attention to its own customers. It's a lesson I'll never forget.

How The Mighty Fall offers us a framework about decline. If you're like me, you believe there's more to be learned from our failures than our successes. For that reason, I recommend you read it. Just realize of course that following the principles in this book are no more a guarantee for survival than Collins' previous works could guarantee long-term greatness. Collins provides the framework and principles, the ultimate results are up to you.

A Bolt of Excellence

Usain Bolt may have had competitors, but not much competition as he set a new world record in the 200m event in Beijing yesterday. Look at the race and consider its relevance to you and your business. Ask yourself if you could create the kind of distance from your competitors that Usain Bolt did.

In Jim Collins' book Good to Great, he refers to the Hedgehog Concept. Collins suggests you ask yourself three questions:

• What are you deeply passionate about?
• What can you be the best in the world at?
• What drives your economic engine?

Collins essentially says good can be the enemy of great. "To go from good to great requires transcending the curse of competence." Agencies don't deliver great client service because they are already pretty good at it. If you want to separate yourself from the pack, consider taking your commitment to client service excellence to an all new level.

Take a look at what excellence looks like. By the way, if you don't speak the language, don't worry. There's no mistaking what's going on!