January 31, 2010

Toyota Product Recall a BE DiFFERENT Opportunity

Recently Toyota has announced they intend to recall millions of their vehicles as sticky gas pedals present a critical safety hazard.

If they understand the principle of Service Recovery they have the opportunity to turn a negative event into a loyalty building one.

Here’s my assessment of the situation through BE DiFFERENT lenses:
- the sticky brake problem is the result of a Core Service breakdown. Customers expect and deserve clean brakes. Somehow these vehicles escaped the quality control inspection. The Core Service process needs to be fixed and FAST.
- vehicle recall is a Service Recovery opportunity which if done well will actually result in more loyal customers than if the brake problem never happened in the first place.
- the recall process must have as its prime objective to nurture and deepen the relationship between Toyota and its customers.
- its not about fixing the problem (no accolades will come as a result of resolving an issue that never should have happened in the first place.
- fixing the problem is simply not good enough if you want the continued loyalty of these owners.
- it is about fixing the screw-up but placing the emphasis on doing what these owners don’t expect.
- successful Recovery will make these owners forget that the problem happened; they will fill the airwaves with their joy over how the company surprised them in the face of a product meltdown.
- time is of the essence. If you want Recovery to work to build loyalty the matter needs to be dealt with FAST. Trying to Dazzle an owner 12 months after the brake problem was uncovered will only convince them they need to move to Ford.

Here are some things that you, Toyota, could do to Dazzle these owners:
- act FAST and provide a time line declaring how and when the problem will be fixed for every car owner.
- be prepared to be flexible for those owners that have different needs than owners covered by your overall recall process. Each owner is different in some way and you must be prepared to be flexible and not try to enforce a process that doesn’t work for everyone.
- send a personal letter of apology from CEO to every owner.
- offer a credit on the next vehicle service as an atonement for their sins.
- or offer a small gift as a gesture that you care about the inconvenience you have caused and the quality trust you have broken.
- make it easy for owners to get car fixed. Overstaff the call centers and help the dealers deal with the increased work volume.
- DO NOT try and do the cost effective thing here. This is a time for trust renewal not cost control.
- over-communicate how the brake problem will be solved and how the recall process is proceeding. Emphasize how you are listening to your customers.

Lastly, Toyota, and indeed every business, needs to hard-wire a Service Recovery strategy as a critical component of their overall plan. There will always be surprise service breakdowns: people aren’t perfect nor is technology. Recognize the relationship-building and loyalty gains you will get by recovering well to these events and you will not only be better off, you will distinguish yourself from your competition who thinks the right thing to do is ‘fix the problem’.

Cheers, Roy

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Posted 1.31.10 at 09:57 am by Roy Osing | Permalink | Comments (0)

January 29, 2010

WHO do you want to SERVE?

The second step in the BE DiFFERENT strategy creation process is to decide on the customers you intend to serve. Can they generate the growth you are expecting? You may have the competencies they require but if they don’t have the latent potential to meet your HOW BIG objectives, should you be chasing them? You can, and it may feel good, but unfortunately you might fall short of your financial goals..

HOW BIG should determine WHO to SERVE.

There’s no such thing as a bad customer; its just that some are better than others. Examine the customer groups that you currently do business with. Given the current economic realities, can they deliver to your new financial expectations? Are their market characteristics appropriate to give you the growth you want? Apart from demand factors, what about the competitive environment - is it intense or are there opportunities to enhance your market position?

Carefully evaluate your options and choose the customer segments that can deliver you BOTH the growth you need as well as leverage the competencies of your organization.

Here are some factors to consider in evaluating which customers to dedicate your efforts to:
- customer groups in which your customer share position is low. If you currently have a small peercentae of their total business you have a good growt potential.
- look at markets that are currently growing in the double digits and where you have an advantage over others.
- geographicly defined segments which have easy access at relatively low cost
- high lifetime value customer clusters where investments will provide healthy returns over the long term. 

What do you do with customer groups you currently serve but can’t serve your growth and financial needs? Be prepared to walk away from them. You have to let them go in favor of focusing on the few choice segments that will provide the return on investment that you need.

Cheers, Roy

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Posted 1.29.10 at 08:53 am by Roy Osing | Permalink | Comments (0)

January 27, 2010

HOW BIG do you want to be?

This is the first of a four-part series intended to explain how to create a BE DiFFERENT strategy. It is a proven and practical process that incorporates the answers t four critical questions. It begins with the HOW BIG do you want to be question.

Traditional strategy-building methodology typically begins with an analysis of strengths, weaknesses, opportunities and threats. It then moves on to developing an overall strategic direction. Objectives and action plans are struck. Finally the expected financial results are produced. They are the output of the strategy-creation process.

In my experience, the financial results get scrutinized by the top executive and often get modified as the CFO and CEO decide they simply aren’t aggressive enough. Sound familiar? As a result, higher growth and financial numbers are driven out of the tabled strategy rather than adjusting the strategy to deliver more aggressive financial results.

This is a huge mistake. Assuming that the assumptions behind the plan are reasonable and acceptable, forcing more aggressive numbers from a strategy without increasing strategic risk is a fool’s game. The expected higher performance numbers will not happen.

The BE DiFFERENT Practice is to treat growth and financial expectations as inputs to the strategy-building process. Do you want to grow top line revenues 25% over the next 36 months? Or would you be satisfied with growing at 10%? Clearly the former target would require more resources and would entail greater risk than the more modest scenario.

In addition, the character of the strategies would be different. The 25% growth strategy would require a different set of actions than the 10% incremental option. For example bolder growth expectations might require new markets and strategic partnerships that might not be necessary under a modest growth plan. The bolder the plan the more you have to move away from organic growth.

So declare right up front the growth and financials you intend to achieve and THEN develop the strategy to deliver them. And if you have been growing at 10% don’t expect doing more of what you have been doing will be good enough to deliver on a 25% plan. It won’t happen. You will have to be more creative, more aggressive and be more accepting of more risk. If not, suck it up and be prepared to stay with your 10% strategy.

My next blog in the series will deal with choosing the customers you want to devote your efforts to. Join me…

Cheers, Roy

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Posted 1.27.10 at 08:52 am by Roy Osing | Permalink | Comments (0)

January 25, 2010

Lady Gaga Lives BE DiFFERENT

I read a blog recently on the Business Insider War Room titled ‘The 5 Things That Startups Can Learn From Lady Gaga’ by Charlie O’Donnell that I found extremely interesting as it resonated with the BE DiFFERENT Principles and Practices that I advocate in my book.

The learning’s from Lady Gaga are definitely worth repeating and I would suggest are not limited to start-ups. Her success factors apply to all organizations looking to be successful in the fast pace and highly changing world we live in.

1. Be Remarkable - Her costumes are “...so outlandish that you can’t help but notice.” Organizations need to learn how to be remarkable in terms of satisfying the needs, wants and desires of their target customers in a way their competitors can’t. Their value proposition needs to be compelling and unique so they will be remembered.

2. Repeat the message as often as possible - “Many of Gaga’s lyrics and sounds are repeated one right after another—simple, but memorable when listened to over and over again.” There is too much message clutter out there. People are often left to their own devices to sort out who can best serve their needs. Make it easy for them. Create your Strategic Game Plan and communicate it far and wide so the market (and your employees) will know what you are all about. Compose your only claim and use it frequently as your elevator speech.

3. Be Relentless - “...just when one Lady Gaga song starts losing steam—BOOM—here comes another tune that you just can’t get out of your head, seemingly once every couple of months.” Continuous renewal in business is critical. If the inside of your organization doesn’t keep pace with the market dynamics impacting it, death is near!. A constant flow of Holistic value-based must be presented to the market to maintain competitive differentiation and customer satisfaction.

4. Create something bigger than the individual - “Lady Gaga did this by creating a persona separate from her real self. ... Gaga has become larger than life.” Are you in the product-flogging business or the Value creation business? A focus on VALUE will lead you to a higher level of customer delight where your organization exists to create experiences that are life-based.

5. Repeat success - “Lady Gaga has clearly been influenced by Madonna, Michael Jackson, David Bowie, and others—and she seamlessly and subtly incorporates little homages to these superstars into her performance.” But the important take-away here is that she did more than merely copy these other performers. She vaulted beyond them to create a BE DiFFERENT persona. The same lesson here for business. It’s ok to be influenced by and emulate other ‘best in class’ organizations, but go beyond them to claim your unique position that will separate you from the pack. Copying is the enemy of BE DiFFERENT.

Cheers, Roy Osing
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Posted 1.25.10 at 09:24 am by Roy Osing | Permalink | Comments (0)