Blog posts on competition

Posts selected fromManagement Blog - Engineering Blog - Investing Blog and other blogs

• Medical Tourism

  Medical tourism (traveling overseas to get medical care) is growing and likely to continue to do so. The USA’s extremely high costs of medical care push people to find more reasonable health care solutions. Also in some countries the very rich seek out advanced treatments outside their country.

  Seeking more cost effective and more customer focused health care options are likely to lead to booming markets in catering to these customers. Many countries have seen this as a smart market to focus on. And I think they are right.

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• Lessons for Managers from Wisconsin and Duke Basketball

  The lesson many people miss is that college teams are mostly about developing a team that wins. Developing individual players is a part of that, but it is subordinate to developing a team. I think college coaches understand this reality much more than most managers do. But a management system that develops a team that succeeds is also critical to the success of business.

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• Unintended Consequences - distorting the system or distorting the data

  Using data to understand your processes and improve them is very useful.

  But using data often results in unintended consequences. If you don’t have a good understanding on the pressures collecting data will bring to bear on the system you can create pressure for results that damage the delivery of value to customers...

  Distorting the system or distorting the data are often the result, instead of the process improvement that is desired and expected.

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• Cater to Customers Desires to Achieve Customer Delight

  Customer delight requires understanding your customers needs and desires. Often even your customers don’t understand these well. Businesses that have a deep appreciation for what their customers, and potential customers, desire and that create systems to deliver solutions that delight those customers benefit greatly from that effort.

  To build a sustainable enterprise you must provide value customers will appreciate.

  Your customers do not have one unified set of desires. Some customers may want as good an experience as is possible and if that costs substantially more they are happy to pay. Others want to pay the least possible while having an acceptable experience.

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• Six Keys to Building New Markets by Unleashing Disruptive Innovation

  Unfortunately we do not often stop to examine the theory and therefore fail to learn as we should as we experiment and get new results. The most effective way I know of to improve the learning is to use the PDSA cycle, predict the effects of change and then examining the results of change. As simple as those two acts are, they are skipped far to frequently.

  His second point, that managers frequently use overly simplistic models or theories is also important. Management is not well suited for simple theories that can be applied in any situation. Many interdependent variables are often at play and management requires not application of simple rules but applying knowledge in complex situations as best you can. Management is challenging and simple answers are often of little value – even though they are desired.

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• Quality Customer Focus

  Customers expectations change over time. Often what was once enough to delight a customer (remote control for a TV) becomes expected. Once a feature is expected the organization gets no credit for providing it they only risk a negative reaction if they fail to provide it.

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• Innovation Example: Farecast (2006)

  Farecast provides data and analysis to those looking to purchase airplane tickets. The graph above shows ticket prices for tickets between Boston and Washington DC over the last 60 days. I have thought for quite some time I need better data to make the best purchase decisions. Farecast seems like a great fit.
  
  The airlines attempt to maximize their profit by changing ticket prices. This pricing model is different than most pricing options I face, normally the price is pretty much set: with the possibility of sale prices. 

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• Is Innovation Needed to Keep Manufacturing in the USA?

  There is no ace in the hole. If countries want to keep manufacturing jobs they are going to have to do lots of things right. No country has such an advantage they can expect to rely on their country being more innovative (or offering cheaper labor, or their citizens working harder or…) than all the other countries in the world.

  Innovation has been an advatage for the USA. It should continue to be an advantage for the USA but many other countries will innovate very well (Japan, Germany, China, Korea, Singapore, England…). The USA has many assets: transportation infrastructure, banking, rule of law, educated and skilled workforce, huge market, decent tax laws, engineering education… The key will be to keep focusing on the whole system (and fix things like huge budget deficient, huge current account deficit, excessive health care costs, excessive executive pay…).

  I also believe a key competitive advantage will be in applying management improvement concepts such as lean manufacturing. 

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• Creating and Sustaining Great Management Systems

  It is hard enough to create and sustain great management systems without adding more challenges to achieving success. When the management system results in having credit for each success fought over (to allocate credit to whoever convinces others they deserve the credit) it is much harder.

  This is one of the many ways Performance appraisals schemes (where people have to claim responsibility for successes in order to get more cash) create problems.

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• It Just Works

  The Kano model of customer satisfaction is an excellent way to view customer expectations.

  The Kano model states that you have expected quality – it just does what it needs to (what is expected). Then more is better type – give me more at the same price and I am happier. But where you really want to get as a company is products and services that delight customers.

  When you are delighted you are not easy prey to other companies. When you are satisfied you are ready for offers that say we will give it to you a bit cheaper or give you a bit more. But if you are delighted you don’t want to leave and instead are telling everyone you know how great this product or service is.

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