Matter. Julie Williamson
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has been our obsession here at Karrikins Group (formerly ChangeLabs). We have spent more than fifteen years studying what it takes to matter, and working alongside companies striving to matter—to create more value, move beyond the competition, and as a result become the obvious choice. We have observed companies that succeeded, and also some that failed. We have learned from all of them, and we felt it was important to share those lessons. This book is the result of our realization that we needed to codify what it took to become the obvious choice. We wanted to map the journey of those who succeeded and offer it to you, here in these pages.
So we embarked on a research study, designed to uncover and document the practices of successful companies that have become the obvious choice—those that matter most in their industry. More than thirty companies, representing more than fifteen countries, hundreds of interviews, thousands of transcribed pages, years of analyses, and tens of thousands of words written to try to describe what we learned have led us to one strikingly simple, consistent, and powerful insight: To become the obvious choice, to be a company that matters, you need to consistently create outcomes that are valued more than those of your competitors and that are not easily replicated. As the definition of value evolves in the marketplace over time, you also must sustain your ability to perpetually create new and valued outcomes that are beyond what your competition is capable of doing. Period.
Sounds simple, right? But perpetually creating new and valued outcomes is clearly an accomplishment that only a select group of companies are able to achieve. How are some companies able to be the obvious choice in their markets year after year? We realized the “what,” “where,” and “how” questions about providing value were riddles worth solving. We pushed our analysis to answer these three questions, believing this would be the most useful to us and to your journey:
1. What does it take to create more value?
2. Where do you find the opportunities to create more value?
3. How do you build the capability to deliver more value, year after year?
These three questions formed the basis of our continued research. The answers form the premise of this book.
WHAT DOES IT TAKE TO CREATE MORE VALUE?
Jeff Moore set out to transform the way Lakeside did business, moving from a highly commoditized, super-low-margin operation to the obvious choice for innovative consumer goods companies in Canada. He knew the only way to get there was to solve more complex problems and to create more valued outcomes than his competitors. Doing that meant solving the most important problems his clients have—high freight costs—in a way others in the market couldn’t easily replicate.
That is what we mean by value: If you don’t want to be commoditized and you want to become the obvious choice, you need to create solutions to the complex problems that are most important for your customer, those that few others are capable of solving. In theory, that’s pretty straightforward. In practice, definitely not.
In Jeff’s case, the only real way to do that was through using single-source logistics management models, challenging entrenched industry practice, and creating efficiency and optimization opportunities along the way. This is complex work. It takes vision, intellect, effective processes and systems, and commitment to do it at scale. If you have those things, the complexity is a good thing; it is where the opportunity to differentiate comes from. Defining and solving complex problems that have economically significant outcomes attached is very hard work. It is not easily replicated, but the scarcity of scalable solutions is why it is valued.
That is what we mean by value: If you don’t want to be commoditized and you want to become the obvious choice, you need to create solutions to the complex problems that are most important for your customer, those that few others are capable of solving.
Jeff’s willingness to commit to navigating this complexity is what has made his company, Lakeside, the obvious choice for his customers. You’re going to hear a lot more about how they did that in Chapter 4. For now, we shift our attention to understanding how to identify the most complex and important problems—those where we can find the opportunity to create more value for your customers’ lives (as well as for your employees, your communities, and others in your industry).
WHERE DO YOU FIND THE OPPORTUNITIES TO CREATE MORE VALUE?
When Angela Ahrendts took the reins as CEO of Burberry, the brand was in decline. The trench coat was no longer cool, their brand was associated with an older, less influential demographic, and their traditional strategy was being undermined by powerful online channels capable of selling the same products they sold in store, for some 25 percent less. In short, they were being disrupted.
Like most retailers, Burberry had been determined to hide from the disruption, hold on to legacy business models, and hope that the threat would pass. Not Angela. Under her leadership, Burberry would move toward the disruption and stand right at its edge, where the old brick-and-mortar world met the new digital world. Her vision was to build an omni-channel brand and business model capable of serving customers where they were, not where Burberry had historically wanted them to be.2
We would suggest that she walked right up to what we call the edge of disruption, and looked out toward a future where retail for Burberry was reimagined. What single-source freight models were to Lakeside, an omni-channel consumer experience was to Burberry.
We have found in our work and our research that the opportunities to create the most value are found at the edge of disruption—at the intersection of old and new, where the profits, reach, and reputation of your past enable you to test the models of the future. This is where the most complex problems, with the fewest solutions, are found. Burberry didn’t abandon the traditional store model and go exclusively digital. Instead, it embraced an omni-channel model at the edge of disruption. It harnessed the emerging digital disruption, merged it with its existing business model, and moved confidently into the future armed with the solutions and business models required to thrive in the new world.
The edge of disruption for your organization is that point from which you can see both past and present changes in technology, regulation, customer demand, cost structures, employees, investors, and other variables converging into a larger wave of disruption that threatens the relevance of your existing value proposition and business model. As you project these changes into the future, you can see the erosion that turns your products or services into a commodity business, where you can only compete on price, volume, and a reduced cost structure, all the while burning your people out by asking them to do more with less.
Instead of erosion, you can also see a different future at the edge of disruption—where multiple new challenges for your customers emerge in the complexity that the disruption brings, and therefore where opportunities exist for you to create more value. It is at this intersection of old and new that the chance to differentiate yourself is found. In this book, we will help you define where your edge of disruption is and show you what to do when you get there to become the obvious choice.
So you now know where you want to go—to the edge of disruption, where you can synthesize existing and emerging business models and create more value. And you want to do more than just go there—you want to solve the problems that you find there and exploit the opportunities that arise. You want to use the vantage point of the edge to challenge assumptions and beliefs effectively. You want to create new and differentiated ways of doing business—with products and services that meaningfully change how business gets done.
To do that means figuring out how to get to the edge and stay there, continuously learning and moving as the edge moves. The sneaky little truth about the edge of disruption is this: It doesn’t stay in the same place for too long. You have to learn to perpetually move with it. When you can do that, you will remain the obvious choice for your customers, employees, investors, and communities, year after year—you will be a company that matters to all of the people you serve.