Value Disciplines re-examined

In The Discipline of Market Leaders, Michael Treacy and Fred Wiersema explore what I consider to be one of the top 5 models that can help focus on virtually any business, brand and customer/employee engagement challenge.

I’ve advocated and used the concept successfully with a range of clients and situations – more often than not, the mere act of senior management teams even debating and considering what they can and should make their core focus yields great results.

But the model’s nearly 20 years old – pre-dating the internet.  And while the oldies are often the goodies, again based on recent client experience, I think it’s time to re-think the Disciplines themselves – but not the idea that underpins them.

Why?  Two key drivers of change:

  1. Technology.  When they did their study in 1995, T&W lived in a world where the technological capabilities that could drive Operational Excellence, Product/Service Leadership, and Customer Intimacy were frankly in a different universe than the one we inhabit today.  I’ll lump the emergence of technology-enabled social media here.  Perhaps wrongly…
  2.  Sustainability.  In 1995, we still lived in the world of shareholder value-driven management; corporate responsibility and sustainable business were nascent ideas that still inhabited the fringes of corporate governance.

I’ve been playing with some ideas, and the real challenge is to try to shift the model’s three categories without destroying the concept’s integrity – while addressing the many challenges such changes would inevitably raise.

Technology has radically enabled improvements in Operational Efficiency (the, erm, internet, cloud computing, mobility, etc.); Customer Intimacy (better data, social media, real-time engagement, viral marketing), and Product Leadership (crowdsourcing R&D, Open Source, etc.).

My initial hypothesis would probably be that technology has squashed  Product/Service Leadership and Customer Intimacy into the same bucket.  So that is Debate 1.

This would mean that the new third discipline needs to be defined, which is Debate 2.

Could it be Sustainability?  Businesses who chose to make their longevity and their relationship with society their core focus? Granted, much of this could arguably overlap with Operational Excellence (e.g. the inherent business and social benefits of reducing waste) and product leadership (e.g. the inherent benefits of sustainable products) – but such overlaps already exist in the existing model.

I suppose the question is whether this model is predictive of future success, as opposed to defining what drives historical success (the original model).

I hear Dan Gray’s shot incoming… brace for impact…


3 thoughts on “Value Disciplines re-examined

  1. Coming from a B2B perspective I’ve always felt that customer intimacy is just a hygiene factor. I don’t think we’re there yet with B2C, but if you add up the data, the social media and the design thinking/open innovation trends, I think you could sketch out a future where “Customer Intimacy” isn’t a meaningful source of advantage, it’s just something everybody needs to do.

    I’m inclined to think Product Leadership will remain, but it will be available only to the companies most willing to invest in innovation, year-in, year-out. The lesson of the last decade is that staying ahead involves a commitment that few companies are comfortable with. So I guess that’s the Sustainability (longevity) overlap.

    Operational Excellence is an interesting one – we’ve seen competitors catch up with the logistic excellence of Tesco and Walmart. We’ve seen technology help other competitors catch up with the productivity and the reliability of Japanese car manufacturers. Part of it is that the leading companies lost focus and dropped the ball. Implications here are about commitment to internal innovation, but also commitment to restructuring the business model. Still, like PL, this seems to be a long-term commitment space. However, the other part is that in a number of industries, it seems technology is commodifying the majority of Operational Excellence… which is food for thought…

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