Dear Bob ...
I found your recent column, "May the best panacea win," to be very interesting. In it you said, "... business strategies fall into three categories: Product innovation, customer relationships, and operational excellence."
[ Also on InfoWorld: "Is there more to business than revenue, cost, and risk? No" | Get sage IT career advice from Bob Lewis' Advice Line newsletter. ]
At the end I was wondering what companies out there have successfully combined product innovation, strong customer relations, and operational excellence? Why not have it all?
Dear Strategist ...
Why not have it all? Two reasons (and it's an excellent question; lots of executives ask it in a very pointed way):
The first reason is called the "discretionary dollar." It asks the question, If you had just one more dollar to invest in your business, what would you invest it in? Companies have to make investment decisions because money, staff time, and executive attention are all finite. This doesn't mean choosing one of the three to the exclusion of the others. It means ranking them in order of priority, so if something has to give, the company can decide which and by how much.
The second reason is more complicated -- a matter of optimization dynamics -- and it has a lot to do with where each strategy leads in the marketplace.
Product innovation companies have to invest serious money in R&D, and more serious money in marketing to explain their new innovative products to the marketplace. Time being a critical element to success, they often have to take shortcuts to get their innovative products out the door, which means operational excellence might suffer. The good news: One reason companies pursue product innovation is to support higher margins, some of which can be devoted to customer service.
Generally this will be generic "good service," as opposed to making deep investments in customer relationships, because product innovation usually leads to the need to sell products broadly rather than deeply -- mass marketing rather than niche marketing.
Customer relationship companies invest serious time, money, and attention keeping individual customers happy and engaged, one at a time. It's the difference between good service in a retail store and account management in a business-to-business environment.