Wednesday, 02 March 2011 13:12

Michael Fetsko encourages innovation

When Michael Fetsko lands a contract to build a train system, it’s not because he is the best salesman in the industry. He gets contracts because he has dedicated himself to driving industry-leading innovation that has helped build Bombardier Transportation’s reputation as one of the best rail transit manufacturers in the world. When Bombardier was awarded the Hartsfield-Jackson Atlanta International Airport job, it was the innovation of Bombardier Transportation and its Systems Division’s automated people mover train system that won them the job at one of the world’s busiest airports.

Bombardier’s Systems Division faces a tough competitive market for their products. Fetsko, vice president of the Americas regions for Bombardier Transportation’s Systems Division, is constantly focused on innovative ideas and ways to stay ahead and on top of his industry.

“Ideas are encouraged, and our company encourages the divisions to do exactly that, to develop the next idea, the next game changer,” Fetsko says. “That philosophy is instilled throughout the company, and I think it is one of the foundations to our success.”

Innovation is ingrained in the roots of Bombardier. Even when Bombardier was just a small snowmobile maker, innovation and entrepreneurship is what led them to where the company is today. The Systems Division saw annual revenue greater than $1.3 billion in 2009, just a slice of Bombardier Transportation’s total annual revenue of more than $10 billion that year.

Here’s how Fetsko’s continuous drive and dedication to leading innovation at Bombardier has helped establish it as an industry leader.

Build trust

Due to Bombardier’s commitment to being the best at what they do, Fetsko and his team need to always have an ear to the ground about prospective projects. A commitment to excellence and their ability to create strong business relationships help get them in the door.

“When we find out about projects, in this type of business, you really can’t walk into a particular city at the last minute and say, ‘Hey, I’m here to bid on your project,’” Fetsko says. “Our strategic plans take us out five plus years. We are already looking at the cities where we think and know transportation systems will be built. And we are going in and meeting with the decision-makers, the customers, the politicians and really trying to secure our foothold in that particular location. What it comes down to is building the relationships with the right people and making sure the community sees you as a viable player.”

Companies in big industries and companies that face tough competition have to rely on their ability to offer strong products that come with the support of the company from multiple areas. Bombardier is often selected because of its ability to provide the best price and the best value for the customers’ money. Bombardier’s drive for innovation is also a key factor.

“Over the last two years, for us in the Systems Division, (innovation) has become a core part of our workload,” Fetsko says. “We have 100-plus people working on various forms of innovating our products and making them better. For us, it really comes down to trying to stay ahead of the competition. It also impacts cost savings. We are working on product development right now called energy storage. We are trying to push the envelope to try and make our systems faster, more cost-effective, more energy-efficient, more environmentally friendly, and it takes a team of people to do that.”

Encourage innovation

Innovation is not just a one-off thing. If a company doesn’t work hard and continue to innovate, then it is not an innovative company. Fetsko and the Systems Division work continuously to encourage and drive innovation. Finding ways to innovate and ways for employees to bring new ideas forward are keys to the company’s success.

“It really starts at the group level, the transportation group level, and it gets pushed down through all the divisions,” Fetsko says. “Bombardier has an innovation website where we encourage employees to submit their new ideas. Each idea gets reviewed by a committee and a team, and, of course, not all of them can get implemented but many of them do. They could be simple ideas on how we might be able to save more labor hours to do individual tasks, or they could be ideas on how to create the next big product breakthrough. It’s highly encouraged, and there are a number of mechanisms we have in place for employees to submit their ideas and creativity on how we could better the business.”

Ideas like an innovation website and innovation meetings are smart and fun ways to encourage employees to submit their ideas. Without these mediums for employees to speak what’s on their minds, innovative ideas can go to waste and will only hurt your company. Three years ago, Fetsko even created a full-time position for someone to head up their innovation efforts.

“You’ve got to encourage innovation,” Fetsko says. “Part of that is you have to have people who are dedicated to leading the effort. You can’t just talk about it and hope it’s going to happen. I think that’s one of the reasons that we have been successful. Companies may not want to do it, because it’s an overhead kind of position, but we have found that it more than pays for itself in a lot of the ideas we’ve already implemented and things that we’re doing to better the business and better the product. You’ve got to have a person or a small team of people that are responsible for it and committed to driving it throughout the business.”

At Bombardier, they also have quarterly meetings where the top-level executives from the company’s numerous locations gather for a two-day discussion that is strictly focused on innovation, product development and product improvement.

“You have to look at where you want to go and what you’re trying to strive for your business to achieve,” Fetsko says. “If you want to achieve big things, you’ve got to dream big things, as well. You’ve got to put time into it. You have to run your product improvements like you would a particular project. They all have budgets they have to meet, and they all have schedules they have to meet, and finally, you have to make sure you drive it to completion.

“When we say innovation here, it’s not necessarily the next big breakthrough on a train system. It could be things on how we could manage our business better. It can even be discussions on a particular task and whether we can do it with less people and still accomplish the same thing. Can we get it done on time with the same quality perhaps for a lesser amount of hours? That all translates to cost savings. Innovation relates back to us being able to offer customers a lower price for a product in the future. When we say innovation, it’s more than just product innovation, and that’s why it’s encouraged by everybody. If you have ideas on how to make the business more efficient or how we could improve the business, that’s how we make better products.”

Be accountable

Of course, with any new product or innovative idea, testing has to be done before that idea can be declared innovative and useful to the company and to its customers.

“Some customers are reluctant to be the guinea pig for some things that are new,” Fetsko says. “One thing that we do here very well within our division is our expertise to build a transportation system from the ground up. Integration, testing and commissioning are our core areas of our expertise. When we put something new into a project and the customer says, ‘Yes, I’ll take it,’ from our standpoint, it goes through a rigorous level of internal testing and external testing. We go through rigorous design reviews with our customers, so these types of ideas if they are new and get implemented, really go through a high level of scrutiny.

“Everything has to pass through our safety group as part of our governance. They are the ones that have to give the final blessing that a system is safe to carry passengers. Anything that gets implemented that’s brand new or might get integrated into a system goes through that sequence of testing and conditioning, so both the customer and Bombardier are confident it’s going to work.”

Bombardier uses test tracks to make sure its products are up to the company’s high standards and are tested a second time once the product gets shipped to a customer.

When innovation plays a big part in your company, it is often very difficult for only one person to overlook the entire operation. Fetsko says that he encourages and expects his employees to know how to do their jobs and to be independent enough to make their own decisions.

“My philosophy is to allow for accountability for running your part of the business,” Fetsko says. “I’m not going to step in and tell people what they’re supposed to do on a daily basis and how they’re supposed to go about it. We have levels of governance and reviews that are put in place so that we can review what is going on in every part of the business. The people here are empowered and are expected to run their part of the business. My style is not to micromanage at all, but I will routinely walk around the building and interact with the employees. To them, it really shows a sense of caring and says, ‘Hey, here’s the guy that’s running the business, but he spends a lot of time with the employees.’ Not necessarily telling them what to do — I don’t do that — but rather asking them how I can help and asking them how things are going and really telling them and showing them your appreciation for what they accomplish for us every day.”

Establishing a culture where employees know that they are empowered to do their jobs is critical for a corporate environment that is innovative.

“The one thing you have to focus on is to set up a structure so that people feel empowered to do their work,” Fetsko says. “You have to make sure those parts of your business and leaders of those areas can handle the work and that they’re not too overburdened with trying to manage too much. You verbally and physically have to tell people what you expect from them.

“I’ve got monthly meetings with all the folks on my team. They are very short meetings, face to face, not through e-mail and not through the phone, to really interact on that basis is very important. If they come to me with a problem, I want them to come to me with three solutions or more, as well. I try to tell them, ‘Don’t expect me to solve all your problems.’ You’ll always have the folks that come in and say, ‘Hey, I’ve got a problem, what do you want me to do?’ My response to them is, ‘What do you think we should do?’ Certainly, I could give them my opinion, but I really try to encourage our folks and help them find solutions to their own problems. It comes down to empowering people and telling them that it’s theirs to do, it’s theirs to run. It raises a level of passion and it all translates to results.”

How to reach: Bombardier Transportation, (412) 655-5700 or www.us.bombardier.com

The Fetsko file

Michael Fetsko

vice president, Americas regions

Bombardier Transportation, Systems Division

Born: Pittsburgh

Education: Bachelor of arts degree and a master of science degree both in environmental sciences, from the University of Virginia; master’s degree in civil and environmental engineering from the University of Pittsburgh

What was your first job out of college, and what did you learn from it?

My first job out of college was working for a company called Ensr, and I worked as a geologist. They were an environmental engineering consulting firm. What I learned was how important it is for projects to meet their deadlines and their goals. I also got a lot of chances to travel and meet with customers.

What is the best piece of business advice you’ve received?

The best advice is the importance of relationships and developing relationships in your business, both with internal customers and external customers, and having that face time with them. People really appreciate that level of interaction versus conversing through phone or e-mail.

If you could choose one person, past or present, to have a conversation with, whom would you speak to and why?

Going back to my athletic days of playing football for the University of Virginia, one person I would really like to have a conversation with would be Lou Holtz. I have read some of his books and I am a fan of his style of leadership and what he has been able to accomplish as a football coach and what he has been able to accomplish with people who have played for him and passing on the values he’s lived by.

If you could have any superpower, what would it be and why?

If I could have a crystal ball and I could see into the future of what’s going to happen, that would probably help, as far as being able to make the right decisions and growing the business.

Published in Pittsburgh
Tuesday, 01 March 2011 12:57

Heinen's focuses on customer satisfaction

A few years ago, Tom Heinen found himself heading to Dick’s Sporting Goods to look for a last-minute Christmas gift on Dec. 23.

What the co-president of Heinen’s found when he got there was the best parking spaces were occupied by employee vehicles. But when he entered the store, there was no help to be found and the stock was sparse. Making his way to the checkout, there were two employees nearby, but neither seemed all that interested in helping him.

“Not either of those employees showed any sense of urgency to wait on me and get me out of the store,” he says. “I thought, ‘This is unbelievable.’”

Fast-forward one year. Once again, Heinen was at Dick’s for a last-minute gift. His first thought: “Great, here we go again.” But this time, things were different.

An employee immediately asked him if he could help him find something. Surprised, he said yes and told him he was looking for a baseball bat. The employee proceeded to tell him what aisle it was in and explain that the store had different types and if he didn’t find what he was looking for, to let him know.

Skeptical and scarred by too many bad retail experiences, he headed to the aforementioned aisle, and sure enough, it was right where the employee said. When he made his way to the checkout area, there were now two televisions showing CNN and there were two people at the register, both highly engaged, who quickly checked him out in half the time from the prior year.

While he was relieved to avoid a repeat of his prior negative experience, there was something disturbing about the rapid change.

The problem for Heinen was that he didn’t see Dick’s as being a customer-service-centered business, but in just a year, it had completely changed his experience.

“If Dick’s, who isn’t even focusing on this, can get there, we have to do something differently,” he says. “That’s when we started to make a decision to distinguish ourselves on customer service at an entirely different level.”

It’s not that customer service wasn’t always the focus of Heinen’s; in fact, it’s always been one of the grocery retailer’s primary differentiators. But what the Dick’s experience showed was that if even the big box retailers could deliver a positive customer experience, Heinen’s was going to have to take the service provided by its 2,500 people up another notch.

And this is proven by the store’s own customer surveys that indicate a satisfied customer isn’t really all that loyal but a highly satisfied customer is.

“The value of highly satisfied customers, statistically, is that they’re virtually guaranteed to come back within two weeks,” he says. “A satisfied customer, the number is like 62 percent, so there’s this huge difference between having a satisfied and highly satisfied customer.

“You want to have everybody in that top box — highly satisfied — because they’re very subject to defection if they’re not.”

The challenge is, how do you go from being good at customer service — yielding satisfied customers — to being great at customer service — yielding those coveted loyal, highly satisfied customers?

It’s not the cost of a can of green beans. It’s not the color scheme in the deli department. It’s not whether the box of stuffing is on the top shelf or the bottom.

“If you really want to have a successful company, you have to have highly satisfied associates, which leads to highly satisfied customers, which leads to profit, which allows you to continually reinvest in the company, which includes the people,” Heinen says.

Choose your destiny

If you drive down Detroit Road in the western suburb of Avon, you’ll eventually be faced with a grocery store dilemma: On one side of the street is the low-cost, no-frills Marc’s, while on the other side of the street is the service-first Heinen’s. Each provides groceries, and in a lot of cases, the exact same groceries. But the two couldn’t have a more divergent strategy. One is focused only on price, the other is focused more on service.

When Tom and his brother, Jeff, the other half of the co-president duo, took over the business after the death of their father, one of the first things they focused on was to determine what their overarching strategy should be.

When you look at how to differentiate your business, Heinen says you have to consider three different models — operational efficiency, product leadership or customer service. Operational efficiency is similar to the Wal-Mart approach of being everything to everyone or competing on price. Product leadership refers to competing on your products — whether it be quality or selection — and customer service is a focus on providing the best experience for the people with whom you do business.

“The first thing you have to do is find where do you want to excel,” he says.

For Heinen and his brother, the decision was easy: customer service. Heinen’s reputation had been built on people and service, so it was just a matter of building on this foundation.

“You have got to decide, first of all, if that’s where you want to be,” he says. “I think Marc’s is one of the best-run businesses in Northeast Ohio. It’s not one that I aspire to be like, and it’s not one that I’d be personally proud to be a part of, because it’s not what we believe in, but it’s a great business model.

“The category killer stores like Dick’s or Staples or OfficeMax, they’re helpful, but they’re not winning any customer service awards, and they don’t care,” he says. “That’s not their strategy, and that’s fine. They’re still in business, and they have a heck of a lot more stores than Heinen’s does, so how can you argue their success? And Marc’s? Marc’s makes more money than Heinen’s will ever dream about making.”

When you decide how you’re going to market, you also have to look at whether the market can support your model or not. Right now, Heinen’s has 17 stores, and the market can support that based on the desire for quality products and service. Each location is carefully chosen based on demographics that show an affinity toward choosing service over just price.

“If you can imagine that the market didn’t exist for people who cared about high-quality food and a great experience in the store, if there weren’t those people, we wouldn’t have 17 stores,” he says. “We’d have 15 stores or whatever the market could support, or we’d have to build a different type of experience for the customer.”

Marc’s doesn’t invest a lot in its people, and the service is reflective of that. But because Marc’s isn’t built on service, it’s irrelevant. Heinen’s has to invest in its people, because that’s the whole key to the strategy. If your people aren’t your first priority in a customer-service strategy, it’s not going to work.

Prioritize your people

If customer service is your chosen path to success, then start by laying out expectations at every level of the business.

Heinen uses a service pyramid to illustrate where he wants his employees to be. At the bottom of the pyramid is a category called “nice, respectful.” Just above that is “helpful.” Above that is “knowledgeable,” and above that, at the very tip and where he strives for all employees to be, is “invaluable.” But there’s no silver bullet to get there.

“When people say, ‘What’s your secret?’ — it’s not a program,” he says. “Customer service commitment isn’t a program. It has to be — no matter how many classes you do, no matter how much training you do — woven into the cultural fabric of your organization so that when people come to our organization, they understand.”

It starts with placing a strong emphasis on your people, who, in turn, have to live out that culture. One of the first things you have to do is make sure that you and your company managers are communicating and clarifying on an ongoing basis.

“You have to clarify what your expectations are, and you have to provide feedback,” he says. … “Surveys will tell you that people want to know what their job is and what’s expected of them. They want to know how they’re doing and most companies are bad at both.”

A lot of companies have jobs that aren’t glamorous but are essential to success. The people in them may aspire to greater things, so it’s important to help employees find the roles that are best suited for their personalities and interests.

“The first thing we do is we try to help determine what their passions are, so if they come into work and they’re a cashier and they decide they love the bakery, we’re going to put them in the bakery, because if people are passionate about their work, they’re happier.”

And even if a particular job may not generate passion from anyone, challenge people by keeping their jobs fresh by moving them around.

For example, someone may be a cashier 80 percent of the time, but he or she may take on an extra role of being a customer service facilitator the other 20 percent of the time. In that role, the person would work with both new and seasoned employees, one on one, to help them understand how they can be better at customer service specifically in their department. Or someone may also work as a demo coordinator, so in addition to his or her regular role, he or she would oversee all the demos that go on in the stores.

“It’s not a full-time job, but it’s a way that if someone is interested in doing something different, ‘OK, here’s a way,’” Heinen says. “It could break up the monotony.”

There’s also the tried-and-true method of motivating employees toward customer service: Pay them for it.

Heinen’s supports its employees through a gain-sharing program, which began about three years ago. Each store has set goals, including financial goals, but they’re balanced by overall customer satisfaction scores, known as O-Sat. If the stores meet their goals and their O-Sat score stays at or above their six-month average, they qualify for gain-sharing. If the company makes more than its budget, that money is put into gain-sharing, and the money is split relative to how the store performed compared to other stores — so stores that did better get more money to split among employees.

“Fundamentally, you have to incent the behaviors you want, so we incent the business side,” he says.

It’s possible for one store to make its goals, but that’s not enough — the company has to make its profit goals too.

About half of the time it’s been offered, the employees have reached the levels needed to earn gain-share.

“What it does is it creates a focus in the stores around, ‘What do we have to do?’” he says.

One store really rallied around creating a great customer experience, and it earned gain-share by recording 10 points higher than what it had ever done before, which was a huge accomplishment.

“It can have a significant impact, but at the end of the day, no matter what tools that you put in place, it’s the culture that drives the experience for the customer day-in and day-out,” he says.

Survey customers

Every CEO thinks he or she has an organization that provides great customer service, but there’s only one person that knows the truth (and is usually willing to share it): the customer.

Heinen’s uses a customer survey that focuses on three areas: overall satisfaction, likelihood to recommend and likelihood to return.

From there, it breaks down into specific departments, and then into product selection and helpfulness of staff.

“Again, product side, people side,” he says. “I’ve got to win on the product side; got to win on the people side.”

Spend time thinking through what belongs on your customer satisfaction survey. For instance, price questions don’t always yield useful results, because everyone always wants lower prices.

And don’t overload your customers with lengthy surveys.

“We want to keep it to five minutes, because if it’s more than five minutes, you aggravate the customer, and we don’t want to do that,” Heinen says.

To increase participation rates, the customer gets a certificate for 5 percent off an order of their choice within a given time period. But even customer service incentives are areas that might need some additional customer service attention. Initially, the discount was off the customer’s next order, which really irritated some when their next order was only $10. When they can use it within a given period, they can plan a larger trip and maximize their savings. Customers should be highly satisfied, even when it comes to giving feedback about customer service itself.

The goal is to get 60 surveys per month per store, and an outside company manages the process.

The results allow Heinen to compare not just how his stores are performing but also compare his whole company to other supermarket chains that the survey company has as clients. This helps him see how he’s doing in the industry as a whole, which happens to be very well — competitors are around 63 percent on overall satisfaction, while Heinen’s is at about 80 percent.

Driving these numbers up plays a key role in Heinen’s overall business strategy.

“This is so much part of how we run our business, whereas other companies that we know that have them, they’ll say, ‘OK, yeah, that’s information,’ but they don’t introduce it into running the business at all the way we do. And the associates, when you talk to them, they say, ‘Yeah, that’s some survey we do,’” Heinen says. “It’s a big difference.”

Walk into any Heinen’s store and ask what its O-Sat is, all of the leaders and most of the associates will likely know what it is and what it means.

Survey employees

Much like customers, every CEO thinks he or she has satisfied and engaged employees. But in a similar fashion, you have to take the time to ask them if they are happy and what would need to change to improve their outlook. Grumpy employees rarely deliver exceptional service.

The employee survey is administered about every 18 months, often with a shorter, “pulse” survey at the nine-month mark just to get a quick gauge. This survey focuses on whether employees would recommend Heinen’s as a place to work, if they would recommend it as a place to shop, and they rate themselves on a scale of 1 to 5 on how proud they are to work at Heinen’s.

Ninety percent of employees said they were satisfied or highly satisfied to work for the company. While it’s vital for customers to be in the “highly satisfied” category; for employees, “satisfied” is usually good enough. Why? Because customers have far more options and an easier time switching companies than an employee does, and most employees only leave a company when they are dissatisfied with how they are being treated.

The survey also delves into other issues related to employee satisfaction, such as how employees feel about their direct report, whether they feel valued, if they have the tools and equipment they need, does the manager accommodate their needs, how informed they are, how well their supervisor coaches them, how their manager values their opinion and how much clarity they have in their job.

“When we get these back, if we find out, for example, that we’re not doing a good job of coaching and that our managers aren’t communicating regularly, and they don’t understand coaching, then we say, ‘OK, this is an area we need to invest in,’” Heinen says. “It’s about taking the information and learning and applying it and putting it into place and really looking to get better. That process, we’re very married to.”

He says that as much as they want to improve things and make associates feel valued, if the store manager doesn’t get it and doesn’t want to improve, then nothing will happen.

“At the end of the day, it’s about the most important person in anyone’s life on all surveys, and that’s their direct report,” he says. “So whether you love or hate Jeff or Tom Heinen at Heinen’s, the truth is, the most important person is your department manager if you’re an associate. It’s building the relationships with them and coaching them with an effort to helping them get better, and it comes back to being as committed to their success as your own.”

Throughout all of this, Heinen has learned that it’s a long process to get improved results.

“If you strategically decide you’re going to differentiate yourself in the people arena, then that means that it’s all about, No. 1, believing and trusting in your people and then starting the journey that we started, and it takes a long time,” he says. “If you expect to see great results in a year, it’s not going to happen.

“You have to know what you’re trying to achieve, but I don’t think you ever get to the destination. You can take Nordstrom’s or any other really well recognized company for highly engaged associates, and I guarantee you that they never stop trying to get better, and they never think they’ve reached a destination. It’s just the nature of the beast.”

How to reach: Heinen’s, (216) 475-2300 or www.heinens.com.

Published in Cleveland
Monday, 28 February 2011 19:01

Victoria Tifft

Call it an elevator speech or a value proposition, but when it comes to communicating messages about your company, a solid 10- to 12-word statement that conveys who you are, what you do and what makes you different is imperative. If you’ve ever needed to apply for financing or venture capital funds, then you’ve been down this road. Creating the right value proposition for your firm takes a bit of thought and often a change of perspective.

Creating the right value proposition forces you to think about what your customers perceive as value. Ask yourself, ‘If you were in your customers’ shoes and they didn’t have your product or one similar — what would happen? Would they lose customers, would they be late for a regulatory finding? Would their car rust faster?’ Next ask yourself, ‘If they bought a competitor’s product instead of yours, what would they be missing? Would they have pretty graphs, but miss detailed information that could pinpoint a potential problem? Would they spend twice the money and delete their weekly pocket cash? Would they get their project started later and encounter administrative hassles that would slow their ability to deliver a critical project?’

Then go a step further. How does it affect the bottom line? Does the subsequent car rust decrease the car’s useful life and make them need to buy another car sooner; does the late project delay the release of a product, or even worse, let a competitor grab the initial market share? If they missed the critical information, could it cause a recall or even brand damage? Begin to think of your product in terms of how it affects the person you are selling to, and then how it affects their company. In very complex sales with multiple buyers, these questions also extend to the political affect on a player and often the impact on their compensation or status in the organization. However, to get a value proposition right, start by putting yourself in your customers’ shoes and asking the basic questions we’ve gone through.

My firm is currently re-evaluating our value proposition to ensure that we are in alignment with what our customers perceive to be valuable. We’ve done our homework, met with several customers and feel that we understand their perception of our value. We entered into a two-stage process. In the first stage, we developed a broader proposition statement that captured who we are, what we do and what makes us different. This statement was: “Clinical Research Management Inc. helps government and commercial customers accelerate research and product development timelines for basic and applied research, through late-stage clinical markets for drugs, biologics and devices. Our customers repeatedly come to us for our extraordinary customer service and ability to craft successful, innovative and knowledgeable solutions for their needs.”

Next, we refined the broader statement and chose 12 words that clearly stated our value proposition. In the end, that gave us the following: “Our innovative and knowledgeable solutions accelerate customers’ research and product development timelines.”

As a corporate leader, once value propositions are truly identified as the path to a customer, you need to ensure that your infrastructure, services/products and capital expenditures align with delivering innovation and knowledgeable solutions for our customers. Requests for expenditures outside of these parameters are potential loss leaders because they won’t align with your customers’ interests.

The most successful businesses are born of ideas that fill an unmet need. Value propositions are the mechanism to institutionalize that concept as you grow. So listen to your customers, get your team together and craft a value proposition statement that identifies who you are, what you do and what makes you different from everyone else.

Victoria Tifft is founder and CEO of Clinical Research Management, a full-service contract research organization that offers early- to late-stage clinical research services to the biotechnology and pharmaceutical industries. Reach her at vtifft@clinicalrm.com.

Published in Akron/Canton
Friday, 18 February 2011 15:14

Are you ready?

Let me get right to the point. As CEO of your company, you take the lead role in defining market differentiation. So, if that was all you hoped to gain from this article, you can move on. However, if you also want some insight into how you define market differentiation, well then, read on.

What is market differentiation?

As a specialist in brand development, it is disheartening to listen to all of the brand speak. There is much confusion in the marketplace as to what a brand is. So, let’s start with the obvious. Brand is not a logo or an advertising tagline. It is not design elements or a graphical look. According to Webster’s, a brand is a “claim of distinction.” It is important not to confuse brand with branding. A brand defines a company’s market differentiation. It is, by my definition, an undisputable evidence of distinction and something that can be proven. So while branding is what you turn over to your marketing director, brand development must be led by the CEO. A brand’s distinction is what separates it from its competitors. It’s what makes it stand out as extraordinary, different or, better yet, more valuable to the end user.

How to uncover it.

Brand development is the internal discovery of brand distinction. Much to the surprise of many, it is not discovered by talking with your customers or believing that you can become something your organization is not capable of being. Brand is the essence of what your organization already is. It is, in part, what your organization has always been. It is what you are. Remember, your company mission is to “be …,” your vision is to “become …,” and your brand is what you are and what you do differently.

The process starts with fact finding and through a series of stages, extrapolating potential truths, until you have a prioritized list of absolutely unique, provable selling points. And although defined here in a single sentence, don’t underestimate the power of brand discovery. The deeper you dig and the more thorough the analysis, the more obvious the essence of the brand and its leadership capabilities will become. And the easier it will be to assume a long-term brand leadership position going forward.

From this process, you can establish the foundation for an undisputable statement of differentiation and a leadership position you are capable of controlling. It will provide a lens through which all company strategic direction should be viewed. It is your corporate values, reputation capital, name equity and social capital, which encompasses your relational and cognitive beliefs and values. Your company brand is your market driver and, as such, must get incorporated into the company’s mission, strategies and operations. It must align with the overall business plan.

Aligning business strategy and brand strategy.

Our business strategy encompasses our customers, strategic partners, distributors, employees, marketing and sales. So, too, must our brand strategy. And when the two are aligned, they form our overall corporate strategy, infusing our organization with the momentum it needs to take over the leadership position.

What’s the importance of brand leadership? It’s the added-value, good brand-positioning offers. It allows customers to adopt your brand as their own and allows for better brand management, internal adoption and crystal clear communication. Great brands control their categories and thrive for years. They set examples for others to try to mimic.

Are you ready to assume the leadership role?

Once successfully differentiated, a company separates itself from competitors and, thus, assumes a leadership position. Once aligned with the company’s business strategy, it is positioned to succeed. If there is a downside to brand leadership, it would be living up to your company’s claim and having the guts to posture the company as a leader, not a follower. Are you ready?

Kelly Borth is CEO and chief strategy officer for Greencrest, a 20-year-old brand development and strategic marketing firm that turns market players into market leaders. Borth has received numerous honors for her business and community leadership. She serves on several local advisory boards and is one of 30 certified brand strategists in the U.S. Reach her at (614) 885-7921 or kborth@greencrest.com, or for more information, visit www.greencrest.com.

Published in Columbus