Right around 1997 Michael Treacy and Fred Wiersema released The Discipline of Market Leaders.  It was an exciting book for me and my colleagues at Computer Sciences Corporation (CSC) because the book was researched by the CSC Index division.  A few years earlier CSC’s own Michael Hammer and James Champy revolutionized how we think about how to run organizations with their book Reengineering the Corporation.  Building on that book with new research, "Disciplines" shifted the focus from “how” to “what”.

The timelessness of what they wrote became clearly evident earlier this year, when I saw a slightly reworded version “Disciplines” at the foundation of a culture change initiative.

Though not cutting edge, exciting and new, I thought it might be worth revisiting the strategic wisdom that rings as true today as it did more than 20 years ago.

Disciplines

The basic premise of the book is that a corporation that wants to be a market leader in their field needs to commit itself to become #1 in one of these disciplines, and no less than #3 in the two others.

Operational Excellence

The value proposition is to be the low or lowest price in the market.  This is achieved by eliminating all waste and inefficiency.   These are fine tuned process machines seeking economies of scale, and optimization is a science.

Aldi, Wal-Mart and UPS jump out.  UPS, for example, trains their drivers how to walk and even how to best hold their vehicle key.

Product leadership

These are companies that offer products or services that push performance and innovation boundaries.  They will sacrifice price and lead the customer rather than be lead by them.

Intel and Nike made a good showing in the past but 3M is a mainstay and today no one stands out like Apple and maybe Bose.

Customer Intimacy

These companies are all about delivering what specific customers want.  It’s all about the customer.  Often these are niche company’s but it has also been achieved at a large scale.

Airborne Express and Nordstrom once dominated the category but today think Virgin Limited Edition vacations.

Nothing to Nobody

When I recently saw the recycled version of this “oldy but goody”, the triangle had a hole in the middle labeled “Nothing to Nobody”.   The visual clarity was new, the concept wasn’t.

Those companies that are hovering in the middle of the triangle, not exceptional in any of the three disciplines, are doomed to mediocrity and find themselves small in the rear view mirror of their competitors.  Even those that excel at just one discipline and ignore the other two, end up fighting for survival from the back of the pack.

Defining it is one thing.  Strategic and tactical decisions must be driven by the course set forth by the strategy.  Are you a product leader?  Then let go of price constraints as your target market is not the cost conscious crowd.  If customer intimacy is your game, then don’t hold on to self serving efficiencies in options, features, designs or delivery methods.  Are you competing with operational excellence?  Quality, selection, and esthetics of your brick and mortar will be secondary.

You have to pick one.  Just one.  It must be the tie breaker for your critical decisions and only then should you strive to be very good at the other two.

While not expressed in these words, the concept should be evident in the strategies of most successful corporation running at the front of the pack.

Can you identify which corner of the triangle your organization driving towards?

How about the organizations you work with?

Are either hovering in the middle of the triangle and does it show?

Filed under: Book Review, Corporate Culture, Leadership, Strategy