The Myth of Excellence: Why Great Companies Never Try to Be the Best at Everything
by Fred Crawford and Ryan Mathews
“Tired of business drivel? If you are ready to step beyond platitudinous mission statements and strategies cooked up in distant boardrooms that have no connection to the trenches where business battles are actually being fought, this is the book for you. It is grounded, readable, and honest.
Fred Crawford is the managing director of a consumer products, retail, and distribution practice, and Ryan Mathews is a futurist specializing in demographics and lifestyle analysis. To research purchasing behavior, they surveyed 5,000 consumers, but the responses they got surprised them. The authors “discovered” that:
- It is better to be the best at something and pretty good at most other things that customers like than to be pretty good at most things customers like and the best at what they don’t care about;
- Some customers operate with a product quality model that says, if you’re not at least this good, you don’t count, but if you ARE at least this good, you are good enough;
- Price isn’t always everything; and
- Neither is any other single thing.
Crawford and Mathews’ initial inquiries eventually grew into a major research study involving more than 10,000 consumers, interviews with executives from scores of leading companies around the world, and dozens of international client engagements. Their conclusion: Most companies priding themselves on how well they “know” their customers aren’t really listening to them at all. Consumers are fed up with all the fuss about “world-class performance” and “excellence.” They found that values (respect, honesty, trust, dignity) were more important to consumers than value. This discovery led the pair to develop a new model of “consumer relevancy.” They explain in detail the importance of price, service, quality, access, and experience for the consumer. They then suggest that for companies to be successful they need to dominate on only one of these five factors. On a second of the five they should stand out or differentiate themselves from their competitors; and on the remaining three they need only to be at par with others in their industry.
With dozens of examples, Crawford and Mathews demonstrate the validity of their premise. They argue that successful businesses are those that excel in one of these areas, are good in another, and are at least average in the rest. Wal-Mart, they say, is dominant on price and maintains a good selection of products, while Target excels at product selection and makes price its secondary attribute. The authors conclude that it is both uneconomical and probably impossible to be excellent in all areas. Instead, Crawford and Mathews suggest that companies engage in Consumer Relevancy, a strategy of dominating in one element of a transaction, differentiating on a second, and being at industry par (i.e., average) on the remaining three. It’s not necessary for businesses to equally invest time and money on all five attributes, and their customers don’t want them to. Imagine the confusion if Tiffany & Co. started offering deep discounts on diamonds and McDonald’s began selling free-range chicken and tofu.
Today’s customers are leading a revolution against business as usual: They are demanding that companies recognize them as individuals and conduct business on their terms. In The Myth of Excellence, Crawford and Mathews provide proven strategies for meeting the demands of today’s empowered customers, who are crying out to be treated with respect, dignity, and courtesy.
After describing the importance of the five key attributes, the authors explain how a company might evaluate itself to see how well it is doing. The authors’ clear writing style and copious use of examples and case studies make their ideas understandable to a wide readership.
(This book review was originally published in 2001 as one of the Top 10 Books – Edition 9.)