It doesn't matter much where your company sits in its industry ecosystem, nor how vertically or horizontally integrated it is - what matters is its relative 'share of customer value' in the final product or solution, and its cost of producing that value.
Interpretation
The location of a company within its industry is less important than how much value it provides to customers and how efficiently it can produce that value.
Gary Hamel emphasizes that a company's position within its industry and its level of integration are secondary to its ability to deliver value to customers and manage production costs effectively. This perspective challenges traditional views of business success, urging companies to focus on the quality and cost-effectiveness of their offerings rather than their relative industry status.
In practice
During a conference on entrepreneurship, this quote can be used to motivate startups to focus on customer satisfaction.
The real damper on employee engagement is the soggy, cold blanket of centralized authority. In most companies, power cascades downwards from the CEO. Not only are employees disenfranchised from most policy decisions, they lack even the power to rebel against egocentric and tyrannical supervisors.
The biggest barriers to strategic renewal are almost always top management's unexamined beliefs.
To create an organization that's adaptable and innovative, people need the freedom to challenge precedent, to 'waste' time, to go outside of channels, to experiment, to take risks and to follow their passions.
If customer ignorance is a profit centre for you, you're in trouble.
The single biggest reason companies fail is they overinvest in what is, as opposed to what might be.
The only thing that can be safely predicted is that sometime soon your organization will be challenged to change in ways for which it has no precedent.
The antidote to inequality is equality. The question is how do you achieve equality? I believe that, for business, which is where I can speak, we have to shift from shareholder maximization to stakeholder maximization.
We need to put ourselves in the shoes of our customers. That is my new battle cry. Live and breathe Starbucks the way our customers do.
The rules of engagement around building a brand have changed significantly over the past 10 to 15 years. Where companies at one time could spread their message through traditional marketing, consumers now seek an enduring emotional connection with the companies they patronize. The foundation of that connection is the most important characteristic of building a world-class brand: trust. Trust with your people and trust with your customers.
We believe that business is good because it creates value. It is ethical because it is based on voluntary exchange; it is noble because it can elevate our existence, and it is heroic because it lifts people out of poverty and creates prosperity.
I am confident that partnering my Dollywood Company with a great company like Gaylord will create something truly special.
When a company or an individual compromises one time, whether it's on price or principle, the next compromise is right around the corner.
Subscribe for the occasional hand-picked quote. No noise.