I’d also like to give you a couple of examples of how the three schools of competitive strategy in my arrow model are impacting businesses. - for example, Zappos provides a great example.
And I am a bit worried about the number of readers who might be participating in Kris Dunn’s drinking game but my excuse is that Zappos is less well known in the UK than it is now in the US. In addition, I’m posting what I believe is a new insight, not yet another rehash of holocracy or the company’s on-boarding strategy of paying people $2000 to leave (i.e being better lose their investment and this money than have someone hanging around who doesn’t want to be there.)
So for those of you who don’t know, Zappos is an online shoe retailer that was acquired by Amazon a few years ago. In fact it was the very first retailer to sell shoes on-line. This was back in the day when we were buying clothes online and Amazon were selling a lot of books, but the idea that we might also buy shoes off the internet was seen as being a bit odd. It’s such a physical process after all - you need to see the shoes, try them on, sniff them (I’m told)…
But, anyway, Zappos showed it would be done. And this is the first lesson from this story, and a further reinforcement that you can’t hang on to competitive positionings at the bottom of my arrow diagram these days. Zappos showed it could be done, and so everyone else - all other shoe manufacturers and retailers dived in.
Fortunately, Zappos had decided to differentiate themselves in other ways as well. In particular they’d developed a differentiated focus on customer service. After all they knew that if they were to convince people to buy shoes online, they’d need to convince people that if they didn’t like a pair of shoes they could return them with no problems.
Their strategy was also not just about any old customer service, but highly a personalised type of approach. (This is why Amazon bought them - Amazon also does excellence customer service but for them it’s highly automated and they’re interested in moving towards a more personalised approach.)
This is their core competency - personalised customer service. but then we know that this can be copied too.
Fortunately, they’d also decided to differentiate their people and culture. They know that average employees won’t provide the highly person type of customer service they need. So they seek out to employ wacky people - strong personalities who will wow their customers in a way more average people can’t.
So - they differentiate themselves at all three levels in my arrow. But their CEO Tony Hseih points out that it’s the top of the arrow that counts. The fact that they’re an online shoe business is pretty much irrelevant - they could be doing anything. The thing which makes their business special is that they deliver happiness to their wacky people so that these people can deliver happiness to their customers.
And they compete on all three levels but what stands out as most important is their organisational capability in delivering happiness to their wacky people within their wow culture.
So Zappos is a brilliant example of the type of opportunities which re available for businesses and HR and while I’ve been spelling out.
By the way, the other things which Zappos are famous for - particularly its holocratic organisation design and its on boarding strategy - are just best fit consequences of its differentiated organisational capability.
Anyway, do enjoy that drink!
Zappos - Delivering Happiness
My Zappos tour