Imagine you’re sharing news of a transformation to your business – a pivot from what you are doing today. You expect employees and other stakeholders to ask first – “why?” After all, Simon Sinek has aptly reminded us we should ‘start’ there. And, while he’s not wrong, there’s a bigger question that has probably driven us to this point of change – differentiation. If not, it’s possible we are changing for change’s sake.
Ask First, “How will this differentiate us?”
What we need to answer first is “How will this change make us different?” Ultimately to dominate our industry and/or field, we must be different enough to be chosen over the competition. Maybe this means we need to be different enough to: 1. demand a higher than “opening” price point, 2. shift customer expectations swaying buyers to our product, or 3. attract and retain top talent to deliver our service. Whatever your means of disrupting status quo are for your organization, it needs to be just that…a disruption. This usually isn’t just an incremental improvement on what someone else is doing. It’s the step changes that lead to true, sustainable differentiation.
A Step-Change Example: Dominos “Pizza Turnaround”
A favorite example of a strategic differentiation step change is Domino’s Pizza’s decision to “face our critics and reinvent our pizza from the crust up”. They even went on to present a very public change story documenting the transformation which, more than a decade later, is still a good reminder of the value of the ‘voice of customer‘ to drive organization choices. This “Pizza Turnaround” campaign skyrocketed Domino’s popularity – and stock – because they now stand out from the crowd.
Differentiation – By Design
Designing an organization to deliver differentiation has been at the heart of our work for more than two decades. The main differentiation in our own firm’s work is that we create needs-based, customized operating models or organization structures as a way of enabling strategy. The choices we guide executives through result in tailored designs that are uniquely positioned to help them be, well, unique.
Don’t Change for Change’s Sake
It’s easy to see why organizations need to look different on the inside, but executives often ask themselves how the current staffing model lines up with peer benchmarks. We believe benchmarks have value – however, if you work to move your own organization to the benchmark, you might look so much like your competition that you can’t truly compete.
As an example, a CHRO friend’s executive “benchmark” is 1.25 HR people for every 100 employees. This rule feels so hard and fast to the CHRO that she was panicked to learn her team is quite a bit “over” staffed. In this organization, the global footprint adds complexities that don’t allow it to be any leaner than it already is. And, the global footprint is facilitating strategic differentiation as the organization is in growth mode. Perhaps it could get closer to the benchmark in the future once the growth subsides, but then again maybe it needs this model to sustain differentiation. If she makes aggressive moves to get “within benchmark”, it may help competitors catch up in those emerging markets. This is “change for change’s sake” rather than change that drives a new, intentional outcome for the organization.
To Win, “Different” Should Equal “Better”
As a change leader, you likely have a few things keeping you up at night. The best advice we have to optimize your operating model transformations is to prepare to answer the question “How does this change make us different? (A better “different” that allows us to win more business)”. When you have a solid answer to that question, you have what you need to communicate your change in a way that authentically attracts followers who help your organization uniquely position itself to win.