This issue is about teamwork and working towards common goals. To achieve this effective, three-way internal communication is key (up, down and across).
With reference to the author's comments about brokers, I often hear it said that there are over 4,000 mortgage products on the UK market at any given time, so perhaps consumer choice in the mortgage market has gone a step too far. This has led some lenders to go full circle and actually reduce the size of their product range and to start advertising the fact to the consumer as a benefit. Lenders' advertisements along the lines of 'less is more', 'we take the hassle out of choosing a mortgage' and so on are becoming the norm. Given that the consumer simply wants to buy the home they want and sees choosing a mortgage as an irritable chore that they must do to realise their dream, lenders' marketing people seem to be adopting a sensible approach.
Although this will have an impact on the mortgage intermediary, the result is likely to be a change in how they communicate with the consumer rather than to reduce or eliminate their value in the chain. After all, even if each lender reduced their product range to, say, four, the consumer will always need advice about which of the four is most suitable and which lender they should apply to. So with reference to the extract, here we have the operations people, i.e. lenders, reducing consumer choice and the sales people, i.e. brokers, still having a key role to play in advising the consumer. The customer also benefits from less choice but still needs choice and guidance.
The sales and marketing teams in most organisations are focussed on choice and flexibility so that they have an attractive range of products or services to meet the needs of their target audience, and they want to sell as cheaply as possible to maximise sales. So the marketing department wants short lead times and huge variety, while the operations guys want long lead times and limited variety. Operations actually need to design the choice and make sure the products and services work. Conflict can arise because each function is compensated differently. Operations executives make their money on cost reduction, not volume. Marketing and sales people typically have a remuneration package linked to sales in one way or other. It's about good communication and teamwork and working towards common, company-wide objectives.
To address these issues, strong leadership from the top is required and good internal communication between the departments. Many difficulties companies have with customisation relate to how clearly the company understands its business. For example, all staff should be trained around the company's vision and mission that covers mutual aspects such as quality and reliability – it's about creating a common understanding. A mutual understanding across the company of both the true cost and the value of its products and services is essential for all internal functions to work in harmony.
The full article from which this extract was taken also makes a good point about understanding your customers to avoid internal conflict. The authors say: “Companies with a high level of operational efficiency often have a clear sense of their most desirable customer. For instance, Dell does provide a lot of value, but if you don't know a lot about computers and you don't want to wait two or three weeks, it doesn't want to do business with you. Southwest is another company whose operational efficiency is driven by a clear idea of who its customers are and the kind of value they are looking for in an airline. If you feel that you want to be called by your first name and you want an assigned seat and you want to be part of a frequent flier club and so on, Southwest says: 'Sorry, you're not our customer'.
So, internal conflict between operations and sales and marketing can be addressed. The key issue is teamwork and clear and effective three-way communication driven from the top down.