The issue here is how an organisation differentiates its products or services and the authors use US-based mobile phone operator Nextel Communications as an example that supports their view.
Nextel has had a unique long-range 'walkie-talkie' feature to differentiate its service from other operators' offerings. But this capability, which is enabled by Motorola iDEN technology, made Nextel handsets incompatible with the cellular networks. By 2000, Nextel's debt had grown and its stock price had faltered. Analysts began to doubt that subscribers would continue to embrace the company's 'go-it-alone' strategy. Bigger telecoms firms with deeper pockets and a global reach began to pursue Nextel's core business customers.
Nextel had to convince the world it would be in for the long term and introduced a line of phones that would work on standard networks as well as on iDEN. Nextel was able to show it could continue to compete with its bigger rivals and that it wasn't just a takeover target. Partly because Nextel took a step toward 'undifferentiating' its offering, a drop in subscriber revenues never happened. In fact, Nextel continues to enjoy among the lowest subscriber churn rates in the industry and is considered one of the stronger phone operators today despite its level of debt. Had Nextel become insolvent, subscribers would have been inconvenienced but the expense of switching operators would have been tolerable.
But organisations differentiate themselves in many ways. For example, at London Mortgage Company we attempt to deliver higher levels of customer service than our competitors. If we ever found ourselves in financial difficulty it would be suicidal for us to undifferentiate ourselves by offering a lower level of service to brokers. Furthermore, our differentiator would not deter an intermediary from using us due to the potential switching costs.
Therefore, while I agree with the authors' comments for some organisations, they cannot be applied to every company or market sector. We live in a world of oversupply and every organisation needs a point of differentiation or a positive reputation. Furthermore, those that already have one need to hold on to it and nurture it. Differentiation can come in many forms – an idea, business logic, quality, pricing, packaging, employees, culture or promotion. But if you're not careful the outcome could bad rather than good because bad news travels faster than good. Make a mistake and everyone will hear about it – your customers, your competitors and of, course, the press.
Finding a point of differentiation or a unique selling proposition can be tough, especially for larger organisations that are less nimble and take longer to manage the process of change. Having said that I believe that many managers approach this issue from the wrong angle. They look at their organisations and try to identify a differentiator and if they can't spot one they panic.
But this is taking an inward-looking approach. The question is not – what's unique about my business? It is rather – what do I want to do that's different from everyone else?
A certain pizza company couldn't find anything unique about its business so it invented 'uniqueness'. It realised customers wanted a quick service and worked out how to get a pizza to them in 30 minutes or less. It then came up with the slogan – “Dominos Pizza… In 30 minutes or it's free!” And the moral is – uniqueness has to be invented.
Ask yourself – if you had a free rein would you do differently? Then do it and tell the world about it.
Turning again to the extract, for some organisations 'sameness' is the safe option – it could even be a necessity imposed on a struggling company. But hopefully it will only be a short-term tactic rather than a long-term strategy for any business in this unfortunate situation.
The rest of the time, blind normality is a road to nowhere so I say – start differentiating!