The Harvard Business Review article, “Three Rules For Making A Company Truly Great,” reveals that high-performing companies consistently share three fundamental strategies. I found them to not only be interesting, but extremely applicable to the commercial real estate clients we serve.
Rule No. 1: Better before cheaper. It is best to compete on differentiators other than price, the authors write:“Every company faces a choice—It can compete mainly by offering superior non-price benefits, such as a great brand, an exciting style, or excellent functionality, durability, or convenience; or it can meet some minimal acceptable standard along these dimensions and try to attract customers with lower prices. Average Joes typically compete on price.”
As we consult with our clients on profitability, growth, and cost reduction, we have the duty to remind them of the points of differentiation that will sustain them as great not average. We hope to help them capitalize and leverage the points of differentiation that validate the worth of their products and services. Again, we come to the table speaking an overall business strategy that eventually circles back into their corporate real estate strategy.
Rule No. 2: Increasing revenue trumps cost reductions. Companies tend to lead the discussions with the reduction of cost, and corporate real estate seems to always be a part of that reduction. In some cases, this is imperative; however, what if we were to offer greater insight into their business and help shape thought leadership around increasing revenue? This allows us to take a strategic look at their portfolio beyond the norm of cost-reduction strategies. Our discussions can broaden into greater areas of change and capability, such as future growth plans and the analytical dissection of market intelligence.
These kinds of topics gear our discussions into strategically discussing their overall business strategies. Our conversation broadens, trust increases, and a partnership is truly formed for growth and innovation with our client. The HBR authors write: “Companies must not only create value but also capture it in the form of profits. By an overwhelming margin, exceptional companies garner superior profits by achieving higher revenue than their rivals, through either higher prices or greater volume.”
As service providers, we can provide thought leadership around how our clients may increase revenue internally, as well as externally. Internally analyzing how their organization works, streamlining processes, and looking at work place strategy helps the CRE executive to have a place at the “executive table” as a profit-driver, not a cost-reduction entity.
Rule No. 3: There are no other rules. Change whatever must change to make sure the first two rules are followed: “The first step in making use of the rules is to get a clear picture of your company’s competitive position and profitability formula. Our experience shows that many senior leaders lack that clarity, primarily because companies tend to put too much emphasis on comparing their present selves with their past selves and too often declare victory if they’ve improved. What they forget is that you compete only with your current rivals.”
Our goal as CRE professionals is to help companies identify all other external and internal forces that drive the success of growth in profitability, innovation, and market share. We should help to bring clarity on our client’s competitive position in the market place in order to drive priority in innovation, market share, and revenue growth.
When we come to the table properly armed with the market intelligence and well-formulated ideas; we help our clients to see and look in areas they’ve never before discovered. We can provide greater insight and thought on current solutions, and help to create new ideas for exploration. This article intrigued me to go further and dig deeper for client solutions beyond the norm.
