What Makes a Company Exceptional?

culled from:wobi.com

That's the question that led Michael E. Raynor, Deloitte Services LP Director, and Mumtaz Ahmed, Chief Strategy Officer at Deloitte LLP, to start a passionate investigation.  Their goal was to discover what the world's highest performing organizations had in common and understand the factors that were essential for them to assume their position as leaders in the business world.

What they found after analyzing more than 25.000 enterprises across a diverse range of industries, was that each of them shared what they called “The Three Rules”. They have since turned their findings into a fascinating new book, “The Three Rules: How exceptional Companies Think”.  Continue reading to find out more about each of the rules.

Rule No. 1: Better before cheaper

When it comes to how you differentiate yourself from the competition, seek out a position based on non-price value -- that is, performance, broadly understood. Do not compete on price. Price-based competition can work, but only rarely does it drive exceptional performance.

Rule No. 2: Revenue before cost

Driving superior profitability means having some combination of higher revenue and lower costs than your competition. The advantages of higher revenue tend to be more valuable and durable than the advantages of lower cost. Use your differentiated position to charge higher prices or appeal to more customers. Do not try to "cut" your way to greatness. Just like price-based competition, cost advantages can be effective, but only infrequently.

Rule No. 3: There are no other rules

Whatever competitive or environmental changes or challenges you might face, do not give up on the first two rules. Everything else is up for grabs. Everything. Change whatever you must about your business -- your markets, your technologies, your people... anything. But no matter what, stick with better before cheaper and revenue before cost.