What is World Class?

World class is not about perfection, but rather beating or outperforming your competition in the important things that your customers care about and are willing to pay for. Why do people buy Toyotas?

What do we mean by world class?

Over the last few years, I have facilitated business sessions on productivity with business leaders, based on this fundamental question. What I have found interesting is the majority of them don’t know what world class is.

They believe it is something to aspire to, that is probably unachievable, but they can’t actually define what it is.

Of course, it is different if you ask them what isn’t world class, or to describe the last world class experience they had.  If you were to ask them to list examples of companies they would consider to be world class, I’m certain that a range of great restaurants, Air New Zealand, Apple and others, would populate these lists.  World class is not about perfection, but rather beating or outperforming your competition in the important things that your customers care about and are willing to pay for. Why do people buy Toyotas?

They are reliable (quality) and people pay more for them because of this. Toyota has figured out how to make cars cheaper and more reliable than anyone else by focusing on delivering this value.

For perspective, Toyota identifies over one million improvements per year, or over six per employee, and over 90% of those improvements are implemented. How do you compare?

Unfortunately, over the last 10 years, when posed the question whether they have asked their own customers why they choose them or what they value, 90% of SME’s responded that they did not know!  Almost none of them have segmented their customers to figure out what the different customer segments value.  As a result, they have misaligned systems and processes and are failing to deliver value as efficiently and productively as possible.

Consider the value proposition of Air New Zealand versus Jetstar. One is targeting customers who like higher levels of service and experience, whilst the other is targeting value focused travellers.  The systems and processes of both businesses are aligned with delivering this outcome. One provides lounges and food etc and the other minimises costs.

If you can determine what your market values in each segment and which is the most profitable, and deliver this value better than your competition, then you are world class and you will survive and grow. This is a strategic competitive advantage that needs to be understood throughout your organisation and protected.

In dairy, Kiwis are among the lowest cost producers on the farm because of our great farming practices and our natural advantages to grow grass.  In a commodity environment, being the low-cost producer is the only strategy. We make the world’s best respirators at Fisher & Paykel Healthcare, and their ability to innovate in this area is a competitive advantage.

We make the world’s best Sauvignon Blanc, grow amazing kiwifruit, apples, avocados and other foods (manuka honey etc); this is because of our innovative practices and genetics (varietals), our natural advantage (soil, microclimates, geography) and our can do attitude.

Now, imagine what we could achieve if we combined the range of amazing products and services we have with a clearly aligned competitive strategy to deliver outstanding customer value.  Imagine if everyone in the organisation was aligned to delivering that benefit throughout the entire value chain and driving improvements to achieve this result, every day.

Imagine if we had all the right people, with the right skills, relentlessly focused on delivering this value better than our competitors.

This is what world class New Zealand looks like. If you want to make your business better, then start looking at the value you are delivering and how you compare with your competitors.

Let’s get on with this New Zealand!

By Ian Walsh, Managing Director - Intent Group NZ

If you'd like to meet and chat about how we can help you and your organisations on it's journey to World Class then get in touch with Ian on 027 534 9258 / email iwalsh@intentgroup.co.nz or local contact Antony Gibson on 021 161 9705