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The Well-Aligned Enterprise Using the Right Operating Principle Goes Further

Feb 27, 2008
Most organizations make it too hard for leaders and their colleagues to understand what must be done. They publish long lists of values and proper actions, but those lists overwhelm those who seek true understanding . . . especially when a new circumstance arises.

A much better approach is to identify a key operating principle that everyone can easily apply to whatever situation comes up. This not only saves time; it also encourages action over inaction.

Let's look at an example. Charles Schwab, the discount stock broker, has always based its business on providing good service to its customers at the lowest possible cost. That's the key operating principle that guides everything done at Charles Schwab.

It turns out that this operating philosophy is a perfect fit for what customers want and matches a key irresistible force in the brokerage industry. Let's see why.

In the early days, the company found that customers who placed an order to buy or sell a security wanted to find out what had happened to their orders. Charles Schwab obliged its customers by placing calls promptly to let them know. To reduce its costs to provide this service, the company became a pioneer in developing computer systems to give its customers more information.

Experience with this dual approach of providing more help but at lower cost caused the company to think about other areas where customers would also like more help, at low cost. One innovation was the One Source service, where customers could buy or sell any of hundreds of mutual funds through Charles Schwab at no cost, and receive the convenience of one account statement for all these transactions. The company blossomed and became a pioneer and the early leader in Internet-based stock trading as well.

Charles Schwab continues to be a pioneer in offering new services based on computer systems that enhance service while reducing costs for everyone. That's another breakthrough solution.

Is your enterprise effectively aligned to serve the irresistible force of customer demand for better services, more services, and lower costs?

What operating principle could you employ? Does the operating principle at Charles Schwab fit your industry's irresistible forces?

A good way to encapsulate such a principle is to also tell a story that will exemplify the principle. At Charles Schwab, for instance, people hear about the early days of making all of those telephone calls.

Today's version of that story was captured by a new advertisement that Charles Schwab is running on television. In the ad, a customer talks about how easy it is to consolidate retirement accounts and operate a Schwab on-line account. How does Schwab do it? They assign a concierge to do all the heavy lifting of making these changes and helping the new customer learn how to use the on-line tools.

Couldn't you use a concierge to do heavy lifting when you are the customer?
About the Author
Donald Mitchell is an author of seven books including Adventures of an Optimist, The 2,000 Percent Squared Solution, The 2,000 Percent Solution, The 2,000 Percent Solution Workbook, The Irresistible Growth Enterprise, and The Ultimate Competitive Advantage. Read about creating breakthroughs through 2,000 percent solutions and receive tips by e-mail by registering for free at

http://www.2000percentsolution.com .
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