Articles

Having received a great deal of attention for decades now, customer satisfaction (CS) practices have become one of the core prescriptions for managers and organizations. Indeed, for many companies, customer satisfaction has become the guiding principle, as they increasingly initiate all manner of strategies and processes under its banner. But more and more, says Fredrik Dahlsten, these practices are losing their effectiveness for companies and their customers alike. Using qualitative research at Volvo Cars, the author illustrates how the interpretation of customer satisfaction can become skewed, employing rigorous and extensive CS measurements, but measuring the wrong variables and using the information in mainly reactive ways. Many companies have only an intrinsic CS focus -- a product orientation based on attribute quality and a short-term internal perspective triggered by surveys and aimed at cost control. With an intrinsic focus, customer satisfaction is seen mostly as the absence of dissatisfaction. In contrast, an extrinsic CS focus emphasizes finding new ways to increase the positive, emotional aspects of the customer experience over time. The author argues that managers who wish to climb out of their customer satisfaction rut must move beyond the mere measurement of quality, refocus their practices on the customer's actual experience and formulate a comprehensive strategy for using that knowledge throughout the organization. He illustrates those concepts by showing how practices at Volvo are being improved to incorporate a greater extrinsic focus and make better use of the resulting customer knowledge.

Leadership consists of opposing strengths, but most leaders overdevelop one strength.

People often talk about business competition as if it’s a short race: Get to market first and you are bound to win. Indeed, the importance of first-mover advantage has been drummed into the heads of many business executives, and some have almost been brainwashed to think that speed is everything. But when a new technology like the Internet threatens to transform an industry, the companies that are quickest to respond aren’t necessarily the ones that reap the greatest benefits. In fact, choosing a fast strategy can lock them into a set of decisions that actually hurt them in the long run. Instead, organizations that choose the right strategy for the entire race & #8212; both for the early and late stages & #8212; will come out ahead. Specifically, we have found that companies that respond quickly by launching a spinoff usually have difficulty achieving true staying power in the market. For enduring success, incumbent companies are better off creating a group that is & #8212; or will eventually be & #8212; integrated within their organizations. Only then will they be able to tap fully into their numerous strengths and assets, leveraging their incumbent’s advantage.

Between 1991 and 2001, the average number of joint-venture deals announced each year increased from 1,000 to 7,000. Executives are clearly setting great store by these temporary partnerships as a way of achieving both short-term and longer-term goals. As with any type of alliance, however, success can be elusive, and a poor relationship between the partners is often at the root of difficulties within a venture. A negative cycle frequently develops in which poor partner relations lead to poor performance, which in turn puts the partner relations under greater pressure. In the course of her work with executives from joint ventures and their parent companies, the author identified five minefields that can explode and damage the relationships in an otherwise fruitful operation. Since joint ventures are here to stay -- they are still sometimes the only way for a company to enter a new market or to gain access to key technology or people -- managers must learn to avoid the minefields if they are to realize the full potential of these strategic partnerships.

Many companies have embraced the notion that to operate effectively in today's economy, it is necessary to become a knowledge-based organization. But few truly understand what that means or how to carry out the changes required to bring it about. Perhaps the most common misunderstanding is the view that the more a company's products or services have knowledge at their core, the more the organization is, by definition, knowledge based. But products and services are only what are visible or tangible to customers -- they're the tip of the iceberg. Like the iceberg, most of what enables a company to produce anything lies below the surface, hidden within the so-called invisible assets of the organization -- its knowledge about what it does, how it does it and why. In the course of working with more than 30 companies over the past eight years, the author found that a knowledge-based organization is made up of four elements. Each one forms a basis for evaluating the degree to which knowledge is an integral part of the organization and the way it competes. Executives who understand how the four elements interact will be able to start changing their companies to take advantage of the intellectual assets hidden below the surface.

Conceptual frameworks provide insight into creating marketing strategies targeted at groups.