"Define your own targets and standards"
If we want to learn to differentiate, I think Kelleher's admonition to define our own targets and standards is essential to achieve that end.
Just think in terms of the sub-prime mortgage fiasco and you can see one of the many aspects that are important here.
Banks and financial institutions jumped over one another to provide risky loans because other businesses were putting up some short-term numbers that could make them look bad or present them as underperformers. So rather than adhere to very specific targets and standards, they looked at the numbers of another company and ran to beat them. We now know the results of running a business like that. They all ran as a herd, and they've all went down as a herd.
What defining your own targets and standards does is provide a framework of discipline to work within. Know what you're shooting for and how you want to get there, provides with it a built-in mechanism which also brings an inner timeclock with it.
So when you look at what you're measuring according to your targets, you have a solid idea on how you're doing, and what needs to be done or tweaked to line up with your goals.
If we define our business by others targets and standards, then what are we in business for? We may as well merge with or sell our business to them, because they'd be one and the same to consumers. There wouldn't be any competitive advantage.
While we need to know what our competitors and the market are doing, it's for the purpose of measuring our progress, not to copy their standards and targets. Many times they can be far below ours, and we lower ourselves to be like them, rather than stand out from the crowd.
When Herb Kelleher ran Southwest Airlines (LUV), you definitely knew their standards and the company had their unique targets they reached for across a variety of categories. They didn't for the most part try to copy someone else. Why would they? At the time they were the only company who year after year produced healthy profits in the industry they competed in.
Other Herb Kelleher Sources:
Herb Kelleher on the Record, Part 1
Belief Model for The Leadership of Herb Kelleher (Southwest Airlines)
Herb Kelleher, Chairman, CEO and President, Southwest Airlines
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A brief introduction about Herb Kelleher at: http://www.swamedia.com/swamedia/bios/herb_kelleher.html seems a good epitome about his big success. He moved mountains while establishing Southwest Airlines. And Southwest Airlines has created a recipe for success by being innovative and placing great value on its customers and employees. I got to know a book about his story seems very good. His brilliance is shared in this book. Here is the book I found: http://dealstudio.com/searchdeals.php?deal_id=71506 , Anyone who wants to see what it is like to work for an organization that puts its employees first, try this book.
Posted by: Elaine | December 5, 2007 7:27 AM | Permalink to Comment