Published on: March 1, 2007To hear Kevin Coupe’s weekly radio commentary, click on the “MNB Radio” icon on the left hand side of the home page, or just go to:
Or, to simply read the commentary in text form, continue below…
Hi, I’m Kevin Coupe, and this is MorningNewsBeat Radio, brought to you by Webstop, your first stop for retail website design services.
I’ve been thinking a lot lately about the difference…or maybe it is the confluence…of effectiveness and efficiency. Ideally, it seems to me, companies should try to pursue both simultaneously…but it is when efficiency becomes the primary goal, even when sacrificing some of the essential values that caused the business to be created to begin with, that a company really begins to suffer. Customers can tell pretty quickly when there has been a shift in priorities, and so can employees. The result is rarely a good one.
This week alone, the struggle between efficiency and effectiveness has come into sharp relief with the reporting on two companies – Whole Foods and Starbucks – that have been far more than just retail entities. They’ve become cultural icons, because they have represented something more than the selling of organic and natural foods and coffee. And so, when there is even a hint that shifting priorities may be altering the DNA that allowed them to occupy special positions in consumers’ consciousness, there is an almost immediate backlash.
At Whole Foods, where the company is acquiring Wild Oats, the question is whether management has grown to be out of synch with its core consumers – who in fact may view the retailer as being too big, too mainstream, to effectively represent their interests and priorities. Whole Foods management has to figure out how to manage the often conflicting expectations of Main Street and Wall Street – growing and becoming more efficient while at the same time not losing the essence that has made Whole Foods so special.
Starbucks actually managed to get ahead of the criticism when a memo by company chairman Howard Schultz questioned whether the company was moving away from its core competency – coffee – and from the theatrical and unique in-store experiences that were the foundation for the company’s growth. The suggestion seems to be that if it is not careful Starbucks could become this year’s Krispy Kreme…though I suspect that this isn’t likely to happen. I haven’t had a Krispy Kreme doughnut for some two years, but I can’t imagine going that long without drinking a venti skim latte. And I think there are a lot of people who would feel the same way…and besides, I think Starbucks’ management is a lot more on the ball than Krispy Kreme’s.
Last week, I had a couple of speeches in Florida, which meant I had the opportunity to do something I hadn’t done in a while – do the theme park thing. On my own I wouldn’t have dreamed of it, but my 12-year-old daughter hadn’t been to Disney World, so we figured it was now or never. (Besides, I figure I’m now done with the Disney experience until I have grandchildren, which is probably more than a few years away.)
I mention this because it’s been years since I last went to Disney, and my general impression of the Magic Kingdom was of a theme park that is suffering from wear and tear…which is very different from what Disney would have you believe. It was like the folks at Disney have been so focused on cramming as many people into the parks as possible, and getting as much money from them as possible, that the magic of the experience has somehow been diminished. Epcot and the Disney/MGM studios were marginally better, but not much…though I have to say that the Mission: Space ride in Epcot may be the single best ride I’ve ever been on.
For the most part, I think that perhaps Disney may be losing its way a bit, by focusing more on efficiency than effectiveness. It isn’t wildly obvious because there are so many people in the park, but I think it is likely to become more evident over time unless management steps in and does something about it.
Think about it. Disney. Whole Foods. Starbucks. Three companies that are more than just companies, and they are all facing the same basic problem.
Now think about your company. Do you have the same issues? Are you dealing with them, or ignoring them?
If you have them, and you aren’t facing them head-on, then you are making a mistake that could, in the long run, be fatal.
For MorningNewsBeat Radio, I’m Kevin Coupe.
- KC's View: