When Bad Things Happen to Good People was a popular book once upon a time (1983, to be precise). But it was based on a false premise — that bad things happening to good people is somehow puzzling or unusual.
It is, of course, neither. As I pointed out a few years later, it’s When Good Things Happen to Bad People“ we find seriously annoying, and stupidly common.
Last week’s missive asked about the commercial version of this — how so many businesses that are, according to the dictates of evidence, logic, and standard formulations of what constitutes a well-run business, poorly run, do so well. And continue to do so well, not only for short bubble-like periods but for decades at a time.
I’ve run across a few theories regarding this distressing phenomenon over the years. Isaac Asimov proposed, for example, that “The lesson of history is that it isn’t who outsmarts whom that matters. It’s who out-stupids whom.”
Another, which I don’t like at all but that seems to fit the evidence well enough that we can’t just discard it out of hand, is that businesses only need to do one or two things really well. The rest they just need to be good enough at to muddle through.
This isn’t as preposterous as it might seem. To understand why, consider the Case of the Perturbed Perfectionist.
As pointed out in this space once upon a time, to the perfectionist the world is an infinite pile of flaws, each and every one of which must be ferreted out and fixed.
It isn’t that flaws are good things. It’s that, to put it in automotive terms, no matter how repairs you make, you won’t turn a Gremlin into a Bentley. Which is why, I think, Six Sigma is so often disappointing: Minimizing variation results in better Gremlins, not better cars.
Which in business leads to the only question that matters: What customers care about when deciding between your product, a competing product, and not buying anything at all.
The list of what customers care about isn’t all that long. Customers, defined as people who make or strongly influence the buying decision, care about:
- Product assortment
- Convenience, which includes support and service
- Quality (that is, absence of defects)
- Image (visibility, perceived coolness, brand, liking the sales rep …)
This list isn’t comprehensive, but it’s close enough, because what matters is that different customers in different markets will rank these differently. In most markets only a few matter very much, but it’s a different few for different markets.
Take, for example, the benefits manager responsible for choosing her company’s group health insurance provider. Price and convenience will matter a lot. The rest will range from mattering a little to who cares?
For an insurer, great pricing comes from the actuarial and underwriting functions, accurate provider scoring and negotiated discounts, and ferociously efficient claims processing. Convenience mostly translates to customer service … at the benefits manager level, that is. Business functions that don’t contribute to these are business functions where being good enough is probably good enough.
Which is different from say, a company that retails consumer electronics on line.
For e-tailers, like health insurers success depends on price and convenience, and price does depends in part on how effectively merchants negotiate with vendors, and how well procurement negotiates shipping rates. In place of claims processing, e-tailers need ferociously efficient warehouse fulfillment operations (pick, pack, and ship).
Convenience comes mostly from merchandising, only it’s web merchandising. Image depends on advertising.
For e-tailers, unlike health insurers, their product assortment matters a lot. For some but not all, so does image. The former? Merchandizing again — how accurately merchants predict which products will be most interesting to customers. The latter usually belongs to an ad agency.
So for e-tailers, anything that doesn’t improve merchandising and warehouse operations falls into the just-good-enough pile.
Here’s what this means to you.
Unlike flaws, the pile of money and executive attention available for investing in business success is far from infinite. Where you can convincingly connect the dots between what your organization does within the business to one of the short-listed success factors, you can argue for more of this pile.
That’s quite different from anything else you do. If you want some of the pile for those responsibilities, you have a harder case to make:
That without more budget you can’t achieve the exalted state of good enough.