Mayflies and Legends
Differentiation of organizational structures and processes as decisive success criteria
Differentiation is frequently defined in terms of product differences related to service, advertising, or brands. But an oversimplification of differentiation to nothing more than these factors would be fatal for the long-term success of a company. Instead, the prerequisites for sustained competitive advantages in the form of the ability to change through flexible organizational structures, processes, and a corporate culture which encourages creativity are indispensable.
Everyone would like to be successful. But what is really the background to success, and how can it be assured long-term? Let’s take Apple as an example. Apple has been a successful player in the hardware and software business for more than 30 years and has constantly reinvented itself, consciously emphasized its differences, and, by doing so, become one of the most respected companies in the world. So one could come to the conclusion that companies which carry on activities unique in comparison with the other players on the market are more successful. Companies like to write differentiation in huge capital letters, trusting it as an instrument which will secure their uniqueness. But what does differentiation mean, what good does it do, and how can it be realized?
Faster, higher, farther? Different!
Human beings are herd animals. When everyone else runs off in one direction, they run with them. No one knows just why they are doing this, but it is assumed that those following the crowd have a good reason for doing so. Companies act in very similar ways. Are competitors centralizing their organizations and entering new markets? Then we want to, too, and we want to be better than the others! But the analysis of whether going along with the crowd is really sensible is often given short shrift. Is a centralized organizational structure, for example, really a good fit with the company’s own business activities? Are the quantitative and qualitative resources required to prevail on these new markets available? Companies which enjoy long-term success do not simply look around at what others are doing and then keep pace with them. They have taken to heart Socrates’ “Know thyself!” – which in this case means that they analyze their special strengths and identify the markets where these specific strengths are in demand.
So differentiation is a way of defeating the competition by stepping away from it. The differentiated product line is essentially a monopoly or an oligopoly on a niche market. The company offers such a specific service that it can more or less set its own prices. Customers have no choice but to procure this service from this provider because he is the only one offering this particular product in this particular form.Next page