The discipline of not being all things to all people
One of the most moving example of leadership that I found while researching my book Trade-Off: Why Some Things Catch On and Others Don't turned up in a small-town agency that helps people with disabilities find jobs.
That agency, in Washington, N.C., is run by Daniel Stevens, and the agency's job is not easy. "Appeals to the heart don't work," Stevens told me. "One thing you don't ask is what kind of employee a manager is looking for. They'll describe an ideal employee." The agency often can't supply an ideal employee. So how could the agency be more effective in finding jobs for its clients?
Stevens worked through his dilemma by thinking about the trade-offs between fidelity (the quality of an experience) and convenience (the ease of getting it) -- the very trade-offs that were at the heart of my research into the way some of the smartest CEOs and entrepreneurs think about their strategies.
A lot of CEOs manage by understanding that customers are willing to give up convenience for great fidelity, or ditch fidelity for great convenience. Products or services that offer just so-so fidelity and so-so convenience fall into a no-man's-land of customer apathy that I call the "fidelity belly." That's where music CDs and newspapers find themselves today. The most successful products and services tend to be either high in fidelity or high in convenience -- one or the other, but not both.
As Stevens figured out, the "ideal" employee is a high-fidelity employee. But high fidelity employees are hard -- i.e. inconvenient -- to find.
On the other hand, the "real" employee is someone who is ready and available right now. Even if he or she doesn't have every skill an employer might ideally want, the convenience of having a "good-enough" prospect ready to jump into a critical vacancy is often a convenience managers appreciate. "If the dishwasher just quit, that's when a manager feels like he needs to hire a dishwasher right away," Steven said.
Stevens' agency was trying to sell a product (disabled job-seekers) that customers (business managers) saw as of lesser quality, yet the agency's approach didn't focus on the big plus they did offer: ready-to-work employees. As a result, employers didn't see Stevens's clients as high convenience either. Stevens' agency fell into the fidelity belly.
Stevens had the courage to admit that his agency needed to change, and he pushed his office to try a different approach -- by focusing on convenience. If his agency could become the employment agency of convenience -- i.e. we quickly supply good-enough employees to your door, ready to work -- it should have more success than when it fell into the gray middle area of so-so convenience and so-so fidelity.
"We implemented this [focus on convenience] one year ago with just a few offices," Stevens told me in late 2008. "When compared with their numbers from last year, these offices are having increased success."
Looking through the lens the fidelity-convenience trade-off, we see managers and leaders in a new way. Even if they don't consciously map out those trade-offs, good leaders seem to innately know they need to manage them and be disciplined about driving toward either high fidelity or high convenience.
Let me give you another example, one that's the polar opposite of Stevens and his agency.
Perhaps no one in business understands fidelity better than casino owner Steve Wynn. Growing up, his father ran a string of bingo parlors in the Northeast. He took over the family operation and leveraged it to buy a small stake in the Frontier Hotel and Casino in Las Vegas in the 1960s. He eventually bought controlling interest of The Golden Nugget, renovating it from a shabby casino into a resort. In the 1980s, he spent $630 million building the Mirage on Las Vegas' strip, and its size and luxuriousness topped anything in the city at the time. Wynn next constructed Treasure Island on The Strip and then the $1.6 billion Bellagio. In the 2000s, he topped them all by building the Wynn for $2.7 billion.
At each step, Wynn built a hotel and casino that topped his competitors not by just a little, but by a huge margin -- and put him in the highest-fidelity position. Each time, other developers followed by matching or going just beyond Wynn's standard. And each time, Wynn responded with a project that leapt far beyond competing properties and reclaimed the high-fidelity position. Of course, each response was a costly, risky bet. He kept reaching out to do something no one had done before. But that's the key to super-fidelity, and the approach seems to be part of Wynn's very fiber.
Starbucks stalled in the mid-2000s because its leaders didn't stay disciplined about keeping Starbucks a high-fidelity brand. Wal-Mart stumbled in the same time period when its CEO forgot Wal-Mart was all about convenience and tried to do upscale clothing lines advertised in Vogue. Good leaders, like Stevens and Wynn, understand the fidelity-convenience trade-offs and have the courage to act on them.
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