It’s not often that I read a book twice. So when the MRAA team was recently assigned “Good to Great” by Jim Collins, I wasn’t exactly excited. But once I got started, all that changed. The second time around, this classic seems even more relevant to the issues our industry is facing.
In the book, the author and his team share the results of their research into what sets great companies – those who deliver extraordinary results – apart from those who are merely good.
Listening to the customer
In Chapter Four, the author tells the story of Kroger and A&P, two traditional grocery store chains entering the 1970s, a time during which the needs and desires of their customers were changing fast.
Both had survived more than 80 years in the grocery store business, both recognized that change was taking place, and both conducted experiments with new methods and models to determine exactly what the customer was looking for, according to Collins. What ultimately separated the two companies is what they did with the information collected during these experiments.
While its experiments were a success, A&P didn’t like the direction it suggested for the company as a whole, so it closed the experimental store and “began a pattern of lurching from one strategy to another, always looking for a single-stroke solution to its problems,” Collins writes. The result was an even faster decline.
Meanwhile, Kroger confronted the brutal truth that the old-model grocery store, which accounted for nearly 100 percent of its business, was going to become extinct and acted on it. During the next 20 years, the company eliminated, changed or replaced every single store and departed every single region that did not fit these new realities. And by 1999, it had become the No. 1 grocery chain in America.
Hearing the truth
Great companies, according to Collins, seek out “the brutal facts of their current reality” and create a culture “where the truth is heard” and acted upon.
That begs the question: On this quest for the brutal truth, where do we look? It’s certainly part of what MRAA is trying to get at with the Marine Retailer Pulse Report – a monthly dealer survey we conduct in partnership with Baird Research, which provides participants with a window into the challenges, opportunities and outcomes of their fellow dealers.
It’s part of what many of you are looking for when you join a 20 Group, read a trade magazine like this one or attend industry events. It’s the goal behind creating a process to track customer satisfaction and loyalty in your business – or track activity on your website and social media accounts. And it’s what you receive when you work with companies like Statistical Surveys or Info-Link to determine what boats consumers are buying in your local market.
Collins recommends the following best practices to create a climate where the truth is heard.
• Lead with questions, not answers. When you have the right employees on board, your job as their leader is to ask the right questions, not to give them the answers.
• Engage in dialogue and debate, not coercion.
• Conduct autopsies, without blame. Explore failed initiatives to understand why they were unsuccessful and learn from those mistakes.
• Build red flag mechanisms. It’s not lack of information that hampers companies, but rather lack of action taken as a result of that information.
The changing world of groceries and boats
The grocery market of the 70s has a lot in common with today’s boating market. Both are marked by changes in the way consumers shop for and buy products.
Collins found no evidence that great companies had more or better information than the others. The results are clear: What makes the difference is how you respond to it.
Liz Walz is vice president of MRAA. To learn more, visit www.mraa.com or email her at email@example.com.
The first approach reminds me of a company briefing I attended some years ago. At the end, the presenter asks for questions and comments, whereupon a member of the audience pointed out a contradiction in the presentation. To which the presenter replied: 'Don't confuse me with the facts - my mind's made up'. He was joking of course. But it's a common attitude with people and companies for whom the news is not what they hoped for.