The Equity in Quality
Boost the Bottom-Line by Propelling Business Performance Forward

The Disney Company rereleases a fifty-year-old animated film, and it makes millions.
Apple creates a cell phone, and the world holds its breath.
Toyota makes a hybrid car, and in the era of $4 per gallon gasoline the Prius becomes a legend.

Performance Enhancement or Marketing Splash?

If you only have $10,000 to improve your business, should you pour it into a marketing initiative or a performance initiative? I vote for investing $8,000 into enhancing performance and $2,000 into letting the world know about the improved level of performance. The long-term payback will be extraordinary.

The quality you provide to customers is the value they receive from the performance of your products and services.

Quality refers to the number of mistakes per million parts in a manufacturing process. It also refers to the refreshing taste of a dessert at a frozen custard stand and the speed with which a pizza is delivered and the friendliness of a hostess at a local restaurant. Your marketing theme will soon be ridiculed if the actual performance doesn't live up to the promises made. On the other hand, your customers and prospects do need to know about the quality you have to offer.

Quality Builds the Brand

Here's a phrase-association game. What do you think of when you read the following:

• An amazingly well-designed, user-friendly computer.`..
• Entertainment for all members of the family...
• A cup of coffee so delicious it feels like a reward...

Apple, Disney, and Starbucks first created incredible quality, and then they became known for that quality. Notice: high quality first, great brand second. The brand attracts and keeps lots and lots of great customers, but you can't successfully advertise what doesn't exist.

Then the challenge becomes constantly enhancing the quality you deliver. Google is fast on the heels of Apple, DreamWorks Animation is attacking Disney/Pixar Animation, and McDonald's is rapidly closing the gap on premium coffee with Starbuck's. Quality is a dynamic entity. You never check it off your to-do list. You improve it every day, or you fall backward.

The same method for enhancing quality can be used no matter what business you are in.

Five Steps to Creating Breakthrough Quality

1. Define the performance business you are in.

   Disney/Pixar Animation Studio is in the motion and emotion performance business. Their quality is wrapped up in visually appealing and emotionally appealing films. When Pixar's standard of quality became dramatically greater than that of Disney's animated films, Disney bought them out and put them in charge.

   What performance are customers looking for from you? Do your customers desire you to deliver faster (FedEx), break down less often (Toyota), make the purchasing process easier (amazon.com), deliver breakthrough ideas (IDEO), or deliver fast, accurate, and friendly service (McDonald's)?

   Don't be married to a certain product, service, or profit margin. Focus on the performance you are expected to deliver. According to the June 11, 2007 issue of BusinessWeek, 3M almost smothered its creativity through Six Sigma. 3M is expected to perform as an innovative company. Potentially ruining that creative culture in exchange for short-term profits was not a good trade off.

2. Identify your current standard.

   So how are you really performing in the areas that customers expect you to perform in? Go ask your customers a simple question: "In terms of our performance for you, what are we doing really well, what are we average or below average at doing compared to what you want, and how could we perform better for you?" If you ask fifteen customers that question, you will start to get an idea of your current reality.

   Then shop the competition. Study the performance they are delivering. Look at it from the customer's point of view. Even a subtle idea like having a greeter in a quick-service restaurant can be a difference maker. What is the competition doing better than you right now?

3. Focus on only two points.

   As you work to enhance quality, focus on only two points: the point just ahead of the best performer in the world and the point just ahead of where you are right now. Who is the best performer in the world in your particular area? What makes that organization's performance better than yours? That is the only point that matters to customers. They want to be with the best of the best.

   While keeping the highest standard in the world in mind, focus your efforts on getting to the point just ahead of where you are right now. Each day move forward one step in terms of providing greater quality. And keep moving until you reach the spot just ahead of the best performer in the world.

4. The Tiger Woods Syndrome.

   There is one danger to be on the look out for. One day YOU will be the best in the world in your particular performance area. Then what do you do? Tiger Woods and Michael Jordan faced that problem, but instead of looking back at the second best performer they kept their eyes focused on raising their own performance bar.

   If you are the best performer in the world, ask yourself one simple question, "How can I make tomorrow better than today in terms of the performance I provide my customers?"

5. Loop back with customers.

   Customers have a neat way of keeping companies grounded in reality. Just in case you thought about coasting on past performances or a powerful brand, remember that customers don't care about past performances or great brands. Continue to engage customers in meaningful conversations about the quality they receive from you and what would make it better.

Equity Increases as Quality Rises

Every time you increase your relevant business performance to customers, it's like putting money in the bank. Customers become more loyal, they purchase more of your products and services, they tell other people about the quality you offer, and they keep coming back for years and years. Quality is the real secret formula for long-term success.

For five summers during high school and college, I worked for Ted Drewes Frozen Custard in St. Louis, which was named by USA Today as one of the ten best places in the United States to buy ice cream or frozen custard. Fifteen years after I left that job, I was talking with Ted Drewes. I asked him for the secret to his success. He said, "Quality. We never, ever shortchanged our customers on the quality of our ingredients. We paid more so the customers always received the best strawberries and peaches and bananas and frozen custard. That's my secret." And next time you're in St. Louis go stand in line at Ted Drewes Frozen Custard. It will be worth it.

Resource Recommendations:

Documentary on Tiger Woods.

A few weeks ago I watched an extraordinary three-hour documentary on Tiger Woods on The Golf Channel. I don't play golf, and I rarely have seen The Golf Channel. However, I was flipping through channels and landed on this amazing set of interviews. The insights from Tiger Woods on sustained excellence were incredible. Then I found out you can order the three-dvd set at thegolfchannel.com. I ordered one myself. Can't wait to watch it again. Here's the link: http://www.thegolfchannel.com/core.aspx?page=5005&select=174

Take care and have a great month!

Dan Coughlin

Accelerate Update This section is always current to the current month

I suppose every book changes an author's life to a certain degree. My first book, which was self-published in 1995, was called Inside Out: A Catalyst for Conscious Living. It's out of print now for a number of good reasons. The layout, which yours truly did, looks like something a first grader could do today. And the ideas are very theoretical, which doesn't fit my approach anymore. However, I read the book a few months ago, and I was pleased by how clearly I had explained my early thoughts on improving performance.

My second book, Corporate Catalysts: How to Make Your Company More Successful, Whatever Your Title, Income, or Authority was published in 2005 by Career Press. That book was a step forward in clarifying my ideas on improving performance and understanding how to write a whole book. It's one thing to dream about getting a book contract and another thing to write a 70,000 word manuscript.

My third book, ACCELERATE: 20 Practical Lessons to Boost Momentum, which was published in May 2007 by Kaplan Publishing, has changed my business dramatically. Up until that book was published, I mostly did projects for four companies: McDonald's, Marriott, GSD&M, and Toyota. In the past 12 months, I've worked with business owners, executives, and managers within dozens of small, medium, and massive organizations in more than 20 industries ranging from boats to banks to software to financial services to trucking to lighting to home healthcare to hospitals to optometrists. It's been an exciting adventure.

If you want to see my speaking calendar for 2008, which we'll try to update every two weeks, please click here.

Currently, I have 66 speeches scheduled for 2008. If you would like for me to speak at one of your events in 2008 or 2009, feel free to contact me at dan@thecoughlincompany.com and I will be glad to see if we can make it work.

If you want to see my speaking topics and a video of footage from some of my keynote speeches, please click here.

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