Great Companies Know How to be Bad

What does your business do well? Every CEO can answer that question. There's an important follow up question. What do you consciously decide to do poorly? After a confused look, I typically am asked "What do you mean by that? We're a top notch company, we know how to execute."

You can't be all things to all people - yet too many companies try to do just that. Professor Francis Frei of the Harvard Business School focuses on Service Excellence and has concluded that great companies know how to be bad. They're focused on a specific value proposition, customer, or product. They ignore opportunities outside their focus area.

Southwest Airlines provides an excellent example. Their value proposition - a cheap fare no frills airline. What are they bad at? No deluxe service - there's no first class cabin and no food on flights. No transcontinental service. No reserved seats. You can't comparison shop their fares as easily as other airlines because they don't publish their fares on aggregator sites. They are focused on the frugal traveler and its that focus that enables them to be great.

As a company's market matures, the common strategy is to look for new markets to exploit. But be careful that these new opportunities don't require the organization to get good at something it needs to be bad at to maintain its competitive advantage.

With that framework, do you know what your company consciously decides to do badly?