Differentiation is the key for Success

Differentiation is a cultural issue. It is a mindset. It is the way managers create value in the organization and make the organization successful. Many times we keep on thinking about differentiating our products and services. However we find difficulty in coming up with a clear differentiator. I think it is a mindset issue. If we remember Darwin’s principle – “Struggle for existence” and “survival of the fittest”, the answer becomes very clear. We have clear choices- differentiate or die. The moment one internalizes this thought; one starts getting ideas that create differentiation.

The next question that arises is where to create this differentiation? The answer is simple. We can put in a single word – “everywhere” – people, process, product and technology.

Jack Welch showed an excellent example of creating differentiation. 20-70-10 rule was very famous in his management style. It was about classifying people in different buckets. The 10% at the bottom had to go. This created a performance oriented culture, a competitive environment and clarity of goals among people. The outcome was a boost in the performance of the entire organization.

Jack Welch also talked about getting out of the industry if you are not among the top three in any industry. This philosophy brings alive the spirit of differentiation. It helps. You have to look for the best of the class processes and the best of technology.

Life is all about differentiation. You have to keep it up or allow it to die. Companies suffer when every business and person is treated equally and bets are sprinkled all around like rain on the ocean. Each one of us has limited resources. However the winning leaders invest the resources where the payback is the highest. This again is the differentiation principle.

In fact it is very interesting to know that our school system, our play system and any system you can think of is nothing but a model of differentiation. The results are based on classifying people in different buckets. Isn’t this a classic example of differentiation? We all accept this fact in our school days but for some reason we struggle to accept this simple truth in our professional lives. Isn’t this a mindset issue? The answer is simple.

Here are a few myths about differentiation:

1. Differentiation is unfair because it pushes people, and processes out. One needs to understand that sending nonperformer out helps others who stay behind. Also non-performers find their own way and area where they finally emerge as winners. This is an adjustment process and fair to all. The only thing you need to keep in mind is that the system should not be polluted with politics. Keeping the system apolitical is the boss’s job. If the boss fails to keep it apolitical, the decline is certain.

2. Differentiation pits people against one another and undermines teamwork. I would argue that team work is a necessity for creating a great organization. In fact differentiation and team work can be integrated. One can create a differentiation at the team level as well.

3. Differentiation favors people who are energetic and extroverted and undervalues people who are shy and introverted, even if they are talented. Each role has its skill requirements. If being extrovert is a requirement of a role, then differentiation has to be created for it. Shy as well as talented people will emerge in top brackets for different kinds of role.

Therefore, differentiation is the key for success. The leader has to create an environment, a culture which supports differentiation, which is apolitical, and is based on merit. After all, results speak; neither numbers nor the differentiation, Principle lies. It is the ability of the leader to bring differentiation that is important and needs to be tweaked for achieving success. The bottom line is: differentiate to succeed.