“Repeatability” is both the theme and the title of a new book by Chris Zook and James Allen, consultants with Bain & Company.
Great companies keep it simple and have 3 key virtues:
1) A highly-distinctive core business
2) Working hard to keep their business model simple
3) Relentlessly applying their business model to new opportunities
In essence, “Simplify and Repeat, Simplify and Repeat” (The Economist, April 28, 2012, Schumpeter).
Apply the same management philosophy to new businesses, to new markets, to new customers. Obsession with simplicity is a necessary counter to the natural tendency of businesses and systems toward complexity as growth occurs. Zook and Allen call complexity the “silent killer” of the modern world.
Stick to a few themes, return to them over and over again. Companies need to have “non-negotiable” business practices to ensure that their business model is repeated, such as McDonalds insisting all employees start in the kitchen or at the cash register. Real estate developer Trammell Crow used to insist that all its new executive hires, including newly-minted Ivy League MBAs, start out by leasing office or retail space. If you don’t know what will lease, if you don’t have a visceral understanding of what the customer will buy (and what the customer WON’T buy) you have no business developing real estate.
All successful companies have certain kernels of value; some secret sauce that differentiates them, allows them to create value. It is easy to drift away from your core, to lose sight of the essence of your success.
NOTE: Some direct quotes from Schumpeter’s article in the April 28, 2012, edition of The Economist.