When Lady Gaga donned a meat dress, people said “That’s … errr … different.”
Differentiation is what drives both companies and products, which means differentiation is one of the most import things to occupy your attention immediately after corporate cash flow and the last donut in the break room. Being different is a communication of value, and value is what people pay for.
Yet, not all differentiation is equal and not all differentiation is sustainable (e.g. Madonna).
Product differentiation is the easier to understand, and oddly the less valuable of the two. When your product is different in a way that matches the needs or desires of a targeted audience, then sales are sped. But product differentiation is short lived, even if you have patents. The differentiation you invent today will be cloned by your competitors tomorrow.
Likewise, there are differing degrees of differentiation. Someone might look upon your product and say “Yes, but …”, understanding why it is different but not why the differentiation is important or desirable (“Yes, your baby is very ugly, but …”). Buyers might also utter “I see …”, indicating the value of the differentiation is worth considering, but not fundamentally compelling. Or they can react like the market did when the first iPhone was introduced by shouting “Oh, wow!”, a sign of direct value understanding.
Since product differentiation can be fleeting – as so many one-hit-wonder companies have proven – corporate differentiation becomes the more compelling story. Every great company created and institutionalized some form of differentiation, and books about categories of differentiation have proven popular. Apple has (or perhaps ‘had’) an internal discipline of elegant simplicity for consumer electronics. Hewlett Packard made its mark by creating insanely great and nearly indestructible hardware. Chrysler saved itself from the scrapheap of history by bringing quality back to American cars at a time when Detroit manufactured lemons.
This form of corporate-wide differentiation is what sustains a company and creates legends. Yet it rarely is organic. Mobs of people seldom define a corporate culture using group-think. Mission, differentiation and the corporate culture to perpetuate them typically comes from a leader, and most often from founders (HP fell fast after Bill and Dave died). It takes someone declaring that “this is the way we make our money” and then making everyone they hire believe the same thing.
The form of differentiation is almost secondary. A commodity business could differentiate itself by focusing on internal process optimizations, and by eking out a half penny per ton of raw materials, could be significantly more profitable than their competitors. In Silicon Valley, we love the art of invention – creating the next new thing. In other industries, careful attention to customer service and assuring their success is the differentiation that matters most.
It is important to be different. But you have to be different in meaningful ways, and you have to differentiate your company as well as your products. When corporate differentiation drives consistent product differentiation, then your company will live beyond your years.