Wednesday, October 29, 2014

MANAGEMENT SPECIAL..................... GENERATION FLUX'S SECRET WEAPON (1)

GENERATION FLUX'S SECRET WEAPON (1)

In a world of rapid change and great uncertainty, the greatest competitive advantage of all may be at your very core.


Chipotle CEO Steve Ells doesn't mince words.
"Our investors are here for only one reason: great returns. They want to make money." Chipotle's customers, Ells says, are equally focused: "They care about taste, value, and convenience." What about the company's ballyhooed mission of "Food With Integrity"? Ells laughs acerbically: "Is that ever going to be the reason people come into the store? 'Oh, I want to eat food with integrity right now!' I don't think so."
Yet mission is exactly what makes Chipotle so much more than just the taste of its barbacoa. "Food With Integrity" animates every decision the company makes, from the slaughterhouse to the food line at your local outlet to the strategic planning at the Denver headquarters. When Ells, who's a chef himself, launched Chipotle 21 years ago, he focused on fresh ingredients. That evolved over time into an awareness of all the different forms of exploitation inherent in traditional fast food--of animals, of the environment, and even of customers. Chipotle has distinguished itself from the Burger Kings and McDonald's of this world by relying on "naturally raised" meat that is antibiotic- and hormone-free, by dropping trans fats from its cooking before doing so was in vogue, and by offering organically certified beans and avocados. "It's the responsible thing to do," says Ells. Other chains reheat frozen items in a mechanized system. At Chipotle, Ells points out, "we're actually cooking. If you walk into the refrigerator, you'll see fresh onions and peppers and raw meat that isn't tenderized or treated in any way."
That mission drives Chipotle's sales and marketing tactics. Chipotle eschews dollar menus and other standard fast food gimmicks, offering a narrow range of meal options at relatively high prices. When Chipotle's ad agencies couldn't find a way to make "food with integrity" a compelling sales proposition, Ells dumped them and brought marketing in-house. Now the company is winning industry awards, and building valuable customer loyalty, through campaigns such as The Scarecrow. The online video and game about farmers and fresh food has become a best seller on the App Store, downloaded nearly 700,000 times. This distinctive approach has fueled Chipotle's growth. The company now has some 1,700 stores, up from 1,350 two years ago; revenue is $3.6 billion, up more than $1 billion over the same time; and Chipotle's market cap doubled to a whopping $21 billion.
When I ask Ells about another large company's mission statement--one that revolves around being the "best" in its industry--he cuts me off: "What kind of a mission is that?" he asks. "I don't want to shit all over his mission. It's his mission. He can have whatever he wants, but that kind of thing wouldn't work for us." At another point, I ask about his competition. If traditional fast-food chains change their practices in reaction to Chipotle's success, would he see that as a good thing overall, because it broadens the food-with-integrity culture? Or would he view it as a threat? "It's a joke," he replies. "You know those guys, right? They can't change. The culture is just too ingrained. Which bodes very well for Chipotle."

Steve Ells and Chipotle are hardly alone in embracing what Ells calls a "loftier" vision for the enterprise. "If you want me to make decisions that have a clear ROI," another renegade CEO declared at a public shareholder meeting earlier this year, "then you should get out of the stock, just to be plain and simple." A few months earlier, that same renegade had announced that his company was committed to "advancing humanity." He claimed that his frame for decision making was moral: "We do things because they're just and right." This emphasis on social goals over financial performance seems almost revolutionary--and yet the renegade is none other than Tim Cook of Apple, CEO of the most valuable company in the world.
Ells and Cook represent a rising breed of business leaders who are animated not just by money but by the pursuit of a larger societal purpose. Their motivation may be personal, emotional, and, yes, moral; and yet their idealism is rewarded in the marketplace. In a world that is evolving faster than ever, companies such as Apple and Chipotle--and Google and PepsiCo, and even fashion brands like Eileen Fisher--rely on mission to unlock product differentiation, talent acquisition and retention, and even investor loyalty. The more they focus on something beyond money, the more money they make.
Their success calls into question many entrenched assumptions about corporate success and the frameworks and priorities that shareholders and strategists have come to rely on. So much of the business world remains primarily obsessed with quarterly financial performance. But these short-term metrics can distract from an enterprise's long-term impact on the world, and that distraction can result in products and other offerings that undercut value creation. At a time when the pace of change is unrelenting, this may be the biggest weakness in today's economic system.
I've written several articles recently about something I call Generation Flux. This refers to the group of people best positioned to thrive in today's era of high-velocity change. Fluxers are defined not by their chronological age but by their willingness and ability to adapt. These are the people who are defining where business and culture are moving. And purpose is at the heart of their actions. Don't confuse this with social service. For these folks, a mission is the essential strategic tool that allows them to filter the modern barrage of stimuli, to motivate and engage those around them, and to find new and innovative ways to solve the world's problems. Their experiences show the critical advantages of building mission into your career and your business. Businesses that find and then live by their mission often discover that it becomes their greatest competitive advantage.

BY ROBERT SAFIAN

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