Volume 3, Number 6 - June 9, 2005

Progressive Insurance introduced innovation to an inveterate industry by leveraging its strengths and by listening to the customer. One innovative service was to provide competitive quotes along with its own. How could Progressive do it? Insurance rates are public information. Why would the company do it? Because it believes its rating process is superior to that of its competition. Let the competition have low or no margin business. In fact, Progressive will send it to them.

A second Progressive innovation is concierge service. If you have, or are involved in an accident with someone who has Progressive car insurance, you can take the vehicle to a Progressive service center, where you will pick up your rental car. Progressive will obtain estimates, arrange for repairs, and inspect the work when complete. When all is done, you return to the center to review the repair with Progressive, and then exchange the rental for your repaired car. Why does Progressive offer this service? Because the customer wants the nightmare of an accident to just go away. They don’t want all the work of fixing it dumped on them too.

As Progressive (cleverly descriptive name, don’t you think?) entered markets others didn’t want, and introduced services old line companies thought ridiculous, it has enjoyed double-digit growth and enviable profits.

What does any of that have to do with your company?

Let’s hope it has something. Take a few minutes to describe:
• how the skills of your employees are strategically leveraged to grow your company,
• how your product and service innovations are changing the industry, or
• how your business processes provide strategic advantage.

If you can’t, perhaps it’s time to figure out how to change that. If the customer doesn’t see your company doing great things, why shouldn’t he move on? So what is new with you?

As we cry about all our manufacturing jobs going to China, that country has lost more manufacturing jobs in the last several years than has the United States. Why? Productivity gains in China far outpace the creation of manufacturing jobs. India and other countries gain service jobs as American companies outsource business processes. We want to believe in capitalism, in free trade, but we don’t want to experience economic Darwinism.
Ah, but the other guy cheats. He unfairly pegs his currency and he pollutes the air and he dumps product and…..

“It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is the most adaptable to change.” 

Then be adaptable to change. Don’t ignore public policy issues, but don’t expect them to save your business.

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