Comments

Outstanding remark - always the customer is king/queen - Nordstrom excels here - CitiBank is in the dark ages! Mortgage companies are shell games for the most part.

Posted by John at February 24, 2005 12:50 PM

It's interesting. Studies show that teams and /or organizations that are goal (top line) focused are more successful, longer-lasting, and have higher morale than those that focus on reducing things, such as costs. It's the old "numerator companies vs. denominator companies" argument. Running a business by reducing the denominator is easy...it doesn't require any skill.

Posted by Bob at February 24, 2005 1:06 PM

Backwards thinking like that will totally stall growth - or worse. It's the top-line guys and gals that drive growth. Costs need to be "managed" and accountants are invaluable since we top-line thinkers will spend everything to provide better products and services.

Instead of asking how much can we save, you can also ask - how much revenue will be gained or lost based on this decision. Only then can you make a good decision about whether or not a certain project or cost will net a positive effect to the bottom line over the long term.

Posted by Adam at February 24, 2005 1:07 PM

many companies, particularly those run by CFO/CEOs
overfocus on the bottom line, and ignore topline. tools like offshoring or outsourcing work when they do because they are thoughtful compliments to business, and not strictly cost savings.

maybe they do so because the it 'feels' like familar, comfort zone territory, or maybe they lack the drive, desire and initiative to chart new and potentially difficult terrain. or maybe cynically they are doing everything possible to maintain the 20-30%/annum exec compensation package raises at the expense of the company essence by dissolving all the core competency and underappreciating powerful, connected teams.

overfocus on the bottomline without complementary topline work, produces little excitement, poor morale and lackluster customers and employees.

it sucks and it's rampant.

Posted by kurt at February 24, 2005 1:23 PM

Tom, Haven't you just outlined the difference between entrepreneurial and corporate mentalities? It seems all of the entrepreneurs I've ever met, whether they have a good idea or not, want their business to grow and grow and grow as they share their great idea with everyone who will listen/buy-in. Good ones keep their eye on the bottom line as well, but their key measure is gross revenue and their key focus is on engaging/exciting their customer base. At some point, however, it seems like in almost all cases someone throws the greed/wussiness switch and their focus changes from growing the business to making as much money as possible. When this happens the wuss comes out and they start focusing on cost control and cutting back and they go from entrepreneurial to corporate. A few remain truly innovative (Apple, Sony, 3M)and profitible, most end up eating their young.

Posted by Andrew Hayden at February 24, 2005 3:07 PM

"I just wish I could imbue more Lead Dogs with my TLO/Top Line Obsession!"

Funny, when I read this passage the first time, it made more sense as lead (the metal) than lead (move forward). Another example of where the "metal meets the road"?

Posted by Tom at February 24, 2005 3:16 PM

I guess the question that should be asked is, "Will this increase our equity or decrease it?"

Will your plans for "saving money" actually increase brand equity, customer equity, employee equity, value equity, et al . . . or will it decrease it?

Businesses have many more assets than cash in the bank or hard assets. Drive value, not necessarily costs.

Posted by Dustin at February 24, 2005 3:34 PM

I love it! Yes!

Create love (value) instead of "trying to prevent hate" (loss)! Do it! Do it!

And imagine which one gets faster results? We've been reacting to and living with fear so long we no longer even recognize it. We're not starving, people! We're doing ridiculously, fantastically well. We just need to raise the bar (to include room for love). The richest people in the history of the world, yo! Create it, expect it, demand it, pay for it!

Posted by Eben at February 24, 2005 7:18 PM

TOP LINE FOCUS = LEADERSHIP

bottom line focus = management

To effect Top-Line changes, we have to LEAD first, THEN manage, which seems to require a split personality!

Posted by Norm M at February 24, 2005 8:25 PM

One such move we made at my company was to implement a guarantee never seen in the software industry before. A One Year - no questions asked Guarantee that we would not only provide a solid software tool but it would help grow our clients' businesses by focusing on the growth indicators (average ticket, new clients per month, new client retention, repeat client retention, and frequency of visit). We even branded this guarantee - Guarantee 365™ and made it part of our corporate brand. Such a guarantee had a lot of risk but 5 years later our sales have skyrocketed and all of our processes and post-sales procedures are infinitely better than before (to keep our word to the client and keep those refunds from occuring). Here's the point - I doubt this one year guarantee would have ever gotten past the first line of management in a large corporation. The risk was high but it caused my sales, support, and development team to raise the bar and re-think everything we do. I wrote about this topic (and referenced your Re-Imagine book) in the March 7th issue of BusinessWeek. Take risks and do SOMETHING "crazy" to distringuish yourself from the competition!!

John Harms

Posted by John Harms at February 24, 2005 10:59 PM

I have started saying

'customer care is old hat'
'delighting your customer is old hat'

... We should now be saying ...

'how can I make my customer feel like the most important person in the world at this moment'

Greetings from over the pond

Trevor

Posted by Trevor Gay at February 25, 2005 11:09 AM

I agree with you Tom. But as you have stated elsewhere, visionary leadership and a desire to re-imagine are more important than either "line". As Andrew stated, therein lies the difference between the entrepreneur and the corporate (or I would say bureaucratic) mentalities. And although I have no personal experience in this, I feel that someone dedicated to the cause can make a difference and that the "profits" will take care of themselves. Just another crazy thought...

Posted by Steve Robert at February 25, 2005 11:34 AM

To this point, I found the following in an article in today's Wall Street Journal regarding Coca-Cola's desire to refocus on top line growth:

"Mr. Isdell also noted that volume growth has been added back as one measure for annual incentive awards for top managers after it was dropped in late 2003 under prior management."

When I was there 10 years ago, volume was everything. Somewhere along the line the focus shifted to stock price, the emphasis changed and the greatest brand in the world slipped. I hope it recovers.

Posted by Andrew Hayden at February 25, 2005 11:45 AM

You're right. But so are they, and here is why: They ARE focusing on the customer. They are looking for customer retention. They are looking to enhance the standing of the customer to deliver value to them that, ultimately, let's the customer win. "Wait, I don't get it Peter . . ." Well, that's just it, neither do they. The missing piece is who the customer is. "They", modern business leadership, are customer focused - but they can't commit professional suicide over it, and most executives are really high-paid managers (so they don't have the guts to really take the stand). THEY ARE the customers. The customers become the "Boss", the executive VP, the CEO, etc., especially in a time of overpriced executive compensation without long-term results. It's like that story of the Exxon employee, who at the company dinner responded to the CEO's proclamation that the customer comes first by saying "no the customer does not come first" and then pointing to the seven division presidents saying "he comes first, he comes second" etc . . . then adding "the customer, he comes eighth."

Posted by Peter at February 25, 2005 5:23 PM

Andrew, one can usefully argue over priorities, but I was appalled to see that "volume" had totally fallen off the radar screen at Coke. Explains a lot.

Posted by tom peters at February 26, 2005 3:37 PM

As you aptly point out in your post, a growing top line covers a multitude of sins. The problem occurs when (due to business cycles, or saturation of the "current" market) the top line stops growing and those problems manifest themselves.

Larger ("corporate", to use a prior comment's language) companies are more likely to have trouble growing their top line (certainly percentage-wise). Smaller (more entrepreneurial) companies have nothing but blue sky ahead (as far as market opportunity).

In either case, the only answer to the eventual stall in the growth of gross revenues is to innovate. So it all comes back eventually to a company's ability to innovate (another Tom Peter's theme, I believe).

Of course, it's a good idea not to be papering over too many sins, regardless of top line growth.

(And as my old boss used to say regarding success, "If it were easy, everyone would be doing it.")

Posted by Mike Duffy at February 27, 2005 3:23 PM