Analysis of growth alternatives

Norton Lilly

Analysis for growth alternative

Norton Lilly: "Do not push for more top-line growth through sales but push growth by providing high quality service at a fair price, winning business slowly and sustainably."

One method of generating customer loyalty is stressing a product or service's quality and reliability. Offering items at the lowest cost possible has an obvious advantage, in terms of generating quick sales. However, some businesses have succeeded, even if they do not offer the lowest-cost alternative, but simply because of their level of service. Good examples of this method of differentiation can be found in when looking at the strategies of such companies as FedEx or UPS. Similarly, Norton Lilly's cargo services are solicited by customers who wish to be assured that their product will arrive on time, with a minimum amount of drama. Although there is a limit to which customers will pay over the industry standard, offering bargain-basement prices and services of questionable quality will not generate return customers.

However, to ensure that the company is indeed providing a service of high quality, more careful monitoring of customer expectations was required. The attitude that 'well, if we are dong anything wrong, they will tell us,' did not give the company consistent and meaningful feedback regarding their ability to meet customer needs. The Balanced Scorecard approach to keeping metrics on customer satisfaction and by setting KPIs (key performance indicators) is one way to better ensure that the company is honoring its promises of offering a high-quality product. The Balanced Scorecard also requires "consistent discipline" when keeping track of such metrics (Burton & Gamble: 2011: 371). If quality is to become a cornerstone of the new company's positioning strategy, specific performance standards must be quantifiable and measurable.

Leadership development became an integral part of improving customer satisfaction, given that strong leadership is required to meet Balanced Scorecard goals and to instill a work ethic founded upon the principles of meeting target goals. Recruitment based upon managerial profiling, rather than upon subjective impressions created a more professional and effective fashion of targeting and promoting leaders. As well as setting performance standards and an ethic of continuous improvement for Norton Lilly, creating a nine-step 'due diligence' process further reduced the chances of channeling funding into unprofitable ventures and created a leaner and more agile business model. "The capital outlay policy would ensure that decisions to enter into any business venture would be fully vetted, based on facts, not opinions" ( & Gamble: 2011: 372).

Norton Lilly's strategy proved to be a fruitful one, and after many years of failing to show a profit at all, after launching the Balanced Scorecard accountability method in 2007, by 2011 it was once again an industry powerhouse. Norton Lilly undertook reform from the ground up, which was one reason reforms were so effective. Reform attempts often fail if there is a focus on the short-term, such as creating a dramatic spike in sales by slashing prices. Solutions that do not fundamentally reform the systemic problems that generate the failing fortunes of the company in the first place will not produce sustained growth. The modifications to Norton Lilly's monitoring, promotions, and quality-monitoring process were foundational, even though they did not change the core mission and atmosphere of the company.