BREAKING COMPROMISES, BREAKAWAY GROWTH

Many companies today are searching for growth. But how and where shoul d they look? Breaking compromises can be a powerful organizing princip le. Even in the most mature businesses, compromise breakers have emerg ed from the pack to achieve breakaway growth - far outpacing the rest of their industry, Examples include Chrysler Corporation, Contadina, C arMax, and the Charles Schwab Corporation. Compromises are concessions customers are forced to make. Unlike trade-offs, which are the legiti mate choices customers make between different product or service offer ings, compromises are imposed. For instance, in choosing a hotel, a cu stomer can trade off luxury for economy. But the entire hotel industry makes customers compromise by not permitting early check-in. Trade-of fs are very visible, bm most compromises are hidden. Compromises mean it's the industry's way or no way. Often, customers assume the industr y must be right; they accept compromises as the way the business works . That is why traditional market research rarely uncovers compromise-b reaking opportunities. The authors propose a number of alternative app roaches to finding the compromises hidden in any business. One approac h is to look for the compensatory behaviors customers engage in becaus e using the product or service as intended would not fully meet their needs, Other approaches include paying attention to performance anomal ies and looking for diseconomies in the industry's value chain. If man agers think like customers, the authors say, they will be able to find and exploit compromises for faster growth and improved profitability.