Outperforming by 'Outbehaving'

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It's about interacting and connecting with customers in an authentic way that they are delighted by the experience and are served in the process.

The emergence of how—or behavior as a source of competitive differentiation is evident in the humanization business is experiencing, as I explained in my last column (BusinessWeek.com, 9/5/08).

On the marketing front, a growing number of companies assert that they are about much more than their products or services—that "much more" translates to people. For example, Johnson & Johnson (JNJ) asserts that "Tylenol is different because of the people who make it." The product's site contains video testimonials of workers responsible for the product, who make promises about the care and commitment they pour into their production and quality-assurance processes. Johnson & Johnson seeks to differentiate Tylenol from competing companies not only on the quality of its product, but more so based on the quality of its employees' behaviors.

The entire "customer experience" movement reflects a similar desire, and it has been embraced by products and services companies alike. Business leaders have realized that customer service no longer suffices as a competitive differentiator, so they focus more time, energy, and investment in the human interaction their employees develop with customers.

Customer service is about how quickly an employee can connect with a customer. Customer experience is about the quality of that connection over time. Customer service is growing increasingly automated thanks to ATMs, interactive voice response (IVR) systems, and online self-service. Customer experience, which is designed to enhance the long-term loyalty of the most valuable customers, requires companies to outbehave their competitors.

A VARIABLE AND INFINITE SUPPLY

The notion of behavior as a powerful source of differentiation may prove difficult for many employees to grasp, and for good reason. Our initial introduction to the term may remind us of the scolding we received as children. We were admonished to "behave!" in response to our objectionable actions. From that age onward, most of us developed a perception of behaving as something we need to do only after acting badly.

Adopting behavior as a governing principle of human endeavor and business can also be difficult because our previous habits of thought and action—all the outs (outmuscle, outfox, outscheme, etc.) mentioned above—are deeply engrained.

These old habits of behavior allowed us to accumulate power over people through leverage. Our hyperconnectivity has greatly reduced the leverage we can exert over other people, however. In today's flat and hyperconnected world, power increasingly is derived through people—through relationships, authenticity, transparency, and openness.

We need new ways to help us develop behaviors that enable us to outbehave. Change is never easy, yet it is necessary and valuable. There is great variability in behavior (no two people think and act exactly alike) and, therefore, more opportunities for individuals and organizations to stand out based on their behavior.

Unlike previous sources of power and competitive differentiation, behavior is not finite. Behavior may be one of our greatest sources of renewable energy, as I will discuss in a future column. Although the term outbehave probably will not make it into the dictionary by next month, I believe it will become a crucial part of our language and business strategies for decades to come. Hopefully with it will come the understanding that to outperform you must outbehave and by outbehaving you achieve not just performance but principled performance, something at the center of any truly sustainable business.

Dov Seidman is the founder, chairman, and chief executive officer of LRN, a company that helps businesses develop ethical corporate cultures, and the author of HOW: Why HOW We Do Anything Means Everything…in Business (and in Life).