Two Stores on an Island: Management Matters

I live on a resort island.

There are several hardware stores on the island, and the one closest to our house is a franchise of a large national company that dominates the small hardware store business in the United States.  The company has another franchise a few miles farther away.

The store that is farther from our house does better than the closer one, and we find ourselves going to that more distant store.  The products are the same, the stores approximately the same size.  We seldom find inventory out of stock in either store.

Why then do we prefer a less convenient store?

Our shopping experience is “better” at the less convenient store.  The parking lot is in better shape, the aisles are wider, with fewer advertising impediments, the lighting is brighter, the staff more knowledgeable, more available and quicker to approach a seemingly clueless customer.  When we go to this store, there are fewer irritants, and we leave feeling valued.

There is a conveyor-belt sushi restaurant, part of a state-wide chain, having the exact same menu at two locations on our island:  one has attentive employees alert to arriving and special-order customers, as well as to replenishing dwindling offerings on the belt;  the other does not.  Business at the first thrives; at the second it does not.  Like the hardware store, the first restaurant is farther from our house, and we gladly go the extra distance.

Every national company has stores that do far better than they should when based on the demographics of their target markets.   Company executives try hard to replicate the stellar results chain-wide by using concepts like “best practices”.  Chain wide efforts to improve performance often don’t succeed.

Management makes a difference in all enterprises.  We know this both from personal experience and from the stories we read in Forbes or Business Week about large, almost-dead companies brought back to life and prosperity by passionate managers and leaders—Steve Jobs at Apple, Jack Welch at GE, Ed Gerstner at IBM, so many others.  Management makes a difference in companies prosaic (sandwich shops, hardware stores, conveyor belt sushi restaurants) and complex (Apple Computer, General Electric, IBM).

We, at HDEP International, have understood this from the start and have developed a management structure where correct processes lead to correct products.  Offshore outsourcing for complicated, high liability services like title production requires management that understands the importance of building processes, training people, working collaboratively and closely with customers, and incorporating customer feedback to constantly improve.

Some customers have tried offshore outsourcing and been disappointed.  The quality may not have met standards and required internal staff to rework products; conditions that should have been flagged were not; promised completion times routinely slipped; the offshore staff may not have understood the title insurance industry and the customer’s geography, competitive conditions and other constraints.

If you have tried offshore outsourcing and been disappointed, it may be worth contacting a company located on a resort island whose owners understand the importance of management, understand the importance of processes as integral to output, understand the title insurance industry, and understand that each customer is different and has different requirements. For more information please contact us.

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