New Rules: Why Values Beat Value

Ryan Mathews is one of those rare individuals who, if he didn't already exist, we would need to invent him.

Consider his "career" track: He got his undergraduate degree in Mongolian history and did his graduate work in philosophy. As a trained philosopher, Mathews next put his degree to work tending bar for two years at an inner-city bar in Detroit. During that same period, he was also working as a fine artist, developing his eye as a painter. Next, he migrated to writing, tackling "gonzo feature writing" for the Detroit Free Press. From there, it was a short jump to a stint as a medical writer. Then, in pursuit of a more stable salary, Mathews moved on to publishing, working as a production manager and art director for a small publishing company.

In the course of setting type for one of the magazines, Mathews discovered that he could write better than the reporters. So in addition to his design and production responsibilities, he assumed the job of copy editor and rewrite man -- without telling anyone. That led to Mathews's next self-reinvention: a series of publishing posts, always moving up in responsibility and performance, which led to a remarkable run as editor of Progressive Grocer magazine, one of the most highly regarded trade magazines in the United States.

Then, three years ago, Mathews adopted his most recent intellectual identity: futurist. Joining Watts Wacker's firm, FirstMatter LLC, Mathews arrived at a job that -- for the first time -- integrates all of the varied roles he's played for the past 30 years: historian, philosopher, listener, reporter, artist, experience-crafter, speaker, performer, consumer-products and retailing expert.

And now add to that résumé coauthor of a smart, insightful, entertaining, and useful book about companies, customers, and the art of competition. With Fred Crawford, Mathews has written The Myth of Excellence: Why Great Companies Never Try to Be the Best at Everything (Crown Business, July 2001). Not unlike Mathews himself, the book is a delightful, winning combination: part strategic-analysis model, part charming storytelling, part philosophical treatise. All together, it is a great read and a focused contribution for business leaders who want to analyze their own approach to customers -- and learn how to reconfigure their businesses into much more customer-centric operations.

Fast Company spoke with Ryan Mathews to get a quick fix on The Myth of Excellence. Here's what he had to say.

Your book starts with an essay that's a surprising social commentary -- one that puts business into a very different light from simply offering goods and services for people to buy. In a way, you're offering the context for your view of business. What's the background? What's changed?

It used to be that what customers wanted from businesses could be described as "feature and function advocacy." In other words, customers wanted things that worked well -- or at least reasonably well -- and they wanted things that worked as advertised. Businesses, for their part, made things that worked reasonably well, and they expected customers to give them money. It was a transactional world. You brought your goods or services to market; I paid you for those goods or services; I went away reasonably happy with what I'd purchased; you went away reasonably happy with my money.

Now, that world worked because of some things that are different from today's world. First, there were genuine efficacy differences -- that is, there was a time when Tide actually did clean clothes better than its competitors. There were Craftsman tools that came with a lifetime guarantee -- and that was a superior offer. The same kinds of difference held true for appliances, cars, clothing, and furniture.

Second, as people lived their lives -- not as consumers, but just as people -- they had lots of sources of institutional reinforcement. Authority figures were generally regarded as good guys. Schools worked. Leaders were leaders; people played by the rules. People's emotional, psychological, and social values were reinforced by all kinds of supporting institutions.

Fast forward a few years, and what happens? You've got the general dislocation created by rapid technological change. In mature industries, you've got the closing of the efficacy gap. Tide may still get your clothes cleaner than any other laundry powder, but you'd need an electron microscope to detect it -- and most people don't have an electron microscope in their laundry room. In general, tools don't break, so the Craftsman guarantee isn't as important. Cars, more or less, have the same degree of quality -- or lack of quality, depending on your point of view. And then there's the decline of leadership, a collective failure of the institutions that reinforced people's values.

So what's the punch line? What is the consequence?