Is Your Company Up To Speed?

1. Do you have an emotional bond with your customers?

Competing strictly on price, quality, and features is the road that most companies travel. But in a world of overcapacity and sensory overload, there will always be some company that can do things a little cheaper or better than you can.

Companies that prosper over the long term don't just offer good deals. They exude genuine affection for their customers. How else to explain the enthusiasm that Internet shoppers display for Amazon and its palpable devotion to customers? Folks who buy bikes from Harley-Davidson are so nuts about them that Harley has created a program to reassure potential customers that they can buy a Harley without being a fanatic.

2. Does your strategy stand out from the crowd?

You can't do great things for your shareholders if you're satisfied with doing things "a little better" than your rivals. If you want to win big, you have to think different. That's the strategic lesson of the dominance of Dell in the computer business, of Southwest Airlines' 30-year flight to growth and profitability in an industry oozing red ink, and of the fast rise of Washington Mutual in an industry in which most big players are slashing costs, cutting branches, and downsizing customer expectations.

Behind the success of each of these companies are strategic ideas that challenged the status quo in their industry. That's why so many companies that are leaders today were once dismissed as mavericks, wild cards, insurgents. Their strategies seemed unfamiliar and even strange to the incumbent powers -- many of whom now look longingly at what the mavericks have built. Today, the acid test of strategy is originality.

3. Are you a fun place to work -- and a fun organization to do business with?

The most productive companies tend to be the most playful companies. Think of Southwest Airlines and the experience of flying on one of its planes. There's a reason that the experience often feels so entertaining: Southwest evaluates job candidates in part on their sense of humor.

You don't have to be downbeat to be disciplined. People are hungry for a workplace that doesn't always feel like work -- where they're invited to express their personality, to bring their personal interests to the office, to laugh as well as buckle down.

Likewise, the most successful products tend to be the ones that bring a smile to the face of customers: Who's not happy after eating a Krispy Kreme doughnut, purchased in a colorful shop with a see-through window into the doughnut-making equipment?

Commerce Bank, with its brightly clad employees, its smartly designed branches, and its colorful change-counting machines, manages to make banking (yes, banking) a fun and even memorable experience.

4. Are you built to change?

The only certainty in business today is that some crucial elements of your strategy -- the competitive landscape, your customer's expectations, the underlying economics of your industry -- will be different tomorrow. The half-life of a great idea, a new product, or a popular marketing campaign has never been shorter. That's why change itself has become a core capability in organizations that prosper over the long term. The best companies may look to the past as a source of inspiration, but they don't allow it to become an excuse for imitation. They look to history for continuity but not for repetition.

IBM and Microsoft have done masterful jobs of reshaping strategy, product offerings, and R&D priorities in the face of dramatically new circumstances -- from the explosion of the Internet to the surging popularity of open-source software to the mission-critical rise of Web services and e-commerce. The two companies are usually rivals, and they come at many business opportunities with different promises and products. But both have made radical (and often difficult) changes without dismantling their organizations or falling into a death spiral. Change, while far-reaching, has become a normal part of doing business.