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Case Study: Of David’s And Goliath’s

Case Study: Of David’s And Goliath’s

| On 05, Jun 2018

Darrell Mann

This is a true case study relayed to me at a recent workshop.

TRIZ/SI was not explicitly used during the definition or solution of the problem.

Rather, the case study is intended as an illustration of how Systematic Innovation would have tackled the situation. That said, I hope you will agree with me that the problem-solver responsible for the case is what we might think of as one of the world’s ‘natural TRIZ thinkers’.

The names of the companies involved has been changed to protect confidentiality issues.

The story begins with a large national retailer. The company in question – let’s call them ‘RetailQ’ – has a long-established reputation across the population for high quality and very high standards of customer service. The company is about to launch a new initiative to retail white goods, and, in keeping with their reputation, is looking to be able to offer a complete installation service. Cost projections suggest that the best option will be to out-source this delivery and installation work, and they have prepared and circulated a Request for Proposals.

Three organisations have responded to the RFP:

  • Goliath N – a formerly nationalized utility company with an existing nationwide team of plumbers, electricians and installers.
  • Goliath P – another large nationwide network of installers, this time based in a privately owned corporation that already offers a similar service to that being requested by RetailQ for other white-good retailers.
  • David C – a small, privately owned company comprised of two installers, based in the town close to the headquarters of RetailQ.

The RetailQ management team arranged a series of interviews with the management team of each of the three bidders. When they arrived at the David C premises, it seemed clear to the head of the company that the RetailQ team were slightly confused as to why they were visiting a tiny office in a local industrial park. During the brief meeting, they admitted as much. ‘How do you think you will be able to support our nationwide network of stores with two people? Based here?’ they asked, waving their hands around the too-compact room the four of them were squeezed into. The David C boss smiled. ‘Who else is bidding?’ he asked. The RetailQ told him about the two Goliaths. He smiled again, ‘so you got your three quotes?’ The RetailQ team’s turn to smile now, ‘we did,’ they nodded.

Then there was silence. Everyone looked around. The RetailQ team, almost as one, picked up their cups and made a collective show of drinking the last of the contents. The meeting, it seemed, was over.

The David C boss coughed. ‘Just before you go,’ he casually asked, ‘I was interested in your recruitment process.’

The RetailQ team looked at each other. Was he asking them for a job?

‘How many applicants do you get when you advertise for a job?’ the David C boss continued, ‘how many will you interview?’

The most junior of the RetailQ managers looked at his colleagues before answering, ‘we’ll usually get a couple of hundred. Typically, 5% will get an interview.’

‘And once you’ve chosen the right person. What happens then?’

‘We’ll train them. They’ll spend a couple of weeks before they see a customer. Then another month before they’re allowed to work in a store un-supervised.’

‘Wow, that’s tough. Expensive.’

‘It’s how we make sure we keep our reputation,’ the most senior of the RetailQ team interjected.

‘Hmm,’ the David C boss sat back in his chair, ‘so how do you think the Goliath installers are going to shape up going through that?’

The RetailQ team looked at each other. It wasn’t clear who was going to answer this time. The pause got longer. Finally it looked like the junior got the short-straw, ‘they’re already trained,’ he whispered.

The David C boss nodded, ‘as installers, sure. Goliath P are good. But their way isn’t the same as yours is it? They’re good, but not as good as you guys.’

‘What are you suggesting?’ the RetailQ senior again.

The David C boss shrugged his shoulders, ‘it just feels like, if you want the Goliath’s to represent themselves the RetailQ way, they’re going to have to do a lot of un-learning before they start to know how to do things your way.’

The RetailQ team collectively nodded.

‘I don’t have a team,’ the David C boss continued, ‘so there’s no un-learning.’

‘But if you don’t have any people, there’s no-one to learn either. What would you teach them?’

‘My idea is this,’ the David C boss scratched his chin, ‘you teach us how you teach your employees. You give us the teaching materials, you tell us what you look for when you’re recruiting, you make sure you’re happy with who we recruit, the way we teach others, and we build the team for you.’

The RetailQ team looked at each other again. ‘Wouldn’t that take a long time,’ the junior asked.

The David C boss shook his head, ‘it doesn’t have to. The only problem from our side would be the time we spend learning how you do what you do. If you gave us an upfront payment we could be up and running in – how long did you say your induction programme lasted?’

‘Six weeks.’

‘Six weeks it is. It’ll take you twice as long as that to negotiate a deal with either of the Goliaths. We’ll be up and running locally in two months. Rolling out nationally in three. With installers doing things your way, and us worrying about looking after them, so you don’t have to. It’ll be like out-sourcing without the pain of out-sourcing.’

The following morning, the David C boss received a call from the RetailQ team offering him the national contract. That was five years ago. Today, the RetailQ reputation continues. Their reputation as white-goods installers is second to none. They are already bigger than Goliath N, and look like they’ll pass Goliath P this year. David C now has a team of fifty RetailQ-DNA installers based around the country and receives regular enquiries from companies – including two from Goliath P – to see if they are for sale. They’re not.

The David C boss said he didn’t know about his plan until the RetailQ team were draining their coffee cups during the meeting. It just came to him.

From a Systematic Innovation perspective, looking at the problem from the RetailQ perspective, their desire to offer an affordable high-quality out-sourced white-goods installation service (Support Capability, Support Cost) gave them a clear contradiction: how to ensure that their reputation for service wasn’t compromised (Supply Risk, Belonging).

When mapped on to the upcoming 2016 version of the Business Contradiction Matrix, which now includes ‘Belonging’ as a specific parameter, we obtain the following ranked list of Inventive Principles:

1, 10, 24, 13, 22, 35, 25, 33, 3

The heart of the David C outsource (Principle 24) solution is, I think, the adoption of the RetailQ recruitment and training ‘DNA’. In effect, every David C installer is indistinguishable from any other RetailQ employee. Interacting elements have been ‘made of the same material’. Which makes for a lovely illustration of the (rarely seen) Principle 33, Homogeneity.