Is Your Organization Vanilla?

How would you feel if someone said your company was “vanilla”? So often we equate vanilla with boring or bad but isn’t vanilla the most successful and longest lasting flavor ever? Paul Leinwand and Cesare Mainardi recently discussed just this issue in the Harvard Business Review. Leinwand and Mainardi stress the importance of focusing intensely on what you or your company does best. They call it the coherence premium. In general the coherence premium tells you to stick with your companies “vanilla” or what you do best.

Jim Collins reiterates this principle when he discusses the hedgehog concept in his book Good to Great.  He states that organizations are more fruitful when they do one thing better than anyone else instead of doing many things well. Ultimately it may take time to identify what will be an organization’s hedgehog concept, but those who do are often rewarded with success.

Companies today are so focused on innovation and creativity that too often they lose focus on what they have done that was successful. Leinwand and Mainardi suggest that companies should create their strategy from the foundation of “what they do best” within the marketplace. They further illustrate that coherence in capabilities correlate strongly with greater profitability (as measured by EBIT margin). When you think of innovative companies you may think of Apple. But when you look with a “vanilla” eye you can clearly see that they have built off of their strengths (i.e., technology). Working off your organizations “vanilla” doesn’t mean being boring! So start with vanilla, and build from vanilla.

Written by Dana M. Borchert, PhD