Deepening Advantage

They develop a special empathy for customers and anticipate problems before they occur.

The same issues that arise in improving work processes also arise in the improvement of products, except that observing buyers is more difficult that examining one's own systems.  Companies that excel at product development and improvement carefully study the attitudes, decisions, and feelings of buyers.  They develop a special empathy for customers and anticipate problems before they occur.

The second reason firms may fail to engage in a process of improvement occurs when isolating mechanisms surrounding important methods are weak.  Companies in such situations sensibly hope to catch a free ride on the improvements of others.  To benefit from investments in improvement, the improvements must either be protected or embedded in a business that is sufficiently special that its methods are of little use to rivals. 

ACTION POINT:  Study the attitudes, decisions, and feelings of your buyers.