Dave,

Thanks for your interest in the article, and for taking the time to inquire.  The article is not incomplete in a sense that I have forgotten anything that I wish to have included, but I understand your confusion and have written a simple example below that described more explicitly, what my article aims to convey.  My apologies for not being more clear.  Specific examples of each case are limitless, as all businesses fall under these scenarios.

Firm A is dedicated to continuous improvement.  It dedicates time and resource to reducing wastes such as motion, defects, waiting, etc. that reside within its processes.  After some time, the firm finds itself more capable of executing many of its current processes.  They feel that significant improvements have been made.

Firm B and Firm C are also dedicated to continuously improving their operations.  Based on what they have learned through their marketing efforts, Firm B has decided to pursue a Cost Advantage strategy, while Firm C has chosen to be a Benefit Advantage provider. 

Firm B focuses their improvement initiatives on configuring their set of processes to allow for a uniquely low cost structure on top of the pre-canned cost reduction tools.  By doing this, Firm B advances its strategic position as a Cost Advantage Provider.  Firm B is able to offer industry leading prices because their improvement efforts have been guided by their strategic intent.

Firm C focuses its efforts on improving their benefit provision, keeping in mind that each benefit must truly be valued by customers and should generate its own ROI.  Common cost reduction tools and best practices may be applied as well, however they are not the element that will give rise to the Benefit Advantage that Firm C seeks.  By focusing improvement effort and resources on enabling the capabilities needed to offer the most valued benefits to profitable market segments, Firm C advances its strategic position as a Benefit Provider.  Firm C is able to offer the most relevant and profitable benefits to the marketplace because its improvement efforts have been guided by their strategic intent.

Firm A had genuine intentions and dedicated effort and resource, but is left behind, as their improvement efforts neglected to support a strategic intent, leaving Firm A in neither a Cost Advantage or Benefit Advantage position.  Firm A succeeded in improving their capability to execute their existing processes (better at doing the things they were already doing), but failed to ensure that they were doing the right things to begin with (right processes/building blocks, and capabilities to support strategy).  Without any strategic advantage, Firm A experiences lower profitability and questionable sustainability.

I hope this addresses your concerns.  Thanks again.

Angelo Lyall

Angelo Lyall Kaizen Solutions Inc. Corporate Coach & Partner angelo@kaizenimprovement.ca www.kaizenimprovement.ca