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BOOK REVIEW / A valuable journey beyond the bottom line: Product plus: how product + service = competitive advantage - Christopher Lovelock: McGraw-Hill, pounds 22.95

Roger Trapp
Tuesday 03 May 1994 23:02 BST
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Just about every business school student is familiar with the case of People Express, the brave new venture that sought to soar to success on the back of the deregulation of the US airline industry only to fall to earth through over-expansion. Less well known is Southwest Airlines, which overcame legal action to start flying more than 20 years ago and - for the moment at least - is still up there.

What Christopher Lovelock calls 'a 500-pound cockroach too big to stamp out' started out with pretty much the same ideas as People Express did on the other side of the country. It would focus on employee involvement and make getting repeat customers the basis of its marketing effort. But it is sticking to a simple, coherent operational philosophy that he sees as 'perhaps the most striking aspect' of the company.

Consequently, while People's almost immediate deviation from its business plan placed an ultimately fatal load on its workforce, Southwest has maintained its original approach, albeit with modifications, and grown from being a local irritation to Texas's two established airlines to the country's seventh-largest - and most profitable - carrier.

As Tom Peters and Robert Waterman, the authors of In Search of Excellence, and countless other pundits know to their cost, organisations have an annoying habit of letting you down as soon as you have praised them in print. But Mr Lovelock is confident that his chosen few - which include that old favourite, Federal Express, as well as a mail-order nursery called White Flower Farm, Boston's Beth Israel Hospital and Britain's BT - are 'sustainable' success stories because their performance is not confined to the bottom line.

At a time when many of Britain's industrialists are grappling with non-financial performance measures and looking at what will be expected of companies in the decades ahead, this approach is likely to strike a chord.

As the author says, 'product plus' means more than 'just something extra for customers'. Rather, 'a product-plus organisation is one that in serving its customers well also offers better value to employees, suppliers and the owners of the business - and creates a positive impact on the broader community.' This type of management 'looks to competitive advantage, but it's concerned with sustainable strategies, not short-term gain'.

This is all very trendy, but not tremendously original. After all, service - while it is not always achieved - is acknowledged as a pre-eminent success factor in today's business climate. And even traditional manufacturing companies are increasingly taking on the characteristics of service organisations in the effort to offer value for money and so win orders against mounting competition. As Mr Lovelock admits, not even the term 'product plus' is his. He has borrowed it from an unknown source, probably advertising.

But this does not mean the book is without value. In fact, the opposite is the case. Managers are confronted with far too many books that claim to provide the single answer to all their problems.

As an academic who has taught at such august institutions as Harvard and Switzerland's IMD, the author is obviously at home with the various concepts being bandied about, as well as having a few of his own.

For instance, a central part of the book is a discussion of what he calls 'The Flower of Service'. Developed with French colleagues a few years ago, the idea is that while core products vary from one type of business to another, supplementary services, such as billing, order taking and the like, are common to many.

Pretty as this is, and convenient as an introduction to the novel mail-order business developed on a farm in New England, it is not spell-binding in its originality.

Mr Lovelock is far stronger when dealing with the how and why of real examples. And as a Brit, he is aware of the need to stick in the odd European case study - hence the inclusion of BT and the branchless bank Firstdirect.

Although the former telecoms monopoly has come a long way since its privatisation, many domestic users might still question its right to any commendations for service. But the author insists that the strides it has made in dealing with business customers form an experience that many other organisations can learn from. Since he quotes a customer as saying of the old-style BT that 'you are the most difficult people in the world to buy from', the lesson appears to be that even a poorly managed organisation can become a world beater with the right attitude.

If that morale-boosting idea was not encouraging enough, his book is unashamedly designed to appeal to the harassed executive. There is certainly nothing of the academic treatise about its style. Each chapter is divided into short sections interspersed with boxes containing insights and homilies and is prefaced with a cartoon.

But - for all the detail on how others have fared - perhaps the most valuable message comes in the book's final paragraph. Warning against the idea that becoming and remaining a product-plus organisation like Southwest Airlines can be achieved with the aid of a magic wand, he says: 'It will take time and hard work.'

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