National Clothesline

perational innovation is the invention and deployment of new, more efficient ways of doing the same work you’ve been doing. Operational innovation will enable you to out-operate your competitors by offering lower prices and better service than other drycleaners. This is the simplest way to take customers away from your rivals.

Operational innovation should not be confused with operational improvement or operational excellence. Those are nothing more than the high performance of existing modes of operation: ensuring that work is done as it ought to be to reduce errors, costs, and delays, but without fundamentally changing how the work gets accomplished.

Operational innovation means coming up with entirely new ways of receiving, marking, processing and delivering the same clothes you are handling today.

Operational innovation is responsible for some of the biggest success stories in recent business history, including Wal-Mart, Toyota and Dell. Wal-Mart is now the largest business in the world. Between 1972 and 1992, Wal-Mart went from $44 million in sales to $44 billion, sailing past Sears and Kmart with faster growth, higher profits, and lower prices.

How did they do it? Wal-Mart pioneered many innovations in how it purchased and distributed the products it sells. One of the best known of these innovations is cross-docking, in which goods trucked to a distribution center from suppliers are immediately transferred to trucks bound for stores – without ever being placed into storage.

Cross-docking and other innovations led to lower inventory and lower operating costs, which Wal-Mart passed on to the consumer. Although operational innovation wasn’t the only ingredient in Wal-Mart’s success, it was a crucial building block.

Similarly, Dell instituted the operational innovation of custom building all the computers it sells, thus eliminating an inventory of computers, which, as you know, can become outdated in the blink of an eye. Toyota’s production system is so efficient and effective that other companies, including GM and Ford, have toured their plants to study their methods. Their operational innovations have unseated mighty corporations like Sears, General Motors and IBM.

These stories are well known for two reasons. First, because operational innovations fuel extraordinary results, and second, because they don’t happen often. Business owners who understand how operational innovation happens, and who understand the barriers that prevent it from happening more often, can add to their arsenal one of the world’s most powerful competitive weapons.

Compared with most of the other ways that drycleaners try to stimulate growth — technology investments, acquisitions, ill-conceived marketing campaigns, etc. — operational innovation is relatively reliable and low cost.

So why don’t more drycleaners use this method, especially, since operational innovation is needed now more than ever? Most drycleaners today are struggling with low growth in stagnant markets. Overcapacity is rampant and competition is fierce.

In this environment, one sure way to grow is to take market share from competitors by operating at lower costs that can be translated into lower prices and by providing extraordinary levels of quality and service.

Progressive drycleaners realize that the key to profitable growth is customer retention because acquiring new customers is very expensive. And the key to customer retention is making sure customers have rewarding interactions with your company. Making interactions with your company a more pleasant experience for customers will directly affect your bottom line. Still, many cleaners consider this a low-priority that doesn’t deserve attention.

Inventing a new way of operating that achieves the goals you have set for your business doesn’t need to be a matter of simply crossing your fingers and hoping for inspiration. Attending seminars, like our recent “One-Price Low-Price Cleaning Conference,” will provide you with the latest methods for attracting and holding today’s new breed of customers.

Only the sharpest operators will take action here, because, frankly, not everyone is willing or even capable of making the drastic changes to their businesses that will be required to become the undisputed leader in their markets.

Dennis McCrory is president of The Golomb Group Inc., a firm that designs marketing programs for drycleaners. Contact him at The Golomb Group Inc., 7664 Plaza Ct., Willowbrook, IL 60527. E-mail: dennismccrory@golombgroup.com