When W. K. Kellogg started manufacturing cornflake cereal in 1906, his goal was to provide customers with a high-quality, nutritious product that was enjoyable to eat. That emphasis on quality is still important today. Every Kellogg employee is responsible for maintaining the high quality of its products.

Many organizations use quality practices to build competitive advantage and attract and hold a loyal customer base. If implemented properly, quality can be a way for an organization to create a sustainable competitive advantage.21 And if a business is able to continuously improve the quality and reliability of its products, it may have a competitive advantage that can’t be taken away.22 Incremental improvement is something that becomes an integrated part of an organization’s operations and can develop into a considerable advantage.

Managers in such diverse industries as health care, education, and financial services are discovering what manufacturers have long recognized—the benefits of benchmarking, which is the search for the best practices among competitors or noncompetitors that lead to their superior performance. The basic idea of benchmarking is that managers can improve quality by analyzing and then copying the methods of the leaders in various fields.

• What: First known benchmarking effort by an American company

• When: 1979

• Who: Xerox

• How: Japanese copier competitors had been traveling around, watching what others were doing and then using that knowledge to aggressively replicate their successes. Xerox’s managers couldn’t figure out how Japanese manufacturers could sell copiers in the United States for considerably less than Xerox’s production costs.

• Xerox’s head of manufacturing took a team to Japan to do a detailed study of its competitors’ costs and processes. SPOILER ALERT! The team found their Japanese rivals light years ahead of Xerox in efficiency.

• Xerox benchmarked those efficiencies and began its strategic turnaround in the copier market.

• And there you have it, the history behind benchmarking!

Today, many organizations use benchmarking practices. For instance, the American Medical Association developed more than 100 standard performance measures to improve medical care. Nissan benchmarked Walmart’s operations in purchasing, transportation, and logistics. And Southwest Airlines studied Indy 500 pit crews, who can change a race car’s tire in under 15 seconds, to see how their gate crews could make their gate turnaround times even faster.23

When Red Robin Gourmet Burgers launched its Tavern Double burger line, everything about the introduction needed to be absolutely on target. So what did company executives do? They utilized social media.24 Using an internal social network resembling Facebook, managers in the 500+ locations in the restaurant chain were taught everything from the recipes to tips on efficiently making the burgers. That same internal network has been a great feedback tool. Company chefs have used tips and suggestions from customer feedback and from store managers to tweak the recipe.

Successful social media strategies should (1) help people—inside and outside the organization—connect and (2) reduce costs or increase revenue possibilities or both. As managers look at how to strategically use social media, it’s important to have goals and a plan.

It’s not just for the social connections that organizations are employing social media strategies. Many are finding that social media tools can boost productivity.25 For example, many physicians are tapping into online postings and sharing technologies as part of their daily routines. Collaborating with colleagues and experts allows them to improve the speed and efficiency of patient care. At TrunkClub, an online men’s clothes shopping service that sends trunks with new clothing items to clients who’ve requested them, the CEO uses a software tool called Chatter to let the company’s personal shoppers know about hot new shipments of shoes or clothes. He says that when he “chats” that information out to the team, he immediately sees the personal shoppers putting the items into customers’ “trunks.”26 We’ll look more closely at how managers can use social media for environmental scanning in this chapter’s Managing Technology in Today’s Workplace box on p. 152. When used strategically, social media can be a powerful weapon, as can big data and other digital tools!

Big data can be an effective counterpart to the information exchange generated through social media. All the enormous amounts of data collected about customers, partners, employees, markets, and other quantifiables can be used to respond to the needs of these same stakeholders. With big data, managers can measure and know more about their businesses and “translate that knowledge into improved decision making and performance.”27 Case in point: When Walmart began looking at its enormous database, it noticed that when a hurricane was forecasted, not only did sales of flashlights and batteries increase, but so did sales of Pop-Tarts. Now, when a hurricane is threatening, stores stock Pop-Tarts with other emergency storm supplies at the front entrance. This helps them better serve customers and drive sales.28 By helping a business do what it’s in business to do, compete successfully, and attract and satisfy its customers in order to achieve its goals, big data is a critical strategic weapon.

How do managers make sense of vast amounts of data? They can use digital tools—technology, systems, or software that allow the user to collect, visualize, understand, or analyze data. Specific examples of digital tools include software such as Microsoft Excel, online services such as Google Analytic, or networks that connect computers and people, such as we discussed in the previous section on social media.

Increasingly, digital tools enable managers to make decisions on a variety of quantitative information (big data). It’s important to remember, though, that managers also make plans using their understanding of qualitative information, including internal (SWs) and external (OTs) factors. While digital tools are increasingly important, they should complement current planning approaches rather than replace them. Let’s briefly look at three of the more prevalent digital tools available today.

• DATA VISUALIZATION TOOLS. What do pie charts, bar charts, and trend lines have in common? They’re methods to organize and summarize data for visual display. For example, managers can use bar charts or trend lines to display profits for several products or businesses or industries across multiple years.

• CLOUD COMPUTING. Cloud computing refers to storing and accessing data on the Internet rather than on a computer’s hard drive or a company’s network. The cloud is just a metaphor for the Internet. Using cloud computing, managers can efficiently and effectively access vast amounts of data without having to invest in expensive hardware to do so.

• INTERNET OF THINGS. We introduced this concept in Chapter 2. The IoT allows everyday “things” to generate and store data about their own performance and share that information across the Internet.

As a strategic weapon, these various types of digital tools enable managers to make sense of all the data that are generated. But, these tools are just that...tools. They complement planning approaches rather than replace them. So, once managers have the organization’s strategies in place, it’s time to set goals and develop plans to pursue those strategies.