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As
operationally excellent companies create an unmatched
value proposition of best total cost, the question comes
up: What’s in it for them? There is only one answer:
Growth.
Other
market leaders might raise prices to exploit product
advantage, but such a tactic runs counter to the
operational excellence strategy. What so distinguishes
product leadership firms from most companies today is
that product leaders don’t slavishly follow the voice of
the customer. The customer can’t define it, either.
Although
a global leader like
Western Union stays close to the market, it listens to the astute comments
of customers only to hone its own judgment of the
future. Customers can help it get the details right. At
Western Union, the definition of service is the first step in its
development. The target may be far off, even far out,
but the company knows where to redirect its creative
energies. That’s what I mean by thinking right to
left—starting with a visionary concept crafted by
leadership thinkers and then instructing people to fire
the arrows of their imagination straight to the target,
not just anywhere into the future.
In a
one-on-one interview with this columnist, The Western
Union Co. president and chief executive Christina Gold
says, “We see tremendous growth and opportunity in our
business. [And I think] being a separate independent
company, we really love to focus on our priorities,
business and our strategy, and also on our customers.
We’re really looking at how do we add more for our
customers, more services and do more for them. [That’s
where we] focus more for the future.”
Gold is
responsible for the financial and overall operational
performance of the $4-billion company, a worldwide
leader in money transfer, bill payment and prepaid
services. Based at
Western Union’s global headquarters in
Eaglewood, Colorado, Gold has executive management
oversight of a network of over 312,000 agent locations
in more than 200 countries and territories. In addition,
she oversees an employee base of approximately 5,900
people located in 44 countries.
Customer-intimate companies personalize basic service
and even customize products to meet unique customer
needs.
Western Union, for instance, continually surprises its customers with
tailored solutions that competitors can’t
match—exceptional early delivery of money-transfer
services, providing people with fast, reliable and
convenient ways to send money around the world, pay
bills and purchase money orders through its vast
network.
Its
customers marvel: “How can such a large company craft a
solution that meets my unusual needs?” For a
customer-intimate company, it’s all in a day’s work.
“We have
very strong brand recognition all over the world. If you
look back in the last few years, we’ve gone from a
10-percent market share to 17.4 percent—and that’s only
in three years (from 2003 to 2006). We clearly wanted
the biggest asset [we can have] and we now have 312,000
locations around the world. We anticipate finishing the
year at 325,000. So the big part of our brand is just
the convenience of having locations so close to all the
customers, that’s been a big part of the strategy,” Gold
explains.
But
becoming and staying customer-intimate requires more
than building client knowledge and having expertise in
reengineering client business process. Western Union
believed that to be effective one must offer more than
just service. The company maintained a very broad
product lines that was configurable to the specific
needs of a client.
As
Western Union celebrated its first anniversary as an
independent, publicly held company and 155 years of
operational existence, new long-term agreements signal
Western Union’s strength in the world’s fourth-largest
remittance-receiving market. The three
companies—Universal Storefront Services Corp.,
e-business Services Inc. and PETNET Inc.—together
represent nearly 4,800
Western
Union agent locations in the Philippines. The company
has increased its existing footprint with the addition
of three new agents: Direct Agent 5 Inc., JP Tambunting
pawnshops and Davao-based retail chain EMCOR Inc.
“The
Philippines is a very important market for Western
Union,” adds Ian Marsh, executive vice president for
Asia-Pacific. “Outside of the US, it is second only to
Mexico for inbound remittances and has tremendous growth
potential as both a key receive and intracountry
market.”
The
Bangko Sentral ng Pilipinas (BSP) estimates that
remittances from overseas will exceed $14 billion this
year. There are currently over eight million Filipino
workers overseas.
“Another
piece that is important for all of us [though we are in
business] is that we take pride in our commitment to
helping families stay connected, and we strongly believe
in making migration an option, not a necessity. With
‘Our World, Our Family,’ we will help open doors to new
opportunities supporting global citizens on their
journey to a better life,” Gold stresses. The ‘Our
World, Our Family’ initiative is led jointly by the
Western Union Foundation and The Western Union
Co. The company’s $50 million to empower migrant families
through education and global economic opportunity
programs over the next five years is a commitment to
continue
Western Union’s
historical giving program. The funding is expected to
consist of direct contribution and investment to support
‘Our World, Our Family’ together with the contributions
to the Western Union foundation and other
company-supported initiatives.
“When we
took a deep look at the market-leading companies, we
invariably saw a wide variety of value propositions. We
also saw the specific ways the companies structured
their operations on their proposition—what we call
operating models. Strikingly, the operating models were
clustered not by industry, but by which value
proposition—best product, best total cost, or best total
solution—the company was pursuing.”
In a
competitive marketplace, improving customer value is the
market leader’s imperative. “We are constantly looking
[at what else can we do] to delight our customers and
really build our brand,” Gold says. According to her,
plans are afoot in the mobile phone transfers “to see
how mobile technology will play.” Adding that, “we’re
looking at the possibility of developing small loans for
consumers. And on the bill payment side, we continue to
expand that in other parts of the world. We’re also
constantly looking in terms of acquisitions—what other
businesses [which are adjacent to us] we would like to
get into.” Gold thinks that over the next 12 to 18
months, the company could become more aggressive on the
acquisition front.
No
matter what their formula for delivering features that
affect performance and experience, Western Union’s
business wasn’t just driven by procedure, but by the
extraordinary talents of key individuals who developed
and marketed breakthrough after breakthrough. Every step
along the way is focus on realizing the vision. They do
everything possible to squeeze as much uncertainty as
possible out of their ambitious undertakings.
At the
end of the day, however, it comes down to the vision,
insight and judgment of a few people at the top of the
organization to set or reset the company’s directions.
“Just
think, in only the last five years we have nearly
tripled our number of agent locations. We’ve increased
market share and begun life as a public company. Our
cash flow has never been stronger. We are constantly
expanding and diversifying our global distribution. And
we’ve proven our agent relationships and introduced new
service offerings. The investments we’re making on a
daily basis are benefiting people throughout the world.
They are the foundation from which we will continue to
help our consumers realize their dreams,” Gold
concludes. |
