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A delta model is a method by which an organization engages in strategic management that is focused on the needs of the customer. It was created by Arnoldo Haxe of the Massachusetts Institute of Technology Sloan School of Management and Dean Wilde and his team at the strategy consulting firm Dean and Company. The primary goals of the model are outlined in five major principles, known as Haxioms, which state the essential philosophies and strategies.
The first principle and overarching philosophy of the delta model is that the whole strategy revolves around the customer. This concept is meant to be used on all levels of the company and in all areas of operations. The idea is that every effort should be geared towards the end result of pleasing the customer.
Another principle of the delta model promotes focusing on the customer instead of competitors. It dictates that resources should be used to build an enduring relationship with the customer instead of trying to keep up with or anticipate the actions of other organizations offering the same product or service. This focus, it is believed, will enhance company stability.
The third delta model principle focuses on the perception of strategy and how it should be used. Rather than trying to use strategy to win against competitors, the method promotes using strategy to build goodwill with customers. This reduces some of the negative connotations of doing business by making the process of building success appear less confrontational and aggressive.
Another principle encourages taking the focus off an organization’s perception of what the product should be and shifting attention to the needs of the customer. This means using existing resources and vendors to conform to those needs rather than building a model based solely on the organization’s insular vision. In essence, the idea is to focus on using existing networks and resources to find the best value for customers.
The final principle of the delta model encourages fine-tuning organizational understanding of the customer. This involves going deeper than large-scale statistical review of sales and customer behavior. A richer, more illuminating view of customer needs can be built by working to understand individual customer traits as well as overall trends.
These principles are put into practice with the execution of four basic elements. The first is to build a strategy for aligning the product with customer needs, which is typically based on a company mission statement. Then that strategy must be integrated in to the operations of the organization. Once the process has been set in motion, the elements must be adapted for maximum efficiency and economy. Then the entire process is evaluated.