The Disadvantages of a Standardization Business
When primary aspects of your business operations are designed to be consistent and repetitive, you're using a standardized business strategy. The goal is to reduce costs by delivering a standard product or service experience and to ensure a consistent experience for customers. Despite the benefits, standardization has drawbacks relative to customized approaches.
Because of the general intent of efficiency and cost savings with standardization, businesses that use this approach often are disadvantaged against businesses using more customized, high-quality processes. Customers looking for top quality or a superior service experience often prefer to pay whatever it takes to get the best product or service possible. This limits your ability to target these particular customers, but the bigger pool of value-oriented buyers you serve may help you overcome that.
When you base your business system on delivering a consistent product or service experience, you leave little room for error. Product defects or service gaffes that violate your commitments can damage your brand. Instead of maintaining a reputation as a value-oriented provider, you might be viewed as the maker of cheap or unreliable products in the wake of product failures. A few major problems or chronic minor disappointments are all it takes to damage your brand.
Standardization puts an emphasis on repetition and sameness. This means your employees are asked to perform consistent manufacturing, sales or service processes and tasks day after day. While some employees appreciate knowing their role each day, many people are motivated by the challenge of learning new things or doing different things each day. If employees become bored or lose interest in their work, their performance may stagnate or decline, which can hurt your business and increase turnover.
Another side effect of repetition and sameness is a lack of innovative thinking. Your company's culture can become mired in its focus on processes, and this can restrict the innovative thinking, ingenuity and creativity that help push companies forward. Your company may fall behind more dynamic, forward-looking competitors who emphasize these cultural traits over standardization.