There Are Only 3 Types Of Companies In The World. Which One Are You?

What kind of company do you run, and why does it matter?

These are two simple questions, but quite possibly the two most important ones business leaders face today. The answers, however, are anything but simple. To respond, you must fully understand what—at its core—your company does, what your value proposition is to your most important customers, how you are positioned vis-à-vis your competition, and how to tell your story in a compelling way.

If you find that determining who you are and why you matter is tough, rest assured that you’re not alone. Most executives have trouble answering these questions clearly, much less concisely. The key to answering these questions is positioning, which is an articulation of your overall business strategy as it relates to the customer in a way that reflects your company culture. Positioning lies at the center of every decision you make, from your go-to-market strategy, to the skill set you seek in your hires, to the way you invest precious resources. It is the foundation for all external messages and campaigns, from branding, to sales strategy, to web copy, to brochure design.

I advocate for DNA-based positioning, which defines a company as a customer-centric Mother, a product-focused Mechanic, or a concept-oriented Missionary. That’s it: only three types of companies in the world, each with its own distinctive DNA. Companies are what they are because of their DNA, and every organization expresses the DNA of one of these types. It is knowing exactly who you are as a company—understanding your corporate DNA—that can really help you win.

“Positioning lies at the center of every decision you make, from your go-to-market strategy, to the skill set you seek in your hires, to the way you invest precious resources.”

Mothers
As the name suggests, customer-oriented companies win on the basis of connection in terms of both whom they serve and the experience they create. Customer companies measure success by retention, satisfaction, and loyalty, and everything they do—from the way they target a particular market to the way they train and compensate their employees—is motivated by customer needs and those companies’ relationships with their customers.

Focusing on customer needs is what all Mothers do. Hallmark, for example, is dedicated to meeting customer needs with cards and gifts for every imaginable occasion, including by embracing what it calls the “new normal” with messages acknowledging stay-at-home dads, same-sex couples, divorced parents, and former in-laws. Or companies such as Zappos, which invests between four and seven weeks in training its customer service representatives and at the end of the training period offers employees a month’s salary to quit if they don’t feel that the company’s customer-first culture is a good fit for them.

Nordstrom is another company famous for its service, widely noted for cheerfully accepting all returned merchandise, no questions asked, even items that obviously have been used. Lyft, the on-demand ride-sharing service once known for its now-retired pink grille-stache, is a Mother as well, having worked hard to establish and nurture a customer-friendly reputation to differentiate itself from the infamously cutthroat, scandal-ridden, and PR-insensitive Uber.

No matter the product—which can encompass anything from luxury cars to burgers, from niche magazines to toothpaste—Mothers win by fostering deep relationships with their customers. They then measure their success accordingly.

Mechanics
Product-oriented companies have a different mission. Mechanics are companies that are determined to build the best products and services and bring them to the masses before anyone else does, with success measured in terms of market dominance. Where Mothers are motivated by their relationships with customers and what they can offer them, Mechanics more often are propelled by technology and what it can do. Whereas Mothers pour a great deal of time and money into researching exactly what it is their customers need and want, Mechanics are so confident of the product’s superiority that they are convinced customers will want it. Think: Apple or Intel Inside. They are the experts, after all, and when it comes to the quality of their product or service, they figure they are in the best position to determine what will win in the market.

Although many Mechanics are technology-based, product-oriented companies are found across all industries. Walmart, for example, is a Mechanic, as is McDonald’s; their primary focus lies in selling as much as possible to as many as possible, thereby achieving market supremacy. Whether the consumer enjoys the experience, though not insignificant, is often of less concern than it is to a customer-focused company such as Nordstrom. When it comes to a Mechanic (tech-oriented or not), the metrics are all about product performance, market share, category primacy, and benchmark leadership. Whereas a Mother (Marriott, for example) might spend any extra cash on a customer-service training refresher, a Mechanic such as Cisco, BlackBerry, or Trader Joe’s would be inclined to allocate that money to product development or sales.

Missionaries
Missionaries are concept-oriented; they are the companies dedicated to changing the world and delivering groundbreaking, life-altering innovation, the kind Apple delivered over and over during the Steve Jobs years. Motivated by a creative vision and bold ideas, they measure success by changed behavior and market disruption. Unlike Mechanics, which often focus on new features that deliver incremental change, Missionaries are innovation-driven, focused on producing change on a large scale. One great leap as opposed to dozens of small steps. At their core, they exist to change human behavior on a massive scale.

Think FedEx, a newcomer so frustrated by its inability to compete head-to-head with the air cargo industry that it stepped outside the box and shifted gears, ultimately turning the industry on its head (remember the original Federal Express tagline: “When it absolutely, positively has to be there overnight”). Think Starbucks, the “Third Place” between work and home that disrupted the world of coffee. Think Salesforce—“No Software”—which launched customer relationship management (CRM) into the cloud.

And, of course, think Apple. The sheer number of behavior-changing concepts that have come out of Apple headquarters and its fervently held “failure is fine” philosophy plant it squarely in the Missionary field. As early as 1980, Steve Jobs professed, “It’s okay to fall on your face just as long as you pick yourself up pretty fast.”

Success today is as dependent on who a company is as much as on what it does. Knowing your DNA and working with it—rather than against it—paves the path to success. Knowing what you’re made of helps you make something of it.