How to avoid becoming your competitors

In a world of same, being different has a growing value. For many companies, differentiation isn’t about outspending competitors, it’s simply about delivering better service in a slightly different way. So, what common business behaviours should you consciously avoid?

Benchmarking obsession

A major earner for consultancy firms, benchmarking poses a significant risk to companies that forget to follow their own path and become overly concerned about what everyone around them is doing. Spending too much time on competitor’s risks diverting attention away from more pressing internal needs. Identifying best practice is all fair and well until it is blindly copied and imitated without question or contextual reasoning. Benchmarking has a role in monitoring operational effectiveness but is no replacement for a valid, robust strategy.

Recruiting from the same pool of experts

Whether it’s telecoms, aviation or logistics, some industries are heavily skewed towards recruiting from the same pool of prospective employees. Many industry experts will already have worked at 2 or 3 of the leading competitors. While intra-industry expertise is beneficial, it can lead companies to implement the same solutions and customer experiences with little regard for the unique situations or opportunities that present themselves to companies. Companies should continue to employ industry experts albeit combined with a healthy intake of out of industry professionals.

Following trends without question

Whether it’s outsourcing or consolidation, companies can often fall into the trap of noticing herd behaviour and following suit. Companies can risk becoming immersed in big data projects or launching IoT initiatives without fully assessing suitability and relevance. Companies without a well-defined strategy latch onto what others are doing. Blindly following competitors is a symptom of a lack of strategy. Companies should continue to strengthen foresight through trend research but with the proviso that it is analysed together with internal business intelligence. Trends should influence strategy but never be it.

Singular focus on cost reduction

Every business wants to reduce costs but most do so with additional aligned objectives. A company might want to outsource to obtain market leading technology as much as reducing costs. Some companies see competitors making what appear to be cost reduction decisions when the actual reasoning is far more complex and nuanced. They close, outsource or dissolve business functions with a single-minded attitude towards lower costs equals better performing business. Business should look to reduce costs where possible but avoid taking a narrow approach where differentiation is put at risk and where innovation and development is stifled and destroyed.

Failure to maintain the ‘secret sauce’

Outlining your strategy to the board is reasonable, putting it on a LinkedIn group is not. Showcasing company success stories is something all businesses do. The foolish risk many take is in allowing business strategy and decision making to find its way onto Slideshare or equivalent sharing platform. There’s nothing wrong with sharing strategic direction, after all many do it already via annual reports, quarterly analyst updates and Medium blogs. However, there is a risk for companies who do not keep company secrets just that, secret. If you’ve struggled to build a differentiated and well run business, you would do well to keep the recipe for your success a well-guarded secret.

Be cautious of industry specific consultants

As a consultant, it pains me to write this but it’s true. Some consultants work in industries where their skills are used by all the major competitors. When work is that easy to secure there is a laziness that leads to repeatable proposals and solutions. Those commissioning consultants should endeavour to ensure that deliverables reflect the contractual here and now and not a project wrapped up the year before elsewhere. We’ve all seen slides presented with a competitor’s logo or brand palette. The awkwardness is laughed off when it is anything but funny.

Good luck