Pursuing a competitive advantage strategy
One of the biggest struggles in strategy is pushing a bold, distinctive identity for your company and brand. This is so common that we start the strategic planning process assuming that we haven’t pushed the envelope. We need solid reasons to venture out into (sometimes uncomfortable) new territory.
There are three reasons why we are often shy about pursuing a distinctive strategy.
We instinctively sense danger (especially in standing out).
This is a human problem. On the African savannah, our ancestors had to avoid being prey to survive. While we don’t have to worry about lion attacks, we’re left with a keen sense of danger hard wired into our brains. Standing out, that sense tells us, makes you prey. Standing out, however, is also your best path to being a predator instead of being prey. It’s also true that the meek end up as average in a world that increasing doesn’t reward averageness.
We lack confidence in our unique strengths.
It is so difficult to see your own strengths. First, in the extreme, real strategic strengths enable you to do things much more easily than others. Second, we often undervalue such strength in our personal lives, because doing the things at which we excel doesn’t feel difficult. Third, in our minds, if it’s not difficult, it can’t be worth that much. For these reasons, your biggest strengths are often undervalued.
We get far too many reminders of the success of others.
If you are like me, you read a lot of business stories. In these stories, we hear about the success of someone else. In some situations, that successful company is a lot like us, but in other cases, they aren’t. Regardless, we get the unconscious message that the strategy that worked for that company will work for us. In most cases, this is clearly wrong. For many of us, this tendency causes us to overvalue certain strategies, because we read about them all the time.
The two strategies that tend to get overvalued (and imitated) are commodity strategies and first mover strategies.
Remember, we read a lot about these types of companies because they are easy to spot, easy to research and easy to write about. The biggest company in most markets is often the commodity company with razor thin margins. This is a terrible strategy for many of us (if not most). Furthermore, the first mover has the first product or innovation, but is often the last one to profit. This is not to denigrate innovation as a key element of strategy, but it should make us wary. The single thing that makes a company a good story does not necessarily make it a good source of strategy.
How can we avoid these mistakes?
The first two are human psychology, and the best way to avoid them is guidance from a strategist who can spot this kind of thinking for what it is. If you can’t afford this, make sure you challenge your own emotional responses to strategic questions. Also, remember that focused strategy built around a truly distinctive strategic competency is the only real, sustainable success model.
The third issue of reading too many success stories, can be countered with reading failure stories and asking yourself questions. When you read about successes, ask why it would NOT work for your company. It’s also worth trying to figure out what the successful company’s unique strategic competency was. When you read about failures, ask yourself how YOUR company would have avoided the failure. This kind of reflection will help underscore the unique capabilities of your organization. Moreover, it may just lead you to an innovation that only your company can make successful.
If you’d like to discuss how we can help you pursue a competitive advantage strategy, consider holding a one-day workshop on Simplified Strategic Planning.
M. Dana Baldwin is Senior Strategist with Center for Simplified Strategic Planning, Inc. He can be reached by email at: email@example.com