Since I do a great deal of speaking to c-suite executives, I am often asked, “Why don’t more companies succeed at defining their competitive advantages?” I have thought long and hard about that question. Some answers are obvious; some a little less evident.
If you have struggled with carving out your differentiation, here is a list for you to consider:
1.Stuck in a belief system: Preconceived notions can be devastating. We often hear,” you don’t know our industry, it is all about price.” It is deadly when the CEO and top management believe this because they will never be able to convince sales people not to sell on price. Once resisters experience well touted competitive advantages, they become converts and stop caving in on price. They learn that delivering well defined value does command a premium.
2. Organization: Lack of trust and/or respect for top management causes instant resistance to any new concept. Top management must think and act strategically. It is their job to enforce strategic change and lead the charge of the supporting team. Without the C-suite leading the orchestra, there will be nothing but noise to follow.
3. Inertia: We are doing “well enough,” our bottom line is fine. If we have to take on extra work to make a better profit, we are not sure we want to invest the energy to do so. Companies who commit to living in a fishbowl of new metrics, and commit to execution, experience rapid growth, justifying the energy invested.
4. Internal Champion: Any new internal project requires an internal champion to be the team captain telling everyone when and how fast to row. They keep the team motivated towards the desired outcome.
5. Customer Pulse: Lack of belief in customer market research or no research investment at all. Less than 10% of mid-market CEOs have invested in outside double blind research, hence are only guessing at what their customers value. 90% of the time their guesses are wrong.
Peter Drucker says 90% of information used to make decisions comes from inside an organization, and 10% from the outside. That is exactly backwards. How are you tracking customer values?