The #1 Thing Your Competitors Will Find Toughest to Replicate

There’s a running joke on HBO’s hit comedy series, Silicon Valley. On the show, established and startup tech companies invariably end their presentations and funding pitches with lines like this (actual examples from the show):

• “We’re making the world a better place, through Paxos algorithms for consensus protocols.”
• “We’re making the world a better place, through canonical data models to communicate between endpoints.”
• “We’re making the world a better place, through scalable fault-tolerant distributable databases, with ACID transactions.”
• “We’re making the world a better place, through minimal message-oriented transfer layers.”

Besides being a funny gag, it should bring a key question to mind: are you differentiating your company in a way that truly matters?

I don’t mean to suggest that creativity doesn’t pay off, or that innovation cannot come with giant rewards. Sometimes being the first to launch a new product is massively successful. Other times, market disruption forces you to be inventive. These are not impulses to be ignored.

Change pays off when the outcome truly matters to your customers. Yet, for all the time we are encouraged to think “Outside the Box,” how many times have you truly looked “Inside the Box” for ways to set yourself apart?

I have long believed that customers don’t necessarily buy a product or service, as much as they purchase an outcome. Sure, price matters, but price is a function of value: things become commoditized based on the fact or perception that you can get the same thing from almost anywhere. Instead, quality, reliability, delivery, experience, etc., drive differentiating value. Think of the times you’ve been willing to pay more, or give virtually all your business to one supplier, for any of these outcomes.

This brings me to what I believe can be the single most valuable differentiator in your business, and the true epitome of thinking “inside the box.” I can summarize it in two words: Flawless Execution.

Much of the products and services that you can invent, innovate, improve or redesign could eventually be replicated or outdone by your competitors. It doesn’t mean you should stop trying, it only means that putting all your eggs in the “Outside the Box” basket is risky. Don’t lose sight of the fact that the #1 thing that your competitors will find toughest to replicate is (once again) Flawless Execution.

One specific example can illustrate this point. I know a company that made an entire line of underground enclosures for utilities companies – vaults, manholes and other containers that housed meters, valves, pipes, fiber optic cables and all sorts of other infrastructure. Their business had grown steadily for forty years, but they had suddenly found themselves surrounded by competitors, and their market share was in decline.

After intense discussion, this company decided to ditch its standard line of products and be first to market with a brand new and highly innovative one (at least for the underground utilities industry), which made it easier for pipes and conduits to enter and exit the vault. They hired engineers, bought new tools and equipment, secured a utility patent and hired an expert naming company to brand the new line. The company invited customers to witness “beta tests” of the new vault and launched it with great fanfare. They even gave the product fancy aesthetics, giving it polished edges and painting it a cool color that made it look more modern than competitors’ old-school, cold and grey concrete enclosures.

After much work and some initial success, the result was a complete dud. Not that the product was bad; it had some features that customers liked, and it boasted several true improvements. However, most of the new product’s features failed to meet their customers’ real needs – particularly, short delivery times, so their construction projects could be completed sooner. In fact, the new product took slightly longer to build and deliver than competitors’ standard vaults. In spite of many improvements, customers saw no need to change products, and they purchased more of the “old school” enclosures from the company’s competitors. Market share slid further.

In the end, like the tech firms in Silicon Valley, this company had attempted to “make the world a better place, through modern-colored, polished enclosures offering modular conduit access.”

I know this company because I led it through a turnaround, after it fumbled the ball attempting to recover from the misstep above. The recovery was straightforward, and focused on putting people and processes in place to offer reliable delivery times consistent with customers’ expectations. We revamped our customer service department and gained the reputation for being the industry’s most responsive supplier.

We then took it further, investing in innovation that resulted in lead times that were shorter and more reliable than our competitors. Our plant was soon filled to capacity, and revenue grew by nearly 50% in one year.

Competitors were caught flat-footed. Flawless execution is difficult, and it sometimes comes with painful choices about people, legacy, identity and long-held beliefs. For these reasons, their response was slow, and we racked up millions in sales.

When you think outside the box, is it in a way that improves your ability to fulfill customers’ basic needs? Or is there risk that you are pursuing a great idea with no real demand? Are you giving up an opportunity to focus inwardly, and improve the things that will bring greater enduring sales with less gamble? Are you failing to see the lowest-hanging fruit?

More to the point, when have you recently thought about how to leverage the #1 thing that your competitors will find toughest to replicate – Flawless Execution? When is the last time you challenged yourself to balance creativity with thinking “Inside the Box?”

Chris Larkins is a highly accomplished chief executive and a coach at CEO Coaching International.