How to succeed in a hyper competitive world?

(Reading time 4-5 mins. Achieving continuous growth in a hyper competitive world)

Let's get this one straight.

If you think you (and your company) have a competitive advantage over others, maybe you are grossly mistaken. Even if you have one, it is not for a long haul.

Maybe it will last for another 6 - 12 months before your competitor closes the gap. We have reached a point in time where your advantage is continually created, eroded, destroyed in a short period of time.

So is your growth.

It is no longer possible to increase or protect your revenue (and profitability) by restraining the level of competition in an industry. For decades, companies held their market share and tried to keep their competitors away by putting entry barriers around their industries.

They played porter's 5 forces, deployed entry barriers and strategic advantage to the hilt.

Not anymore.

If you thought a chain of hotels (assets) is an entry barrier - AirBnB twisted it.

If you thought a fleet of taxis (assets) is an entry barrier - Uber flipped it on its head.

If you thought high performance hardware is an entry barrier - AWS knocked it out.

If you thought your loan book is an entry barrier - Lending Club wriggled in.

If you thought your home base will make you the President - Trump took it away.

Competition is everywhere and the way we are consuming products and services has permanently changed.

We might not want hotels but need accommodation. We might not want banks but need money management. We might not want cars but need transportation. We might not want insurance companies but need risk protection. We might not want hospitals but need health care. And so on.

The moot point is - no business is safe. The form, function and substance of a business is being attacked by both existing competitors and new entrants with innovative business models.

In this back drop, how can you grow your business?

First the bad news. No one has the right answer including the pundits. If they knew, they will be building it themselves.

Now the good news. Your customers and competitors have the same problem too!

Their industry is getting disrupted and they are also trying to catch their tail to stay relevant. Their widgets are getting knocked out of the race and another competitor, with a completely different way of servicing a customer need, is eating their lunch.

Sounds like a dead end? Not really. There is a way out.

And it's simple (well not really).

Treat your business as a 'movement' with a strong purpose and a bold mission.

To better understand this phrase, let's first understand the meaning of the word 'business'. According to english dictionary, business is:

"a person, partnership, or corporation engaged in commerce,manufacturing, or a service; profit-seeking enterprise or concern"

So far, we have defined businesses as a profit seeking initiative that primarily caters to share holders interest. A group of people get together to start a venture to offer products and services that offer value to customers in exchange for revenue that yields profit.

We then built rules and standards around this entity to make it an establishment that serves its interest. The rules and standards governed how you handle equity, assets, liabilities, taxes and general governance.

In doing so, you could cater to the highest or lowest common denominator of 'human value' and generate profits. As long as it it is legitimate, there are no other guidelines to generate revenue.

For example, you could generate billions of dollars in profits by selling potato chips, providing taxi services, writing software, by saving lives with medicare or even producing pornographic stuff!

This model and way of thinking has served us well. It helped businesses generate revenue and enjoy decades of profit.

Until now. That party is coming to an end.

Why?

Consumers (as customers) were always limited by choices they have had. Not any more!

Till the end of last decade (2010), consumers had to choose hotels, airlines, hospitals, auditing firms, taxi companies, food(s) and other stuff made available to them.

They were restricted by limited choices. They were served value as the establishment deemed it fit.

They probably were not completely happy with the choices offered or the value they got to experience. Hey, but then who really cared.

Businesses prospered. Profits poured and shareholders were happy.

One thing changed this perfect setup.

Internet.

Over the past 5-6 years, Internet and social technologies have facilitated the rise of the 'networked economy'. An economy that seemingly allowed disparate but networked individuals create value in a way that once only centralized organizations could.

It allowed 3 young men in California to start a movement, called AirBnB, that allowed millions of people connect with each other and exchange value by providing 'bed and breakfast' to travellers.

Hilton couldn't.

It allowed Renauld Laplanche to start a movement, called Lending Club, that connects investors directly with borrowers and deliver lower rates for borrowers and higher returns for investors.

Banks couldn't.

Uber, Google, KickStarter, Etsy, Alibaba, PayPal, eBay and many more movements were started to offer a new kind of value to consumers.

In the industrial space, General Electric is completely re-inventing itself to follow a new mission led by GE Digital.

Each of these movements are anchored by a solid purpose where customers collaboratively co-create value with the company.

These nouveau businesses explore a dynamic range of ideas and strategies, all while getting the best input from diverse sources. They are not rigid but are lean, agile and fluid in their structures and thinking.

They derive power through shared purpose and culture. Not agency and hierarchy.

They are a Business for Business (B4B).

Simply put, they are 'movements' with a purpose and a bold mission.

Let's how they are able to grow in the era of hyper competition. I am going to take the example of Microsoft to drive home key points.

Though Microsoft is unlike the newly bred platform companies, over the past couple of years, it has certainly demonstrated behaviours that reflect movement like thinking.

1. Purpose and Mission

If your business simply exists to offer products and services that are in demand, be rest assured that you will spiral down to become a commodity. It's race to the bottom.

Businesses, including people, who have a solid purpose (a North star) and a mission that is inspiring (to all stake holders) will move forward with a sense of clarity and direction even during uncertain times.

They will pursue value creation for their clients by honouring their own values.

Without this, your business will fall prey to vagaries of uncertain times and poor decision making.

For example, Satya Nadella redefined Microsoft's mission statement in 2014 from:

"Put a computer on every desk and in every home."

to,

"to empower every person and every organization on the planet to achieve more.”

Microsoft has now found its mojo under Satya's leadership and on its way to re-invent itself to be a high energy company.

A purpose led mission statement injects energy into any organisation. A shared mission, clear strategy, and culture can bring the best in individuals and in the collective group.

Inquiry #1:

1. What is your company's higher calling or purpose?
2. What is your company's mission? Is it inspiring enough for you?
3. Is your top leader articulating this higher calling every single day?
4. Is the top leadership living this purpose and values?
5. Who is getting promoted, appreciated and let go? Does it resonate to this higher calling?

2. Change your worldview

A world view is a mental model of reality - a framework of ideas & attitudes about the world, ourselves and a comprehensive system of beliefs.

A mental model is the representation of external reality that plays a major role in cognition, reasoning and decision-making within your business.

Many businesses struggle to ground their path in both the world we live in and the future we strive to create. So, they end up seeing things differently, reason and take wrong decisions.

For example, Nokia did not acknowledge a worldview that consumers are ready and are moving towards more engagement. They missed the mobile apps era.

Blockbuster did not acknowledge the fact that people want to stream movies from the comfort of their home.

And the hoteliers missed the worldview that people need 'accommodation' more than they want to stay pigeoned in hotels.

In Microsoft's case, Satya changed the worldview with an outside in perspective of reality:

"Today, we live in a mobile-first, cloud-first world. It’s important to note that mobile-first is not just about the mobility of devices; it’s centered on the mobility of experiences that, in turn, are orchestrated by the cloud."

This worldview has completely changed the way Microsoft reasons and takes decisions on all important topics.

Inquiry #2:

1. What is your company's world view?
2. What is your worldview with respect to your job and career?

3. Provide inspirational leadership

Leadership is the process through which a person inspires others to follow a vision. Both in good and bad times.

Companies led by true leaders have a powerful tool to increase their competitive edge. Inspired employees are more than twice as productive as satis?ed employees.

At the same time, the company is able to consistently pull off innovative or heroic feats in business because so many employees are motivated to make them happen.

Leadership quotient in an organisation directly determines your company's growth and longevity in uncertain times.

For example, Satya's inspirational leadership has turned fortunes at Microsoft. Moreover, he and Jeff Weiner (CEO, Linkedin) have found each other and are on their way to carve a huge niche for the combined organisation in the years to come.

Inquiry #3:

1. Is your company led by leaders who inspire people?

4. Shift mindsets

In the new era, mindsets are more important than technologies and processes.

What happens when things don't go your way? When growth tanks?

The phrase “new normal” has made a comeback after the financial crisis, suggesting a fundamental shift in the economic and business landscape. For many industries, the traditional growth cycle is out of bounds.

The key question is are you going to blame every other thing - markets, competitors, economy and play a 'victim' card or demonstrate 'growth mindset'.

This is the time when companies have to amplify growth mindset and be willing to lean in to uncertainty, take risks, move quickly when you make mistakes, recognize failure, tweak things and surge forward.

To maintain market share, you will need to differentiate yourself by creating new products/services, improving current offerings and finding new ways to reach customers.

Simply put, mindsets can make or break company.

Inquiry #4:

1. Is your company demonstrating 'fixed' or 'growth' mindset?

5. Zero distance to customers

"The important and difficult job is never to find the right answer, it is to find the right question." - Peter Drucker.

Companies that tend towards 'zero distance to customers' have a high chance to really understand the needs of the customer.

Imagine if each and every employee of your company is able to apply 'design thinking' and empathise to such an extent that they are able to articulate problems that customers have not yet recognised themselves.

Another aim of 'zero distance' with customers is to become a flatter, more agile company that responds more rapidly to consumer demand. Eliminate layers of management to bring sensing and decision making closer to the customer. 

For example, Haier has set about eliminating internal and external borders. The company has started to invert its management structure and eliminate middle management to instead use the Internet to structure self-managing teams around customers.

Inquiry #5:

1. Is your customer at the center of your company's business model?
2. Do you use design thinking to get closer to your customer?
3. What is your management thinking around proximity to customers?

6. Launch Speed Boats

When your account manager walks into your cubicle with this question, what will you do?

"I have an idea and I want to share this with my customer. If the customer likes it then how fast can we help realise the idea and deploy it?"

Will you encourage this move or will you pose many questions leading to compliance?

We live in a fast changing world. Markets and opportunities move thick and fast. The future is unpredictable, shaped by nonlinear changes and chance events - which are also 'opportunities'.

Going forward every business should acknowledge impending changes and develop experiments - called 'Speed Boats' - to distill and scale up promising business ideas.

If you don't have a speed boat culture within your company, your business model could be compromised or you might even miss a golden chance to seize an unique opportunity.

It's time organisations embrace agile mindset to manage during uncertain times.

Inquiry #6:

1. What disruptive technologies might open up new opportunity spaces?
2. Who will your future customers be in the future? What will be their priorities?

 

7. Execute like Hell

"Develop your high level strategy, choose your tactics, be agile and execute like hell."

In uncertain times Strategy is overrated, simply doing stuff is underrated. One thing definitely works - It’s called doing things.

It has been stated that 90% of well-formulated strategies fail due to poor execution. There have been enough written on this topic. One of my all time favourites is by Ram Charan and Larry Bossidy.

It's simple. You win when you execute like hell.

Inquiry #7:

1. Do you have a culture of execution?

8. It's ok to screw up

When you move forward with such pace and intensity screw ups are bound to happen. When things go wrong, here is one of the most powerful sentences in management lexicon that you need to use.

"I screwed up. I apologise."

Honesty is at the heart of all great leaders. Honesty is at the heart of confidence – being honest about your own ability to create a successful environment.

For example, when Reed Hastings (CEO of Netflix) introduced a price hike way back in 2011 he knew he screwed up big time.

Enraged customers flooded the Netflix site with tens of thousands of comments, as well as a barrage of tweets under the hashtag #DearNetflix.

Reed Hastings made a public apology in his blog which started with - "I messed up. I owe everyone an explanation."

Nothing beats honesty. Try it.

Inquiry #8:

1. Do you have a culture of execution?

9. Repeat steps 2 to 8

Finally, when you have achieved big success go back and redo steps 2 to 8.

In Summary:

As we move rapidly into 2017 and beyond one thing is certain - change is going to come at us fast and furious. A study conducted by innosight pegs the average life span of S&P 500 company to be 14 years.

Companies that re-invent themselves around a solid purpose, mission, worldview, right mindsets, inspirational leadership and customers will survive the onslaught. Maybe even thrive and flourish.

The next decade of value creation and growth favours businesses that are willing to change and set themselves to succeed amidst new realities.

That reality requires you to treat your business as a 'movement' with a purpose and a bold mission.

Would you agree?

Follow through my other articles on B4B idea

1) Are you a B2B or B4B Company? Find out. [5 Minutes read. Plenty of examples and inquiry].

2) Why B4B Selling is the way to go? [3 minute read. Challenges B2B seller's thinking]

3) B4B Companies are H4H companies too [3 minutes read]

4) B4B companies don't F##& up their culture [3 minutes read]

PS: Picture courtesy - www.dilbert.com

About Agility Nexus

Agility Nexus (www.agilitynexus.com) is a Sales and Business Consulting and Coaching company serving business leaders in Technology Industry to accelerate revenue generation. We consult, coach, train and solve problems at the intersection of marketing and sales. We blend various strategies including Emotional Intelligence to help sellers better connect, engage with customers and offer great customer experience.

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