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Every professional athlete or coach knows that they can increase
their chances of success if they can find a competitive advantage. Some
work out more than their competitors and hope that better physical
conditioning will make the difference. Others practice more or develop
unique plays so that they will have better skills than the competition.
Still others seek to acquire better equipment that will give them even a
slight competitive edge. Whatever they choose to do, they all are
looking for a unique advantage over the competition. Being as good as
the next guy doesn't create competitive advantage. You need something
more - a unique strategy. These same principles apply in business just
as well as they do in athletics. Businesses that can execute best
practices only get to compete with their best competitors; however,
businesses that can define a competitive advantage beat their
competition. Here is a simple three-step approach to creating a
competitive advantage:
Internal Analysis: Begin with a detailed internal analysis. A simple technique to start the process is by beginning a SWOT analysis. Look at your strengths and weaknesses which are internal to your organization. Look at the people, the resources, and the processes. Look at your systems, infrastructure, policies, culture, and logistics. Be brutally honest in your assessment. What's good, what's not so good, and what could be improved? Summarize your conclusions so that you can see patterns if they exist. Most importantly, identify your greatest strengths since these will provide insights into competitive advantage.
External Analysis: Continue your SWOT analysis by looking at the external environment to identify opportunities and threats. Who are your competitors? What do they do best? Where are their weaknesses? What about suppliers, transportation, regulations, the economic environment, new entrants, labor markets, and consumer trends? A good external analysis will take some time and effort. There is a wealth of information available, and it is often difficult to know what data is relevant. However, the quality of the analysis will make it easier to identify opportunities and threats which can lead to defining the competitive advantage.
Define a Unique Strategy: There are other tools that might also be used to gain competitive insights beyond the SWOT analysis like a supply chain analysis or even basis research in your industry. Nevertheless, at some point the next step is to define the unique strategy. This goes well beyond goal setting or even striving to attain "best in class" performance in your industry. A unique strategy is the result of understanding strategic insights on how people and resources can be applied in a unique way to obtain superior results.
These three simple steps alone will not guarantee success. Not everyone will be able to define a unique strategy that will give your organization a competitive edge. Only those people who have extensive industry experience or have unique abilities to see "around the corner" as a strategic thinker will be able to do so. Unique strategies are usually elegant in that they are simple to understand, but not always easy to see - except in hindsight. Thus by looking in the rear view mirror, it is now easy to see how Steve Jobs applied Apple's unique capabilities to engineer and deliver such consumer products as the Apple Computer, iPod, iPhone, and now the iPad. These have been truly transformational products making Apple one of the most successful companies ever. He didn't just build another computer or phone. His Apple products outflanked the competition with new innovative features and benefits for consumers. They have changed the way we communicate and share information. While only a few companies will ultimately succeed at the same level as Apple, it is still possible for many organizations to beat their competition by focusing on their strengths and employing them in a unique way. Thus, instead of focusing on "best practices," look for the "next practices" in your industry. Define a unique strategy and create your own competitive advantage.
Internal Analysis: Begin with a detailed internal analysis. A simple technique to start the process is by beginning a SWOT analysis. Look at your strengths and weaknesses which are internal to your organization. Look at the people, the resources, and the processes. Look at your systems, infrastructure, policies, culture, and logistics. Be brutally honest in your assessment. What's good, what's not so good, and what could be improved? Summarize your conclusions so that you can see patterns if they exist. Most importantly, identify your greatest strengths since these will provide insights into competitive advantage.
External Analysis: Continue your SWOT analysis by looking at the external environment to identify opportunities and threats. Who are your competitors? What do they do best? Where are their weaknesses? What about suppliers, transportation, regulations, the economic environment, new entrants, labor markets, and consumer trends? A good external analysis will take some time and effort. There is a wealth of information available, and it is often difficult to know what data is relevant. However, the quality of the analysis will make it easier to identify opportunities and threats which can lead to defining the competitive advantage.
Define a Unique Strategy: There are other tools that might also be used to gain competitive insights beyond the SWOT analysis like a supply chain analysis or even basis research in your industry. Nevertheless, at some point the next step is to define the unique strategy. This goes well beyond goal setting or even striving to attain "best in class" performance in your industry. A unique strategy is the result of understanding strategic insights on how people and resources can be applied in a unique way to obtain superior results.
These three simple steps alone will not guarantee success. Not everyone will be able to define a unique strategy that will give your organization a competitive edge. Only those people who have extensive industry experience or have unique abilities to see "around the corner" as a strategic thinker will be able to do so. Unique strategies are usually elegant in that they are simple to understand, but not always easy to see - except in hindsight. Thus by looking in the rear view mirror, it is now easy to see how Steve Jobs applied Apple's unique capabilities to engineer and deliver such consumer products as the Apple Computer, iPod, iPhone, and now the iPad. These have been truly transformational products making Apple one of the most successful companies ever. He didn't just build another computer or phone. His Apple products outflanked the competition with new innovative features and benefits for consumers. They have changed the way we communicate and share information. While only a few companies will ultimately succeed at the same level as Apple, it is still possible for many organizations to beat their competition by focusing on their strengths and employing them in a unique way. Thus, instead of focusing on "best practices," look for the "next practices" in your industry. Define a unique strategy and create your own competitive advantage.
Leonard Kloeber is an author and leadership consultant. He has
extensive leadership experience as business executive and as a military
officer. He has been a hands-on leader in a variety of organizations
large and small. Most recently he was a human resources executive for a
Fortune 100 company. His book - Victory Principles, Leadership Lessons
from D-Day - illustrates seven bedrock leadership principles that all
successful leaders use. Download a free summary of the Victory
Principles at: http://www.victoryprinciples.com and find other bonus materials for leaders. Contact him at staffride@gmail.com or find his book Victory Principles at http://www.leadershipthebook.com
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