Maintaining that Competitive Edge
You must be the competition!
“I stood up and told the company that 5 years from now we will have a new competitor and that new competitor is going to be in every business that we are in and they’re going to be faster, more efficient, and more capable. And they’re going to put us out of business, and the only way that we’re going to prevent that is by becoming that company.” - Michael Dell
Competition maintains sharpness, innovation and efficiency. It’s true in business, and it’s true in life.
All businesses go through cycles, there are prosperous periods and difficult periods.
The thing about difficult times is that they bring essentialism to the equation. They bring a need for more structure, a need for more work, a need for better ideas. The good businesses embrace this and, in turn, embody what they need to.
The poor ones fail.
It is the competitive spirit that encourages innovation, creativity and forward progress. It is the environment in which all true progress is born.
High Competition
During this period, things are difficult but clear.
You or your business face obvious competition, there are obstacles in the way, and the only choice is to adapt and improve.
Every day, you face a different challenge, and for a time, you are in reactive mode as you get to grip with them.
As you start to get comfortable in this situation, you can start to plan and implement better operational processes, hire the right staff, and ensure that waste is kept to a minimum.
Your operations become lean and efficient.
A good business will start to dominate its own section of the market or at least be a big player.
Those businesses that cannot handle that environment will fail or be absorbed by others that can.
Low Competition
What about when you are at the top of your industry? When times are very good, you seem to be way ahead of the competition, and everything seems to be flowing?
This is a dangerous time for a successful business.
Now is when complacency starts to develop within the business, and inefficient and wasteful practices begin to take root.
You have a higher number of staff than probably needed, doing more busy work than truly effective work. The environment becomes less creative, there is less innovation, and the business starts to become much less efficient.
The real risks aren’t evident in the early stages of this. For a time, your business is truly dominating, making large profits and is ahead of its competitors.
That inefficient and wateful rot continues to grow, it turns malignant, like a cancer. If left unchecked, it starts to calcify.
Every aspect of the business changes, the ability to react to the market becomes slower, the ability to make changes is delayed, there are more layers of decision makers, staff are more wasteful, and less efficient.
It is at this time that those competitors who have been waiting in the wings may start to take advantage.
Or, maybe a new entrant to the market with new ideas and ways of running the business blazes a trail and wipes you out.
The Cure
The way past this is to think like Michael Dell of Dell Technologies Inc., or David Baszucki of Roblox Corporation.
Their idea in these times is to look over their shoulder at the competition (or potential competition) and ask themselves:
What is that company doing better than us?
How is it being more efficient? How is it being more creative, more innovative?
How is it challenging itself?
How is it going to replace us in five to ten years?
And then they decide to be that company.
Instead of allowing others the chance to usurp you, why not decide to be that company?
To cut off (metaphorically speaking) the parts of the business that are no longer useful and allow the whole to survive and thrive.
So ask yourself: What are you doing to replace yourself in five years?
What products or services do you have that you are actively trying to replace? Regardless of how profitable they are.
If you don’t replace them, you can bet that someone else will.
It is survival of the fittest, on your terms!
“Success breeds complacency. Complacency breeds failure. Only the paranoid survive.” - Andrew Grove
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