Tag Archives: competitive advantage

6 of the most common strategy traps

strategy trapsStrategy without change is pointless, and doing what everyone else is doing is not a strategy; it’s a key principle most business people don’t get.

Take the most common advice you hear out there: don’t limit yourself to niche market; you won’t make any money.

True innovation makes competition irrelevant

I often use the quote “Never innovate to compete, innovate to change the rules of the game” to express the mindset of a true innovator. You see, I detest copycats. I pay attention to maverick companies, not the ones that merely implement some framework to put themselves in a position to innovate.

Then, our culture likes to pit companies against each other because it’s the type of  stuff that grabs headlines; unfortunately most can’t see beyond the bias.

And though competition breeds innovation, sometimes it does bring out the best in everyone, most of the supposed “innovation” that copycats bring to the table is nothing more than mere superficial increments. Or in the case of Mexico; a tropicalized version of the original product or service.

For me, innovation makes competition irrelevant. Anywhere. Period.

To understand why being a true innovator is so hard, it is wise to understand what true innovators do and what non-innovators do. There are is an endless list of books, blog posts, articles, whitepapers and talks about the distinction between innovation and competition. Futurist Daniel Burrus has thought long and hard about the difference between competers and innovators, here’s a comparison:

Does social media marketing still matter?

Does social media marketing still matter?

Social media marketing doesn’t matter. Or so says an article on MIT Sloan Management Review:

I argue that we have reached the same point with social media marketing. In terms of competitive advantage, social media marketing simply doesn’t matter. Having a presence on Facebook and Twitter is no longer sufficient to provide any source of competitive advantage for companies — not when all of their competitors have a presence on Facebook on Twitter, too.

Monitoring social media chatter and sentiment won’t provide any competitive advantage on its own, because all your competitors are monitoring the same content as you and can derive the same insights. Customers today expect to be able to engage companies over Twitter and other social media channels. Companies can certainly deliver better or worse customer service over these channels, just like they can over the phone or in person, but these challenges become questions of backend operations, not marketing. Social media marketing has become table stakes for competitive business in today’s world, not a source of competitive advantage.

The fact that social media marketing doesn’t matter is supported by the data from our 2014 survey of social business. Our data showed that using social media in other aspects of business — innovation, transparency into organizational communication, management and recruiting, and integrated into business operations — were all meaningful differentiators for company’s social business maturity and social business outcomes. Whether or not companies engaged in social media for marketing, however, had little meaningful impact on these outcomes.

He is correct that social media marketing has matured, even though most marketers haven’t figured out how to measure the ROI of their efforts on social media. But, social media marketing does matter.

Here’s why…

Why is competitive advantage temporary?

competitive advantage is temporary

An often asked question. Yet, there are those who think that competitive advantages are everlasting.

Competitive advantage, it seems to me, has become an instrument of finance. As in, how can our company accumulate hoards of cash to become sustainable?

The defining metric for said advantage is profits. That is a mindset, I believe, of playing not to lose.

Accumulating a war chest of money doesn’t mean you will outlast the next wave of change, you have things upside down, for an investment in innovation is an investment in your future.

Competitive advantage in social media: Carpe Diem Stupid!

APC Back-UPS ES 500 surge protector

R.I.P. after 6 years of use

Yesterday one of the surge protectors in my house, the Back-UPS 500 from APC, finally gave up on me after 6 years. Since I’m using another surge protector from Belkin to protect other electronic devices already, I ran over to Office Depot to buy replacement for the APC.

I ended up buying a Belkin.

As I was driving home I started thinking about why I bought a Belkin surge protector and not another one from APC. My conclusion was that I think I got ‘primed’ to buy Belkin because I simply liked (looks and price) the other one I have at home more than my older one from APC. I also think that the fact that the APC one died one me affected my decision.  A product that breaks down on you isn’t going to inspire you to buy the same one.

Empathy drives experience innovation

The Walt Disney Company

Image via Wikipedia

Recently I was in Mexico to have lunch with a friend. I went to pick him up from from a meeting but had to wait a few minutes outside of his offices. As I was waiting for him I parked in front of a pharmacy and it dawned on me that in this particular area there where five pharmacies in about a half mile radius. These pharmacies all looked alike, they were not from the same brand and the only distinction was the color of their walls. I have no doubt they operate the same way. It got me thinking about how I could differentiate one from the others…

Experience innovation is a difference maker

Innovating an experience improves or reinvents the customer experience in the purchase or usage of a product or service. Companies such as Disney stand out as a prime example of what it means to innovate a customer experience. Apple is right there too with their Apple store. The reason both stand out is because they’ve , says Scott Gould.

Another great example of a company that stands out is Umpqua. We all know what a traditional bank looks like, well :

Umpqua’s 15-year track record of growth has little to do with the products it markets, which are virtually identical to the products offered by other banks. What’s distinctive about Umpqua has to do with how it offers those products — its commitment to reimagining the experience of interacting with a bank. Davis puts is this way: “If you took a person, blindfolded them, sent them to a bank, and took the blindfold off, 99% percent of them would say, ‘I’m in some bank somewhere.’ We want our customers to say, ‘I’m in an Umpqua bank.’ We don’t want the experience of banking here to feel like banking anywhere else.”

That’s why Umpqua designs its branches to appeal to all five human senses.

What Umpqua understands it that to be and stay relevant, you have to be different in every sense of the word. Not just ‘be different’ as marketing ploy, but ‘do different’ and make a difference. In the video below, Fast Company Co-founder, Bill Taylor starts talking about Umpqua around the 9 minute mark to help clarify my point (watch the whole talk, it’s worth it):

See what I mean?

What Not to be

Slice Perfect is another fine example. They’re not your typical pizza place. Just like Umpqua they started by asking ‘’. The result is a different kind of pizza place that goes deeper than just looks. When searching for a sustainable competitive advantage, experiences are the hardest to copy. No experience is the same. How many have tried to copy Disney and failed? Starbucks?

The Killer App of Trust

Trust is an often overlooked competitive advantage. The Ritz Carlton knows this very well and have been creating trust with it customers for a long long time. They understand than . This means that that by creating a level of trust between a companies employees and it’s customers, authentic value in the form of better service can be delivered. That’s not manufactured value, it’s real authentic. Zappos also understands that by empowering employees to develop their own customer relationship breakthroughs it makes the customer experience more authentic. The result is more trust with customers.

Experience innovation is also difficult to accomplish. Jeffrey Phillips of OVO Innovation says:

Customer experience innovation requires understanding what customers value in the “touch points” and interactions with your products, services and your firm, and placing the right investments on the most important and valuable touch points.  Customer experience needs to consider each “channel” a customer may use to interact with your firm:  retail locations, telephone, web, email, direct mail, advertising, etc.  The total customer experience cuts across a number of vertical silos within many organizations, including sales, marketing, products and customer support and service.

Authenticity is the result of human innovation

If you’re familiar with the Experience Economy, then all of the above is nothing new. But if you’re not, in the video below Joseph Pine talks about how customers really want an authentic experience:

So how do you start thinking about innovating your own experience?

Remember the What Works Matrix? Here’s the time to use it. I’ve already given you some examples of companies that have distinct customer experiences, you can pick them apart for ideas. You can then .

wrote a great presentation of the 4 practical steps he took to create . You can use the customer experience cycle map to look at where a ‘shake up’ might come useful to deliver a better experience to the customer. Once you identify those critical touch points you have your challenge that needs to be addressed, it’s time to go to the What Works Matrix and start searching for alternatives that you can the bring over and implement yourself.

Though going through these steps will not result in instant results, it’s an exercise in opening your mind on how your customers experience you. Once your mind is open you’ll be a lot more concerned about your customer experience and start thinking up ideas in no time.

Remember: Empathy drives experience innovation

Break out of orbit!

Disney, Apple, Ritz Carlton, Starbucks all provide a distinct experience when compared with the ‘old way’ of doing things. If you sell commodities (like Starbucks) you can change how your customers purchase or use your products or services to create a distinct customer experience.

The point is to understand this. Ask yourself: What don’t you want to be? Do you want to be like your competitors?

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