Knowing what your business can do really well, better than anyone else, guides and determines the future of your business. Not knowing leaves your business at the mercy of the market and your competitors.
Active Knowledge Questions:
What does your business do better than anyone else? Does everyone in your business hold the same view?
Does Success Only Come To A Few?
Success is not something that just happens overnight. It requires focus, hard work and perseverance. To succeed on an enduring basis requires a lot more than just being good and following everyone else’s lead in the market.
It requires conditioning, the continual development of the right capabilities and the right mentality. In the case of businesses, the right mental attitude is represented by, and reflected in, the competitive engine of your business.
But often a sense of what capabilities the business should be building is amiss. Ask senior leadership the question, ‘what is the business really good at?’ and the response is often vague, non-committal, and conflicting.
Success will come to those who know what they excel at, recognise where they need to excel, and how to turn their capability into something which will allow them to outcompete all others in their chosen marketplace.
What your business excels at must be the cornerstone of how you have chosen to compete within your marketplace. Remember, we compete today around the value we are able to deliver our customers against their needs. But need and value are complex and there are many positions that you can take in that matrix. Each of which are unique and allow you to position your offerings so they may outcompete others in your market.
Your Strategy Is An Outcome
Your business does not exist just for the sake of existing. If you want it to be really successful, then it should also not exist just to profiteer. Your business was likely formed to meet a need in the marketplace that you recognised and believed you could meet better than others in that market.
That need is your customer focus and the area in which your business must excel.
It is also likely that when you entered the marketplace you did so with a specific, and possibly unique, value proposition. One you believed would outcompete others in the market.
That value proposition represented your competitive posture. This being the way you decided to position your offering in the market so that it represented greater value than others could offer.
This unique value proposition would have been built upon a capability, an ability that you possessed or acquired, which allowed you to deliver on what that value proposition promised.
The competitive strategy of your business is an outcome of the way you view customer need in your market. There was likely an internal dialogue as you crafted your strategy considering need as you saw it, the opportunity it presented, the value you would need to deliver and what you needed to be really good at to make it all work and be successful.
Your competitive strategy is targeted at a specific customer need and built upon your business’s capability to deliver value into that need.
What does your business need to excel at? The original capability, which formed the cornerstone of your competitive strategy.
The Way We View Capability
If we quickly step back into MBA talk, we find some basic approaches to identifying where your strengths as a business lie. They are:
- SWOT (and all its variations): What do you see as your strengths, weaknesses, opportunities and threats as a business in your present markets?
- Core competencies: What are the deep-seated competencies – your know-how – that the business invests in and holds, which give it a significant market lead and can be applied to generate multiple revenue sources?
- Resource models: What are the internal resources and capabilities that your business possesses and how may these be used to generate revenue?
Each of these traditional approaches are principally inward-looking. They ask: What can you do well? What resources do you have? How may these be applied to the marketplace to earn revenue? It leads your business to view the market through the lens of its existing capability – and, herein, lies a significant weakness. Your view is limited to your present capability and its application. This may well close out many other opportunities that you simply cannot see.
In developing your competitive strategy, I believe you must first look to customer need and value, and then ask where may your capabilities align with that need/value? Can we deliver a degree of value that will outcompete others in this market? It is a matching, leveraging and positioning approach that first searches out need, which then looks to see how you may bring a unique value to that need.
When you seek to view capability, look at it through the lens of your customer and their needs.
Needs Change, And So Do Competitors
Your competitive posture, how you have chosen to compete and deliver value, is dynamic and likely ever evolving. Certainly, customer needs, technology, competitors and the markets in which you have chosen to compete are continuously changing and evolving. That means you must also evolve and continually step out if you are to remain relevant in your market and to your customers’ needs.
Therefore, when you think about your own capabilities as a business, what do you think must be happening to them? Yes, they must also be continuously evolving and being strengthened. I like the concept of ‘compounding’ when it comes to strengthening a business. Always building on what has gone before, wasting nothing, both successes and failures.
So as you look to identify your capabilities, the strengths which will allow and sustain your business’s capacity to outcompete others in your market, ask yourself, ‘How are we compounding on this capability so that it is always getting stronger?’
The lens of your customer and their needs, applied to the changing environment of technology, demographics, regulation, preferences etc. and the marketplace, generally, will allow you to form a view on where your capabilities need to track to remain competitive.
So How Do I Know?
So how do I know what I am really good at? Well, this is the wrong question to be asking. Better questions are:
- What do I really need to be good at for my business to deliver the value required to outcompete everyone else in meeting the need I have identified?
- How do I build, acquire and evolve that capability to remain relevant and competitive?
- What’s changing in the world that may/will impact that need I’ve identified and what opportunities and challenges do they present?
The answers to these questions will enable you to identify what your business will excel at. In turn, allowing you to lead the market in meeting this customer need.
How do I know what I excel at? It needs to be what is required to win and grow the pool of customers whose needs you are going to meet.
An entirely new level of performance.
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All the best in the success of your business,
Richard Shrapnel
