The changing art of competitiveness
Which is the odd one out? Wimbledon, BREXIT, The Olympics or Sports Direct? OK, so it’s a trick question…they all demonstrate an aspect of competition, allegedly the lifeblood of every business.
Wimbledon and The Olympics may seem obvious- sports people all trying to win. However, for those of you old enough to remember Eddie the Eagle Edwards; his triumph was simply taking part. (If you are younger, go watch the movie). Wimbledon epitomizes that quintessential British hope of success and in 2016 we were rewarded. BREXIT on the other hand has the pundits alternately wringing their hands with glee or despair at the impact on the British ability to compete on the world stage.
The darker side of competitiveness
Back in the late 1980’s early 1990’s we wore ridiculous padded shoulders and the original movie Wall Street and later Tom Cruise yelling, “Show me the money” characterised a dog eat dog world of crushing the competition. I would like to think we have moved on from there, but apparently not in all respects. There is dismay over drug enhanced performance in sports and the chain Sports Direct was roundly criticised for its awful workplace practices. It would seem that some institutions are still trying to cut corners and costs to gain competitive advantage. Is that the way for business in the 21st century to achieve competitiveness?
There’s a misconception that survival of the fittest means survival of the most aggressive. The adjective ‘Darwinian’ used to refer to ruthless competition; you used to read that in business journals. But that’s not what Darwinian means to a biologist; it’s whatever leads to reproductive success. Steven Pinker
There is an interesting shift emerging about how huge corporations regard others in their industry- not as the enemy- but as potential partners. Investment is necessary for most business growth but it is risky.
..in order to safeguard the company’s future competitiveness, CEOs may have no other choice than to invest now.
Many companies are now turning to joint ventures to share that risk and maintain competitiveness in an overall sense.
The “new” competitiveness of the 21st century business
Unlike the 20th century model of business being inward facing, worrying about losing business to others in their industry and cutting costs to appear more appealing, there is a shift towards consumer facing business. In the age of technology, consumers are quick to share on Facebook and other social platforms, a great product, good customer service and make recommendations. In the same vein they will spread their tales of woe about rude salespeople, hard sell tactics and anything a company does that makes them, the consumer, feel less valued.
To be competitive nowadays is less about price and more about perceived value. If people only bought based on price, then Apple would be out of business. Successful businesses have the customer at the heart of their marketing, sales and product development. New start-ups use crowd funding to raise investment- directly tapping into their potential target market and responding to these potential customers’ suggestions as to how to develop and market the product or service.
It is all about relationship and responsive marketing. Yes, the supermarkets are famous for their price wars but they no longer treat their employees as cheap labour and are very clear on developing customer loyalty, not just cutting costs.
None of this is a new idea…it simply took time for business to see it as a viable alternative to the aggressive competitiveness that for some time actually worked. For too long companies were banging their heads against perceived competitors and suffering as a result. If you see the flow of business as a river- it meets a boulder in its path and has a choice; pound away for decades eroding the boulder, or divert around it. Head-butting competition is painful and lengthy. Far better to find an alternative path.
The competitive edge is now a mixed model
Unlike the combative nature of past competition, there is a growth in business collaboration which can only help a consumer overwhelmed by choice. To deliver customers an “experience” companies work together to supply a combination of products and services that enhance and meet the customer need.
This form of collaboration adds value to each partner’s contribution and leads to a happy consumer.
A small example of this is when I stayed at a hotel recently, by my bedside was a lovely little package of sleep spray and lavender body lotion to promote a good nights’ sleep. This was from a small independent company and the hotel chain had smartly joined forces with them to add a touch of personal care for their guests. Similarly, hotels rather than compete with local spas- invite them to set up shop within the hotel premises. This saves on overheads for the spa company and saves the hotel unnecessary expense in training and maintaining something outside of their hospitality expertise. None of this means that competitiveness does not exist within industry it just has to take a different form as savvy consumers don’t respond well to a dog eat dog mentality anymore.
In the next few posts I will look at ways for business to develop and retain their competitive edge without having to be sharks in their industry.