There’s a difference between staying competitive and reacting to competition. The latter is the classic, monkey see, monkey do. A CEO or Senior Leadership Team sees or hears of something their competitor is doing and then decides they too want to do that.
Perhaps the most classic case of “reacting” is the Cola Wars that started in the 1980s between rivals, Coca-Cola and PepsiCo. Over the years they’ve engaged in numerous advertising campaigns and product releases in constant reaction and response to the other. Whatever one of the brands did, the other soon followed. A more recent example of an organization “reacting” was Facebook’s acquisition of Instagram. Snapchat’s story feature attracted the younger generation and mainstream media. Facebook wanted to do what Snapchat was doing, but didn’t have the technology. So what did Facebook do? They bought Instagram and launched their own Stories.And just last week the competition between Boeing and Airbus came to a head, when all Boeing 737 Max’s were grounded. With investigations still underway, one thing is clear: Airbus announced the release of its A32neos jet to the market, which provoked Boeing to release the 737 sooner than they originally planned. Because Boeing reacted and didn’t stay true to their course, they suffered the consequences.
These examples illustrate what it looks like to “react” to competition. Oftentimes, these reactions are made without considering whether the organization is even capable of doing that which it is trying to copy. Despite that, you see this reacting and emulating everywhere. And if you constantly become provoked by competition and react, it’s likely you do not have a clear strategy yourself. If you’re a leader in an organization that behaves like this, it is guaranteed to drain resources, lower engagement (customer and employee), and affect productivity over the long run.
A strategy guides an organization. It’s the company’s north star. It defines how an organization will do what it has set out to achieve. But most importantly a strategy is used to define and then design the organizational resources (people, technology, processes, etc.) that are required to achieve goals. Therefore, having a clear strategy helps to effectively use resources and capabilities, increase employee engagement, and increase long term productivity.
So here are some ideas to get you started. Rather than monkey see, monkey do, you want to articulate a good strategy with a View of the World and a View of the Organization.
View of the World
Having a good understanding of the external environment and industry you compete in, including a look at your competition, gives you a whole lot more data for making choices; this is important as you begin to define your strategy. So, while you don’t want to constantly react to your competitors, it is important to have an idea of the competitive landscape and the market in which you operate. And having this knowledge and awareness prevents reactions and promotes strategic decision-making in the organization. It will help you say no, so that you’re not distracted by the next shiny new object.
To become more aware of your external environment, answer these questions:
- What’s going on in the market/Industry?
- What are the current trends?
- Who are your competitors (current, emerging, potential)?
- Who are the disruptors?
- Who is your target customer?
View of the Organization
Equally important to knowing the external environment is knowing your own organization. When we help clients write their strategy we ask them to take a look under the hood to see what their organization is capable of (and not capable of) and what capabilities they would need to build (hire, grow) in order to achieve their strategy. This is important so that you know what you have and then you can start to assemble and design the organization in a way that will support the execution of your strategy. For example if your organization is designed to make software, and suddenly your CEO wants to introduce a hardware product into the market, do you even have the existing capabilities (engineers, supply chain, go to market) to do that? Having this knowledge helps answer those sorts of questions.
To become more aware of your internal capabilities, answer these questions:
- Based on your strategy, what are the most critical organizational capabilities to leverage, which ones need improvements, and which ones may be missing as you move forward?
- What distinguishes you from competitors?
- Where could you spend $1 on your organization and get $10 back?
- Where do things slow down or get bogged down in your organization?
- Are the capabilities you have today scalable? Agile?
There are several ways to collect this data. The simplest way would be to deploy a survey. The limitations to this method could be data integrity. Perhaps it requires more time commitment, but you would certainly get better quality data through interviewing key stakeholders in your company. Unlike a survey the interview allows you to ask follow-up questions. Another source for gathering information is a consultant who often uses quantitative and qualitative data collection methods.
Regardless of which data collection method you choose, having a strong View of the World and a strong View of the Organization puts you in a better position to stay true to your own strategy and not be provoked by the other monkey’s next moves.