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A golden rule: look at your rivals’ weaknesses, not their strengths

Mar 28, 2011 Business Daily, Strategy

“The single most common competitive mistake investors, CEOs, and entrepreneurs alike make is this: striving to do slightly better what their fiercest rival already does incredibly well.
The result is usually a muddled, incoherent mess of a strategy — one that fuels not disruptive, explosive differences between a firm and its rivals, but their very opposite: bland, boring similarities.
Most companies are competitively challenged — and the Golden Rule of Strategy is how I triage them.
It says: “What your fiercest rival does badly, do incredibly well.””

UMAIR HAQUE, Harvard Business Review (24 April 2010)

Umair Haque gives us an interesting take on benchmarking in the excerpt shown. Instead of focusing on what your competitors do very well, focus on what they do very badly.

The reasoning is straightforward. If your key competitors are already very, very good at something, you will play a loser’s game trying to catch up with them. First, the thing you try to copy will not be ‘your own’ – so you will be playing by someone else’s rules. Second, by the time you do catch up, your competitor will in all likelihood have raised the bar even further.

Haque gives the example of Apple. This company has taken an unquestionable lead in high-end computers, phones, tablets, and music and ‘app’ retailing. Most of its competitors are busy falling into the catch-up trap: mimicking features and style. As Haque puts it: “They’re churning out Apple look-alikes and feel-alikes, trying to beat Apple at its own game — simple, usable, beautiful design — instead of changing the game.”

What all the competitors should be doing instead is playing on Apple’s weaknesses: closed, proprietary systems; arrogance around service; a superiority complex that may soon cause complacency.

What this tells us is that as strategists we should be examining industries and competitors very carefully to see what they do that MOST annoys customers, or causes cracks in the business ecosystem. Are you trying to take on an industry leader, for example? The chances are, you will never match the giant on scale effects, distribution reach, or spending power. Don’t even go there. But what do most industry leaders do very badly? They often take customers entirely for granted; they usually mistreat suppliers and subject them to draconian terms; they are frequently arrogant with stakeholders like the media, government and society at large; they are generally poor at innovation and creative solutions.

Those areas suggest where the weak underbelly is, and where an insurgent should be focusing the competitive attack. Every industry, and every company no matter how successful, does some things very badly and annoys the hell out of people who deal with it. Your task is to isolate those things and find creative ways of being different.

Consider banks and their interminable queues and inability to offer warm, attentive service; big shops with their clueless attendants and indifference to customers; consultants and their adherence to boilerplate, rigid methodologies; doctors and their lamentable queue management; hospitals and their inhospitable environments for recovering in; restaurants and their inconsistent food quality; ICT firms and their apparently genetic inability to describe things in plain English.

Are all these firms not telling you, plainly and simply, what you need to do to win customers away from them?

Haque points out that “…the essence of strategy is discovering meaningful differences that make a firm inimitable, singular, and unique. Strategy’s cornerstone, that is how to build a disruptively different business.”

In other words, there is nothing to gained by being a faded photocopy of someone else; there is everything to play for in being the most vivid, most emphatic, most renowned practitioner of something unique. Let your competitors benchmark your strengths; you play on their glaring weaknesses.

So your primary benchmarking question is: “What do these people do awfully badly?”

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