Could you have a more successful business by NOT competing?
Last week I offered some life advice: don’t compare, don’t compete. The key points were these: that you will have a richer life if you focus on yourself, not others; that you will actually thrive more by comparing yourself against your earlier selves rather than outsiders; and you will be released from the daily angst and tension of winning and losing against others.
Can this advice translate to the world of business, though? Isn’t competition the lifeblood of the marketplace? If we are all out to capture the same customer and the same wallet, must we not be in the game to outdo one another? Isn’t it really winner-takes-all out there?
Let me put this controversial view to you today. No, the best businesses do not actually succeed by competing. They don’t mimic, they don’t benchmark, they don’t use market share as a leading indicator.
Let’s first look at what might be wrong with a competition mindset. When we benchmark against the rest and try to be little better in quality, a tad faster in service, or marginally cheaper, what are we doing? We are on a reactionary path. We don’t set our own course; we just keep an eye on competitors, and keep responding to what they’re doing. You might gain some short-term wins this way, but in the long run you will find a serious problem: you won’t have any distinctive identity in the market.
What’s the alternative? Simply, to aim to be better this year than you were last year. What does this inward focus achieve? Two biggies. One, it trains your attention on winning against yourself, not against outsiders—and that leads to more sustainable advancement. Two, it paves the way for true innovation to occur. Instead of playing the mediocre game of incremental adjustments against competitors, you are free to look for bolder strides—new market spaces, or game-changing offerings.
The true win is that when you look away from competitors, you can train your gaze on customers. Instead of spending all your time and energy trying to analyze, imitate, or outdo competitors, you could be focused on your customers: understanding them better; building deeper relationships with them; innovating to meet their needs; improving your internal processes to serve them better. Weirdly, you might create better value for your customers by not trying to compete for them!
Some of the world’s most renowned competitors do it this way. They don’t try to be better than the pack; they try to be different from it. The likes of Apple, Tesla, Patagonia, and Amazon did not study their competitors and try to make their offerings a little more compelling; they set out to mesmerise their customers with all-new ways of mattering in their lives. Closer to home, Safaricom, in introducing M-PESA, was not trying to be like banks, and it wasn’t even trying to be like any known telco in the world. It was forging ahead alone, without comparators, to create a whole new type of offering.
Our real work in business is not to gain a few share points against competitors; it is to solve problems and create ease in the lives of our customers. When we do that well, we assume the position against our competitors that we deserve.
In my recent book Up & Ahead, I ask: what’s your time horizon? If it’s just a few years, then you are going to find yourself trapped in a very short-term game of competitive strategy—gaining and conceding, advancing and retreating, moving up and down the market-share tables. On the other hand, you could be playing what Simon Sinek calls an infinite game—that of staying useful and relevant to your customers in perpetuity.
A finite game is obsessed with taking share off competitors, of hitting stretch targets for a few quarters, of clocking big personal bonuses. The infinite game requires you to aim to be around for generations by staying useful and valuable to customers, as times change and needs evolve.
Which game is your business in? What is your regular talk and focus, in board meetings and c-suites? Is it about using fear and greed to drive a frenzy to suck more value out of customers, by up-selling, cross-selling, out-selling? Or is it a calmer, more studied approach that says let’s deserve to stay in the market, through the strength of our offerings?
How would you focus on getting your own business better by reflection rather than comparison? Your conversations and measures would be about things like the following: improving the customer experience; boosting product quality; enriching internal talent density and work environment; helping employees to enjoy their work; tracking the lives of customers to see where their pain-points lie and where their hopes dance.
In business, unlike in most sports, we are not usually in a time-bound win-lose game against opponents. There can be many winners. We can all advance by building our own strategic identity, and doing what we do in distinctive, special ways. But you need patience for that, and wisdom. Until those traits appear in your leadership, you are probably condemned to playing the short and ugly game.
(Sunday Nation, 8 October 2023)