How current is your basis for competition?

In A Connecticut Yankee in King Arthur’s Court, Mark Twain wrote, “The best swordsman in the world doesn’t need to fear the second best swordsman in the world; no, the person for him to be afraid of is some ignorant antagonist who has never had a sword in his hand before; he doesn’t do the thing he ought to do, and so the expert isn’t prepared for him; he does the thing he ought not to do; and it often catches the expert out and ends him on the spot.”

I don’t want you to be obsessed with your competition. However, I do want you to be mindful about your “basis for competition” because that has to do with your understanding (and action) about new ways to meet customer needs or new ways of addressing changes in their needs.

To grow your business you must be able to challenge conventional thinking. Conventional thinking will lead you to “more of the same.” Conventional thinking will lead you to “average” and average means that 50% are ahead of you! A great place to start is by questioning your basis for competition. On what do you compete? Why do people buy from you? What value do you create for them? How do they define value? Is there a better way, an unconventional way?

The big idea is to arrive at the future early (first would be better!). To do that you have to think, think deeply, about trends and forces that are shaping your industry and marketplace. What pressures and opportunities are your customers feeling and seeing? Can you redeploy your resources in a new and different way that creates value for your customers? Or, perhaps new and different customers? How is the value creation chain for your marketplace of customers rearranging itself? What problems are they struggling with that you can help them solve?

Look at what has happened in industries other than your own for new thinking models. As author William Gibson has said, “The future is already here – it’s just unevenly distributed.” Let’s take a quick look at the music industry. In the early 21st century, consumers spent less money on recorded music that they had in the 1990’s, in all formats. Total revenues for CD’s, vinyl, cassettes and digital downloads in the world dropped 25% from $38.6 billion in 1999 to $27.5 billion in 2008 according to IFPI. If we were inclined to look at the music industry what would we have see happening?

Large-scale layoffs
Large retailers driven out of business (Tower Records)
Record companies, record producers, studios, recording engineers, and musicians, all seeking new business models
Music-only stores ceased to be “players” in the industry (Wal-Mart and Best Buy retail more music than the music-only stores)
Recording artists who now rely on live music and merchandise for the majority of their income
Mobility and convenience again trumped audiophile-like sound quality for the mass market. “Good enough” really is, if you can get it now and take it with you easily.
Inexpensive recording hardware and software made it possible to record acceptable quality music in a spare bedroom or basement and distribute it worldwide on the Internet

Stop. Answer this: how would conventional thinking help in this scenario?

The basis of competition changed in the music business. These changes have given music lovers almost instant access to a broader variety of music than they ever imagined possible, and at prices that are amazingly low (and will likely go lower over time). Enter the “antagonist who has never had a sword in his hand before” who thinks differently, Apple (iPod, iTunes, iPhone, iPad, AppleTV, GarageBand, Logic Studio, Logic Express). We should note that consumer spending on music-related software and hardware has increased dramatically over the past decade.

If you’re the “best swordsman” in your industry or marketplace, God bless you. By the way, how current is your basis for competition?

In Other Words…

“The future arrives too soon and in the wrong order.” – Alvin Toffler

“The world is full of obvious things which nobody by any chance ever observes.” – Sir Arthur Conan Doyle

“Your beliefs are cause maps that you impose on the world, after which you ‘see’ what you have already imposed.” – Karl Weick

“The ability to perceive or think differently is more important than the knowledge gained.” – David Bohm

“The future has a way of arriving unannounced.” – George Will

“It does not do you good to leave a dragon out of your calculations, if you live near him.” – J.R.R. Tolkien

In The Word…

Know also that wisdom is like honey for you: If you find it, there is a future hope for you, and your hope will not be cut off. – Proverbs 24:14

How current is your basis for competition?