Another Good One from BusinessWeek
Wednesday, September 20, 2006
If you haven't already, check out the recent series of articles in BusinessWeek about competitive advantage. The series ties so nicely into the painful experience many of the golden-child corporations are feeling right now. The giants are falling hard and struggling to maintain their market share in the face of competitor chameleons who are agile and continue reshape and redefine their approaches.
How To Hit A Moving Target: These days all competitive advantages are fleeting. So the smartest companies are learning to create new ones-again and again and again. http://www.businessweek.com/magazine/content/06_34/b3998423.htm. Short and to the point, this article makes clear recommendations. It also points to customers as an anchor of competitive advantage. While I agree that customers are the solution, I want to add a point that wasn't really explored in the article--good ideas, game-changing ideas, new thinking that solves old problems.
Question: do you know how your company comes up with good ideas and ways of strengthening its competitive position? Is it always the same product group or cluster of innovators? One engineer or business manager who can be counted on for leadership? Is it one of your customers or a group of partners?
In addition to the six or so areas the author points out as drivers of competitive advantage, there is one that is not as apparent. Innovation is a strong differentiator. Innovative ways to touch customers, innovative processes that increase profit and share of requirements or share of wallet, innovation in branding, innovation in offerings and packaging, etc.
Competitive advantage can be sustained through a constantly-evolving process of innovation. The Innovation Process is how a company identifies, tests and incubates an idea, takes it to market, and uses that idea to fuel some kind of advantage However, two challenges emerge. First, most companies don't understand and harness innovation. Second, many that do understand the process of innovation play the same record over and over and over again. It too becomes predictable and not something that enables sustained differentiation.
Whether you realize it or not, your company has an innovation process of its own, which is the way things are always done. Because the end-to-end process, like products, can get overused, worn and dull, you might want to change it. In a channel perception audit (where we understand how a company's channel partners perceive the company and gather behavioral information around preference and willingness to refer) we conducted a few years ago, we uncovered several powerful ideas that were served up by the strategic and delivery partners of a major organization. Great food for thought, but how many companies are actually tapping into innovation across the value chain.
There are so many options...
Ever considered a customer survey or insight effort designed to do nothing more than jazz your customer base and have them give you their best thinking? Ever considered partnering with a much smaller or significantly larger company to get a new perspective? How often do you ask your front-line employees to submit their ideas? We know one organization that makes it part of the employee review process... We work with others that have built REAL customer innovation awards.
If you're in the product development arm of the company or running a line of business, this process and the results are assets. The return on those assets are realized when your sales people and marketers can point to an equally compelling unique value proposition or higher-order benefit that is different from what it was three or five or ten years ago.
The Sum Up:
- Know and understand the innovative process. Ask the question-how effective is it?
- Ensure that customers and other key players are essential to that process.
- Experiment with the process-turn it around.
So, now what? It really is about execution.
I will reuse one of our favorite quotes from Wells Fargo (WFC) CEO Richard Kovacevich: "I could leave our strategic plan on a plane, and it wouldn't make any difference. No one could execute it. Our success has nothing to do with planning. It has to do with execution."
Promise Phelon, CEO firstname.lastname@example.org