Strengthen the customer base
Sun Tzu in the 6th century said that you may survive though defence but you can only win by attacking. One of the strangest paradoxes of the business world is how many business owners dont see their own situation as being competitive. This is absurd as competition in so many forms is ever present and can never be ignored.
The first line of attack should be to strengthen the customer base. Customers need to be given stronger reasons to buy products than ever before so investing in innovation, marketing and differentiation is essential. Companies need to know what their customers want and even more about what their competitors are offering. Competitors of all kinds are the minimum benchmark for which to aim. But equalling the value of competitive offerings is rarely going to suffice, businesses need to ensure they are moving constantly to stay ahead of competitors and never stand still.
Unshackle the leadership
Strong leadership is needed too to re-engage staff and move the business forward. The recession has unfortunately highlighted many examples of poor leadership as many senior executives struggled to cope with the new Challenges they faced. In fact, a recent study from the Kenexa Research Institute stated that just 47% of UK employees rating their senior leadership team as effective.
In terms of leadership effectiveness, the UK was in fact ranked below India, Brazil, China and the United States. Improving leadership skills is becoming a major concern and a top priority for many UK businesses this year. According to Henley Business Schools Corporate Learning Priorities Survey 2010, which questioned 2,500 HR and Learning and Development practitioners, developing the leadership skills of middle managers is the number one priority for 67% and 35% said that leadership development was a priority for their senior leaders.
But companies can improve leadership immediately. Some of the most important ways are for leaders to create a compelling vision that employees buy into and communicate that vision regularly. They also need to make big decisions, take risks and be prepared to adapt quickly to change and jump on new marketing opportunities. Unfortunately, this kind of leadership is too often stifled in UK companies, with bold decision makers sidelined. To succeed, leaders need to stick their heads above the parapet and demonstrate their vision and confidence in the future. Those that do will find they have the support of a motivated and energised workforce behind them ensuring they will be more likely to achieve their goals. Speed is off essence. Leaders need to cut down the meetings and excess consensus and just get on with it.
Tips for being more competitive
- Firstly, know what your customers want and know even more about what your competitors are offering and how they behave.
- Continue to develop your products and services. Never stand still. Even those lucky enough to have patent or intellectual property protection must seek to acquire more advantages. If in any doubt about this then compare the fortunes of General Motors to Toyota.
- Make the customer the central focus for the business. The customer with their money is central to business success; so do not rush to copy competitors ways of caring for customers (e.g. automated telephone services). Develop new ways to engage with customers in a way that to customers want. They will repay you over and over. This is how Virgin Atlantic took so much business away from the likes of British Airways.
- Make every customer your friend and endorser. The cheapest marketing is done by customers. If they love your product and service enough then they will build your reputation for you at the expense of your competitors. If they love your competitor but your products and services are better then get people to trial you. This is the road to customer conquests.
- Assume that competitors will always develop new products or services or ways of doing business. Just as you should be trying to outsmart your competition at every turn, assume at all times that the competition is trying to do the same. So complacency is the big bad C word here.
- Assume that competitors will steal your ideas so be willing to steal theirs where appropriate. It is a good idea to copy business best practice. Sometimes copying is the best route. However, dont just copy it; look at ways to improve it. Look at how the Japanese destroyed the UK motor cycle industry.
- Assume that your business could be killed off by new entrants to the market or new innovations - people or technology based. This is all about the unthinkable. Be prepared for competitors arriving with disruptive innovations. When they arrive you will have to move very quickly and decisively. Consider how MP3 has affected CD sales and do you remember cassette tapes?
- Look forward, not back. By all means look at your competitors but look to the future to bring your own disruptive innovations and competitive advantages.
In the end, competitiveness is a state of mind. Acquire it if you have not done so already. It will be the hanger for your raincoat.