Sunday, May 15, 2016

Are We Too Obsessed With Competitors?

“The greater danger for most of us lies not in setting our aim too high and falling short; but in setting our aim too low and achieving our mark.” - Michelangelo

It is common for businesses to direct a fairly significant level of effort toward understanding the competition.  Collecting information on costs, market share, new products, and a host of other areas often drives business planning and improvement initiatives to keep a company from losing ground to others.

For a number of reasons, though, I believe we go overboard and expend far too much energy worrying about competitors.  Considering the amount of money and time spent on researching the competition, one has to wonder how much better it would be for an organization if this energy were directed toward more important areas of the business.


What I used to accept as a normal business activity, I started to question as I saw little benefit – and sometimes negative effects – from the effort.  Some of the reasons for this include the following:
  • Leaders Don’t Follow
    Looking to competitors to focus your efforts can guarantee that you will always be a follower.  Creating a culture of continuous improvement and innovation are what makes an organization successful – looking to others for ideas does not.  This in addition to the fact that a strategy of following is not highly energizing or motivating for team members.
  • Many Competitors Are Mediocre
    A number of industries are plagued with mediocrity, and focusing on competitors who are mediocre will result in little benefit.  Leading a pack of poor or mediocre companies is not something with which to be proud.
  • You’re Not in Business for CompetitorsFocusing on competitors takes resources away from a company’s most important group of stakeholders – its customers.  Companies like Marriott, Apple, Google, and Toyota have shown repeatedly that focusing on customers generates far greater returns than focusing on competitors.  A company exists to serve one or more needs, and success comes from focusing on those who have the need.
  • It Puts Blinders on ImprovementBringing performance to continually higher levels cannot happen by looking at what others are doing.  Looking at the performance of industry leaders can limit what people think is possible.  Targets are set at what others have done rather than at true breakthrough levels.  As a result, “safe” targets are set and creativity is crushed.


Many years ago, I worked for an instrument manufacturer in a highly competitive industry that, because of lagging sales, decided to redesign its flagship product.  What was once the most accurate instrument of its type had fallen behind other producers, and we wanted to regain the lead.

It was a fairly significant effort, but we succeeded in improving the accuracy enough to once again be the best.  After announcing the new product, we even became concerned after hearing rumors that a competitor had initiated a redesign of its own product to provide an even higher level of accuracy. 

Although we were proud of our accomplishment, sales were disappointing.  As part of an effort to address the sluggish sales levels, we began to visit our customers.  Our product was used by customers to calibrate their products during production.  We quickly found out that, rather than increased accuracy, what they really wanted was the ability to perform quick changeovers from one product to another within their own process.  In contrast, in order to provide higher accuracy, our product required longer stabilization times, meaning that it provided the exact opposite of what our customers really wanted.  We wasted a significant amount of time worrying about what our competitors were doing when we should have been worrying about what our customers were doing.


When suggesting that a company should stop worrying about competitors, I am often met with blank stares or comments that I don’t understand the business.  Like anything, though, the effort put into studying competitors should be questioned as to the value it provides.  People should be clear about the results they expect from the process and follow up with understanding what was actually achieved.  If results were not as expected, something related to the effort needs change or the effort needs to be stopped completely.

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