Jeffrey Phillips and Alex Verjovsky are the authors of the new book, “OUTMANEUVER: OutThink, Don’t OutSpend” (March 2016). Phillips leads OVO Innovation, an innovation consulting company in Raleigh, NC. Verjovsky is a consultant, an entrepreneur, and a pioneer in the biodiesel market.
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You’ve heard the saying “fighting the last war”? It refers to preparing to compete using familiar techniques, against competitors you’ve faced before, in the same markets or industries, only to discover that the rules have changed. Modern business competition is changing rapidly, and to compete effectively, you need to understand the skills that are required to win.
For the last few decades, most companies have met their competition in a head-to-head, feature-to-feature battle that creates a significant amount of “me too” products with little differentiation other than price. This lack of differentiation leads to commoditization. In these market battles everyone eventually loses, because quality, customer service and margins fall. The feature-to-feature competition is called “attrition,” and it’s adopted from the military, where the goal is to overwhelm and defeat a competitor, regardless of the cost. But attrition relies on size, deep pockets and slowly evolving markets in order to succeed. Increasingly, that’s not the competitive landscape most companies are facing.
Instead, what we see now is a demand for more speed, more agility, more innovation, because the competitive landscape is shifting. This maneuver strategy seeks to win by building competitive insights, taking valuable positions before competitors recognize them, and attacking competitors in areas of recognized weakness. Maneuver seeks to win the most at the least possible cost, understanding that slow and steady no longer wins the race.
Rupert Murdoch said recently that the victory no longer goes to the large over the small, but to the fast over the slow. Large, bureaucratic companies are slow to move and slow to change. They don’t compete based on strategic insight, speed or agility. Instead they hope to slowly wear down their opponents, gradually forcing them over a market or segment after a long struggle. When markets were more stable, when consumers were less demanding, when it was more difficult to enter a market as a new competitor, this strategy made sense. It doesn’t any longer.
Shifting market demands require more speed and agility. Consumers demand new products spawned from innovation. Rather than consider these factors in isolation, maneuver provides a rationale to think strategically about speed, agility and innovation. Thinking isn’t enough, however. You need people who can execute new strategies, who can compete in new ways in order to remain competitive and to grow in the new market realities. What kinds of people are necessary to conduct maneuver strategies and tactics? What skills and capabilities does your organization need to succeed?
While attrition strategy is relative simplistic, maneuver strategy requires more careful planning and execution. Attrition seeks to mimic or copy existing solutions and engage competitors in head to head competition. Maneuver looks for overlooked opportunities, valuable but unoccupied positions, or seeks to attack competitors indirectly. For these reasons, maneuver requires more competitive insight and intelligence gathering, identifying emerging segments and competitor tendencies. Maneuver also requires people who can interpret the intelligence and make rapid decisions. Maneuver requires people who can innovate new solutions for new and existing customers. From these requirements and others we can see that competing with maneuver strategy requires new skills and capabilities, including:
- The ability to move quickly and decisively, using speed in two dimensions: planning speed and execution speed
- The ability to shift course, act nimbly and to demonstrate agility
- The ability to gather and interpret information about customers, markets and competitors
- The ability to move quickly and quietly to valuable new positions, to act in a stealthy manner
- The ability to communicate clearly and accurately as new needs evolve or circumstances change
- The ability to delegate effectively. Agility and speed require delegation.
- The ability to understand new needs and innovate new solutions
These skills and capabilities are what new competitive markets and strategies demand. Does your existing workforce have the skills to compete as markets, competitors and consumers create rapidly changing market conditions? Can you afford to react to markets that are constantly changing, or can you begin to develop the skills necessary to remain competitive?
Maneuver strategy demands a new kind of thinking, but more importantly a new kind of workforce. Already we can see demands for more speed, more agility and more innovation. Approaching these demands as discrete requirements may be helpful, but providing an integrated approach as proposed by maneuver strategy places these demands in context. Speed, agility and innovation provide maneuverability, but only when the critical resources of an organization — its people — are able to perform.
Is your workforce ready to compete in an entirely new way? Does it have the ability to develop and interpret competitive insights and draw conclusions about emerging opportunities? Can it move quickly and decisively to new conclusions? Does it have the ability to change direction quickly? Does your workforce communicate effectively and clearly, in order to delegate responsibility quickly and effectively? Does your workforce have the capability to innovate consistently? If not, you may find your market share and profits eroding, and face dramatic disruption.