“First they ignore you, then they laugh at you, then they fight you, then you win.” Mohandas Gandhi
I am always looking for new information and ideas to spur innovative thinking to develop powerful growth strategies. One of my new favorite authors is Kaihan Krippendorff. I had the opportunity to hear him speak recently and share the concepts of his new book Outthink the Competition. One thing I like about Kaihan’s work is that it is based on research, much like the work of Jim Collins.
He also draws on a lot of military strategy, particularly Chinese strategy and the writings of Sun Tzu and Lao Tzu.
To develop Winning Moves that have the potential to double your revenue in three to five years, you need to come up with powerful strategies. Benchmarking is fine, and trying to grow organically by increasing market share will get you so far, but to leap frog the competition, you need to develop new strategies that others have not thought of.
Kaihan tells us that there are four challenges to consider to outthink the competition:
1. You must recognize where rigidity has taken hold.
We all know that change is difficult for people, but we need to create an environment where it is okay to take risks and fail as long as we learn from our failures. It is only through these efforts that we can truly create something new.
2. You must then find a new strategic option (a fourth option) that others ignore.
Question what others accept or have tried and failed at and apply the pattern or learning to your situation to generate new alternatives. Look at other industries for patterns that may work in your sandbox.
3. You must figure out whether this new strategy is superior.
Test the new strategy and look for adopters. We encourage clients to validate their assumptions, ask the right questions, collect and use hard data, and learn from the insights to perfect the winning move or move on to the next strategy.
4. You must slow your competitors’ ability to copy your innovation.
Some companies do this with patents. Others adopt strategies that their competition are not interested in, and by the time they pay attention, too much momentum has developed to catch up. I have always been a believer that companies should achieve 20-30% of their sales from products or services that did not exist five years earlier.
Over the past decade, companies primarily built their strategies around achieving customer captivity, securing preferential access to resources, building economies of scale and adopting best practices. These are fading into the background as technological advances have leveled the playing field and small companies have the agility to meet customer demands better than large ones in many instances.
One of the things that came out of Kaihan’s research is that the winning companies studied used five common narratives:
1. Move early to the next battle ground.
You may have heard Wayne Gretzky say that he skated to where the puck is going to be and that was the secret to his success. You need to be looking for the next strategy, opportunity, product or service that your customer needs and wants. Do this while your current products and services are still relevant to keep your competition from catching up. Many companies, like Apple, obsolete their own products before competitors have an opportunity to copy them.
2. Coordinate the uncoordinated.
Using technology, you can build great companies and strategies today by relying on others’ expertise while leveraging your core competencies to deliver a more robust solution to the market. You can apply the principle of demand/vertical integration to provide your customers a more complete solution they cannot get elsewhere. Find ways to offer a complete solution so your customers do not need to look elsewhere to buy.
3. Force two-front battles.
Use your expertise, business model or core competencies to enter new industries. Autodesk, one of the premier CAD software developers did this when they entered the world of video animation. This forces your competitor to launch an attack on your second effort, while leaving your existing business efforts to advance unchallenged. Find ways to use your expertise to enter new markets.
4. Be good.
This strategy is about serving all stakeholders: shareholders, customers, employees, the community, country, environment and the world. Companies that take this approach evoke mirror neurons in customers that help them to identify with the company and feel positive about buying from them. Successful companies compete on more than shareholder return today by taking a more responsible approach to serving stakeholders. An example would be adopting green practices and having greater concern for the environment.
5. Create something out of nothing.
Using Apple as an example again, this is a company that has created something out of nothing. They do not actually develop many new technologies, but instead, coordinate existing technologies into a high quality, beautifully designed, elegant solutions that customers cannot refuse. MP3 players and tablet computers were on the market long before the iPod or iPad but were not nearly as successful. The introduction of iTunes, Apple iOS and hardware that worked seamlessly changed everything. Look for opportunities to coordinate existing technology and services with your own capabilities.
Most of these may look familiar as they are adopted from the 36 Chinese Stratagems. Kaihan also wrote a book titled The Art of the Advantage that translates these ancient strategies into business strategies.
So as you prepare for your annual planning session, consider using the strategies above to help you think outside the box and find the fourth option. Good luck and plan well.