Friday, June 19, 2009

Strengthen your business by knowing your competition

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Imagine for a moment that you are going skiing. You put on your equipment. You make sure you’re prepared for the weather conditions. You get up there at the top of that black diamond slope and before you race down the slope you carefully put on your blindfold.

Well, maybe not. Even James Bond, whose movies routinely feature some pretty outrageous ski stunts, never tried skiing blindfolded. When you’re trying to dodge obstacles and avoid being shot by enemy agents, the last thing you want to do is not be able to see where you are going.

Despite that, many businesses choose the blindfold.

To be fair, a business is not skiing down a slope, dodging trees and being shot at. It is, however, facing the moral equivalent: challenging economic times and plenty of competition looking for any misstep. The key to surviving a high-speed encounter with a tree is to not have one. By the same token, the key to surviving the challenge of finding yourself without a product that people want to buy is to not get to that point. The key to defeating your competition is to constantly study them, until you understand their best strategies almost before they do.

You can’t do that if you are wearing a blindfold.

A business blindfolds itself when the executive team starts viewing criticism of their product or of how the business is operating as personal criticism of them. A business blindfolds itself when senior management declares that they are always functioning at the pinnacle of effectiveness, and any problems in the company are the fault of the employees. A business blindfolds itself when it blames the customers for problems with the product. A business blindfolds itself when the board of directors declares that it is always inappropriate to criticize or question their performance.

In each of these cases, the business is cutting itself off from its most powerful weapon: information. Specifically, information about what is really going on in the market and the organization that would allow the business to anticipate problems before they arise and uncover opportunities ahead of the competition.

Why would a business voluntarily blindfold itself? Looked at objectively, there’s really nothing to gain. Despite that, the examples are legion: Digital Equipment Corp., Tandy, Lehmann Brothers, the rest of the financial industry, the Big Three automakers, and so forth. In each case, refusing to actually look and see what was going on around them cost these companies dearly. Many did not survive.

When feeling threatened, the natural instinct is to focus on the danger. This can work when you are a hunter and the danger is a lion. There, the threat is contained in place and in time. When running a business, however, that’s not the case. The more you have, the more you have to lose. As a result, the threat feels more diffuse, pervasive and, often, uncontrollable. Consider the economy. The natural response is to focus on how much there is to lose, and to tune out the barrage of frightening information. However, just because a response is natural, doesn’t mean it is appropriate.

As jujitsu practitioners learn, the natural response to being thrown will get you injured. It’s the trained response that keeps you safe. In this case, the trained response is to voraciously gather information, reframe it and constantly seek creative, innovative solutions. Although no business can control the economy, they can control how they respond to it. Tom Watson, president of IBM Corp., reframed the Great Depression as an opportunity to prepare for better days while everyone else was panicking.

Of course, one major difficulty is distinguishing the valid criticism and feedback from the nattering nabobs of negativism. It’s critical to have well-defined metrics to tell if you if you’re on track to success or failure, and to constantly revise those metrics as you progress. Only then can you distinguish between valid feedback and noise.

Whether you’re managing a team or running a company, if you find yourself shooting the messenger who criticizes you, blaming your employees or customers for corporate problems, or making decisions based on the advice of those in the room without stopping to find out where their information came from, it’s time to pause and take a hard look around.

Otherwise, you may find yourself skiing blind.

Stephen Balzac, president of 7 Steps Ahead (www.7stepsahead.com), based in Stow, is a consultant and professional speaker. He is. He can be reached at 978-298-5189 or steve@7stepsahead.com.