In September of 1960, J.F. Kennedy engaged Richard Nixon in the first presidential candidates’ debate. Kennedy’s opening statement in that debate has now become the famous “I am not satisfied” speech.
Besides the rhetorical power of that speech in its repetitive use of the phrase “I am not satisfied…”, what is interesting about it is how Kennedy used it to pull the rug out from under what he knew would be Nixon’s strategy for the debate: Red-baiting. While Kennedy did start by describing the communist threat of the Soviet Union and China, the main body of the speech is about the internal failure of America. Kennedy stole what he knew would be Nixon’s main arguement (the communist threat) and turned it to a debate about domestic, social, and government failures.
What Kennedy’s team rightly strategized was that in any competitive environment, political or businesses, sustainable success starts with focusing on your own house. You will not win the race by focusing on the competition.
There are a number of reasons for this.
It’s always too late.
Competing by focusing on the competition is always a ‘trailing’ activity. Your competition moves; you react. This carries the significant risk of always being too late to the dance, and one step behind the music. Further, it breeds a mindset that looks backwards and adjusts to the agenda of others, rather than looking forward and setting your own agenda to make your customers happy.
It is usually inconsistent with your values.
There are three main reasons why any initiative fails: inadequate planning, inadequate time, doing something inconsistent with who you are. In my experience new strategies undertaken by businesses that are not in keeping with their values (which are written down in their mission statement, right?) are inevitably abandoned, or worse, lead to unproductive distractions. And if your competition is dictating strategies, there is a great likelihood you will be reacting from a place outside of your best values.
Your competition is probably wrong.
In fact from a branding perspective, they almost certainly wrong. Your brand is primarily defined by how your customers perceive you, and by the relationship they have with you. From that perspective, making marketing decisions in reaction to a competitor will throw that relationship out of whack. If your competition really were right for your customers, they would be doing business with them. They aren’t, so focus your decision-making on the customer relationships you already have.
Your competitors are a distraction.
Literally. If focus is one of the absolutely key preconditions for success, to the extent your competitors are able to distract you, they are taking your focus from your customers and your own values. By staying focused on the market environment, on what really matters to you, and on the most direct lines with your customers you will keep your competitors reacting to you rather than the other way around. This is exactly what Kennedy did in 1960. He had not heard Nixon’s opening statement yet, but his team had a pretty good idea that the main thrust would be the ‘communist threat’. Kennedy was able to use his superior rhetorical skills and the brilliant strategy of identifying the greatest threat to America’s security as being internal failures which weakened the country’s ability to deal with its enemies. This worked so brilliantly because it spoke directly to Kennedy’s ‘customers’: it touched their own deep vein of dissatisfaction with the status quo, and connected it to the ‘red scare’ of the times, synthesising a message of real power.
How do you ensure you are keeping your focus where it belongs? Here is a quick practical checklist based on my work, that will make sure that you are focusing your energies on taking care of your own house:
- How are you spending your time? While some time should always be spent scanning your external competitive environment (most small businesses don’t take the time they should at this), the majority of your ‘scanning time’ should be spent finding out what your customers love about your business and what more they need from you.
- Size isn’t everything. Just because your competition has added a new space, a new outlet, or a new merger, doesn’t mean it’s the right thing to do for you or for your customers*. Remember that it’s about profitability, not just sales. Smaller, targeted, efficient operations are often more profitable than larger operations drunk on the big sales figures. And when it is time to move or expand, do so because your customers demand it, not because your competition is pushing you. Like your mother always said “If your competition jumped off a bridge, would you do that too??” She said that, didn’t she?
- Are your customers calling the shots? Building your relationship with your customers is more important and more productive than allowing your competition to drag you into a draining battle. Great customer relationships will always be your greatest sustainable competitive advantage. If you know more about your competition than about your customers, then you’ve got your priorities wrong. You’ve also got them wrong if your competition knows more about your customers than you do!
- Focus on financial basics: cash flow, profitability, retained earnings. Be as conservative with your financial strategies as you are extravagant in your customer service strategies. Then when the right time comes to make that competition-killing move of expanding or changing to a stronger location, you will have the financial foundation under you to make that move decisively.
- Does everyone on your team know where the priorities are? Communicate your priorities and values to everyone on your team and employee group. Let them know that when they are making day-to-day decisions about pricing, products, customer service, etc. that they should be very cautious about reacting to what ‘so and so’ is doing down the street. Remind them that if they are not responding to customer demand, they should re-examine their motives for action. Reacting to changes in the environment is very important, but it should not take their focus from your customers.
- Keep your own house in order. Literally. Is your space as attractive to your customers, and as functional for your employees, as it can be? Does your team have the tools to get the job done? Are there any barriers to productivity in your work place? Deal with those before you invest in a fancy new ad campaign just because Acme Inc. down the street did.
As the last year or so has shown, on Wall Street and on Main Street, the most aggressive, competitive, slickest operations fall like a house of cards if they aren’t focused on what really matters: extraordinary relationships with customers, and sound financial, operational, and human resources fundamentals.
“It’s what’s on the inside that matters” is more than just something your grandmother would say when you first commented inappropriately on the phenomenon of physically unattractive people. It is the real foundation of a sustainably competitive business.
* Size isn’t everything. Want real world proof? Check out the rise and fall of the Royal Bank of Scotland, vs. the Royal Bank of Canada. Until the financial sector reboot, there was lots of crying in Canada about “how come Canadian banks can’t be big and exciting and powerful and sexy like all those European and American banks??” I think we have our answer now.