Positioning to win is about gaining an overwhelming advantage, but gaining an advantage around what? Around the value, you deliver to your customers to the extent that no one else can come close to matching the value you deliver. Outcompeting others rests in positioning your organisation so that the customer value it delivers is undefeatable.
Active Knowledge Question:
Do you clearly know how to position your entire organisation, so it is undefeatable?
Last week, I spoke to the five elements that comprise the core of the competitiveness of any business. That core is critical to your business’s strength and is one of the three key areas of the competitive engine in your business. In this article, we shift our attention to the second of these three areas, which is ‘focus’.
Focus reflects your absolute intent. It is your chosen market and expressed by a competitive posture that will enable your business to deliver on its purpose and achieve its vision. It comprises three elements:
- Customer: A focus on your customers requires that they come first in all of your actions and decisions. Your entire business exists to meet their needs today and into the future. They are today and tomorrow’s lifeblood and the compass for future direction. Failing to place them first is to allow yourself to be defeated in your chosen marketplace.
- Capability: While capability will influence how you compete, ultimately it must be tailored, crafted, and built to enable you to outcompete all others in your chosen market.
- Strategy: The competitive strategy of a business is an outcome of its customer focus and the capabilities it has built to deliver more customer value than anyone else in its chosen marketplace. Its strategy is reflected in its competitive posture, which enables it to outcompete everyone else.
Your competitive posture is a reflection of the strategy you have crafted to position your customer value in one of absolute strength. Great athletes develop a style/form of competing that lifts their individual strengths to the forefront, enabling them to win. They don’t seek to win by playing a game the same way as their competitors play. In business, you must craft your unique form, that is your competitive posture.
Positioning is, of course, dynamic and not static and developing the capability to be tactically alive so that you are able to adapt and always maintain a position of strength is important. What is also important is understanding the ‘right character’ of each of these elements. As noted in the earlier article, you may recognise the name of the element but understanding its true nature and being able to influence it is critical.
The Three Elements of Focus
The following three elements are integrated to craft the focus of your business.
1. Customer Focus
Everything orientates itself to customer needs and delivering the greatest value possible for today and tomorrow.
Achieving a customer focus within your business is a lot more than customer service, customer personas or simply saying ‘Our customers come first’. A customer focus reflects the way you think, organise the business, and the basis upon which decisions are made. It reflects the business’s purpose for being.
A customer focus reflects motive and basically says ‘We as a business are here for a purpose’, and that purpose is to meet ‘these stated needs’ in the marketplace. We compete around the value we are able to deliver to the customers who have those needs. If we compete well, profit will follow. Profit is important as it allows us to meet those needs and to invest in the future, but we do not exist just to profiteer.
A customer focus is born out of purpose and is sustained by a motive to compete. The right mantra is ‘better every day’ and supporting this by being better at delivering more customer value.
Do you believe that in today’s markets we compete around the value delivered to customers, as seen through their eyes? If so, then a relentless focus on the customer is a must for your business to remain competitively fit.
It starts with understanding customer value, including:
- What is the customer need that your business is seeking to fulfil?
- What gives rise to that need and how is it best met/satisfied?
- What is evolving/changing in the world that may impact that need?
- What is evolving/changing in the world that may allow you to deliver greater value?
- Where do opportunities exist for you to improve the value you deliver to your customers in meeting their needs?
- Where do opportunities exist for you to expand the scope of needs you presently meet?
This understanding of customer need is not superficial; rather, it is best described as intimate. So close that you know it well, but at the same time, you can step away from it to understand change, impact, evolution, and opportunity.
By this, I don’t mean an opportunity to profit, but one to deliver greater value to more customers through being more competitively fit. And from which more profit will be earned.
This distinction where the customer, and competing to deliver greater value, comes first and from which profit is earned may seem semantics to some — the chicken and egg analogy — but it is actually a vital and distinct approach.
Capability is what is required to deliver customer value. A value that will outcompete all others. A capability that must always be compounding and evolving.
Capabilities cannot be left to chance or at what simply exists today. They must be crafted and developed to fit exactly with how you intend to compete in your chosen market.
Success is not something that just happens overnight. It requires focus, hard work, and perseverance. To succeed on an enduring basis requires a lot more than just being good and following everyone else’s lead in the market.
It requires conditioning, the continual development of the right capabilities and the right mental attitude. In the case of businesses, the right attitude is represented by and reflected in the competitive engine of your business.
Success will come to those who know what they excel at and how to turn their capability into something that will allow them to outcompete all others in their chosen marketplace.
What your business excels at should be the cornerstone of how you have chosen to compete within your marketplace. Remember, we compete today around the value we are able to deliver our customers against their needs.
But need and value are complex. There are many unique positions that you can take within that matrix which allow you to position your offerings, so they outcompete others in your chosen market. Capability is always a reflection of this competitive posture.
The competitive strategy of a business is an outcome of its customer focus and the capabilities it has built to deliver more customer value than anyone else in its chosen marketplace. Its strategy is reflected in its competitive posture, which enables it to outcompete everyone else.
Strategy expresses the relationship between your customer focus and the capabilities that you have built to deliver value against customer needs. It is an outcome of that relationship. It does not exist independently of your customers or your capability and has one intent — to deliver winning value to your chosen market. It is the execution of the purpose for which your business exists.
Your business strategy should not be designed to deliver a profit outcome but rather a customer value outcome, which, if successful, will produce an excellent profit result as one of its benefits.
Strategy is simply how you intend to compete as a business — but there is nothing simple about competing effectively. Your goal should be to develop undefeatable strategies in building a great business, and nothing less should be acceptable.
Effective strategy requires the support of your entire business so that the intended customer value can be delivered.
The Right Position
Your business should exist for a reason, and this should not just be to profiteer.
Your business was likely formed to meet a need in the marketplace that you recognised and believed you could meet better than others in that market. That need is your customer focus and the domain in which your business must excel and lead the market. It is also likely that when you entered the marketplace, you did so with a specific — and possibly unique — value proposition that you believed would outcompete others in the market.
That value proposition represented your competitive posture, being the way you had decided to position your offering in the market so that it represents greater value than others could offer. This unique value proposition would have been built upon a capability, an ability that you possessed or acquired, which allowed you to deliver on what that value proposition promised.
The competitive posture of your business is an outcome of the way you view customer need in your market. There will be a narrative that you will develop that creates this competitive posture. It may go something like this:
- Here is a need in the market that no one is really meeting well.
- It reflects a great opportunity that we should pursue.
- If we are to offer the product/service/value that will win customers, we need to be able to deliver on ABC.
- This means we need to be really good, better than anyone else, at doing XYZ. And we are.
- This is how we are going to do it and how it all comes together.
Your competitive posture is targeted at a specific customer need and built upon your business’s capability to deliver value into that need. This is the focus of your business.
An entirely new level of performance.
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All the best in the success of your business,