29 April 2019
You Can Go Your Own Way /
As Judy Garland would tell you, following everything your competitors do is a terrible way to get ahead
My favourite Steve Jobs anecdote is the one where he outlines how he came up with the idea for the iPhone. ‘I told my team to copy whatever all the other handset manufacturers were doing and then add in the “Apple magic” of making our phone’s battery life about 50% worse. And whadda ya know? Ka-ching!’
Of course, we all know that Apple didn’t invent the iPhone by copying others – quite the opposite. According to Jobs, ‘We would sit around talking about how much we hated our phones.’ Ignoring the output of others, the company set about making a phone that Jobs and his team would want to use.
The moral of the story (not the apocryphal anecdote) is this: taking all your cues from competitors may be a great way to keep up, but it’s a lousy way to get ahead.
However, all too common is a conflicting mindset. At an abstract level, people recognise the importance of taking inspiration from outside their industry. But when it comes down to practicalities, there’s a pervasive attitude of ‘Yes, but that kind of thinking wouldn’t work at our company.’
The lesson is clear. Having an awareness of what your competitors are up to is healthy. Slavishly looking to them for direction is not
Alex Jenkins, Contagious
Maybe more fundamentally, there’s a conflation of strategy process with execution. Any good strategy has to start with a diagnosis of the situation – a clear understanding of what is going on, allowing for the development of a guiding policy and a series of coherent actions to tackle that situation. And it would be negligent not to consider competitor activity when assessing a situation. However, don’t be tempted to think that, just because you’ve spent weeks examining what the competition is up to, what you now have is a blueprint for how you should behave. You don’t.
That is not only the path to mediocrity but possibly failure. Assuming that existing success is an indicator of future success is flawed logic, as Nokia will no doubt tell you.
The grass is always safer
So why do so many people prefer to look over the fence to copy what their neighbours are up to? Fear, no doubt, plays its part. It takes a level of bravery many people aren’t comfortable with to risk the company’s money on the unproven and the novel.
But ‘unproven in our industry’ is not the same as ‘totally unproven’. In Contagious 45 we wrote about how UK retailer Harvey Nichols increased the sense of luxury in its new store not by following design ideas already implemented by other retailers, but by looking at five-star hotels. Similarly, it deliberately chose to ignore precedents set by its competitors when creating its loyalty programme, instead taking inspiration from an airline.
Companies that limit the scope of their vision to their own sector can blinker themselves to potential opportunities and perpetuate a mindset of ‘this is what we are’ rather than ‘this is what we could be’. The author Henry David Thoreau observed: ‘Many an object is not seen, though it falls within the range of our visual ray, because it does not come within the range of our intellectual ray, i.e. we are not looking for it. So, in the largest sense, we find only the world we are looking for.’
If you only go looking for the world you know, the chance of spotting a threat from external disruptors is slim, even when recent history shows this to be one of the most urgent challenges facing established brands.
Similarly, you may see innovation happening in other sectors, but if you believe those sectors have no value for your company, the innovation potential will fade into background noise.
For Domino’s, the breakthrough moment came when it decided to stop being a pizza company that sold online, and start being an ecommerce company that sold pizza. Dennis Maloney, the brand’s VP and chief digital officer, related at our 2015 Most Contagious event how:
‘If we were going to be an ecommerce company, we needed to be able to use data the way an ecommerce company uses data. We needed to be able to prototype the way an ecommerce company prototypes. We needed to stop benchmarking ourselves within the pizza industry. We needed to start benchmarking our results to technology companies.’
It's an approach that seems to be working, considering that Domino's last week announced 101 consecutive quarters of international same store sales growth and 32 consecutive quarters of U.S. same store sales growth.
The lesson is clear. Having an awareness of what your competitors are up to is healthy. Slavishly looking to them for direction is not. Those who find themselves falling into the latter camp would do well to take a little career advice from Judy Garland: ‘Be a first-rate version of yourself, not a second-rate version of someone else.’
This is an edited version of a piece that appeared in the Q1 2016 issue of Contagious magazine