Competing in the digital marketplace

I know a lot of business owners and senior executives at companies that vary in size and industry. As I think about each of them, I can’t think of one that isn’t competitive in nature. That is, they want to win. They are driven to compete and build organizations that are competitive so that they can win. They know that if their organization isn’t actively competing to be the best in their market, they won’t be the best. They can’t be the best. So, they compete. Choosing not to compete is akin to choosing to lose.

To be competitive in anything, you need to produce an advantage - something you have and can use to be better than your rivals. In baseball, this could be a pitcher’s fastball or control (or both). In golf it could be the distance you can drive a ball. In business, it could be how you control costs to increase profit margins that can be reinvested in the business. These are all simple examples of what I call competitive capabilities.

Competitive capabilities are used to produce competitive advantages. Competitive advantages are used to win.

For the last two weeks we have examined the type of help you need to be competitive in this marketplace. If you haven’t read these blog posts, you can get caught up here and here.

An organization isn’t just people.

An organization is comprised of people, the practices they perform and the tools that enable those practices. When we are discussing business organizations, people are definitely a component, as is their level of skill and the knowledge that enables those skills. But what about the tools they use? Shouldn’t every business owner and executive that is using their organization to compete be concerned with the tools their people have to do their jobs and produce the outcomes the business needs to be successful? I think so.

A quick story from my past.

When I graduated from college, I thought that I wanted to work in the construction industry. I always enjoyed working with tools and building things out of wood - it seemed like a good idea. (Sinking hip deep in the mud on a cold rainy November morning in Massachusetts made me rethink my position.) Anyway, a close friend had started a small construction company and he offered me a job. I was (and am) very grateful to him for that opportunity - I learned a ton. This was around 1987 - the latest innovations on job sites were pneumatic nail guns. They were expensive. For a small company, deciding to invest capital in that technology wasn’t an easy decision. The owner had visited other job sites to see these new guns in action - they really sped up the building process. They changed the competitive landscape.

Pneumatic nail guns were expensive and represented a new set of practices that would need to be adopted in order to exploit this new tool. My friend didn’t invest…initially. Partially, I think, he was concerned that we would increase our speed, reduce our timelines and he wouldn’t have the work necessary to keep me busy - he was loyal to me and knew I needed a paycheck. But speed advantage couldn’t be ignored for long and he purchased the guns. Our speed increased and his profits went up - and he won new work to keep me in a paycheck.

I share this story because many businesses are faced with the same fundamental choice - just not with nail guns. The way they are operating their businesses is ignoring the technological advances that are available to them and the transformation that their businesses could produce with them. Like with the nail guns, businesses won’t be able to ignore these changes for long.

To be competitive, businesses must be assessing the changes in the marketplace and taking action to exploit those changes ahead of their competition. They must make choices about where to invest - what investment is required to help their businesses beat their rivals. This is the essence of what it means to compete.

If you are an owner or executive of a mid-market company, are you equipping your organization with the tools they need to win? Are you avoiding the investment required to transform your business practices and make them competitive in the digital marketplace? Just like the nail guns, you will have to eventually make those investments. Your teams need new capabilities to execute the strategies you are inventing - don’t make them wait. Your customers are demanding new ways to transact with you - they won’t wait.

Don’t opt out of the competition - your business is at stake if you do.

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