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January 12, 2009

Can you compete?

In an industry that is quickly becoming filled by commodity players there is a need for you to separate yourself from the competition. Seeking, developing and marketing your difference, or your competitive advantages, is not something you dedicate time to each week - it is the hallmark of how you operate.

In a world where literally everything is bought and sold online, uses extraordinary customer service and accurate deliveries - globally - as a differentiator between them and their competitors.

Insurance is a commodity industry. Policies are all the same and pricing is easily comparable. There is almost nothing to distinguish any insurance company's policies from that of their competitors.

Yet Warren Buffet has built a franchise business (Geico, GenRE) out of financial discipline, the ability to pay - no matter what the price, and a willingness to not deal at any price.

Accenture distinguishes itself by an incredible depth both vertically and horizontally in the fields related to corporate change, and Alan Weiss has done so through providing thought leadership in a range of consulting related areas.

The difference between a commodity and a franchise is that a commodity competes on price. Whereas a franchise can raise prices without suffering any losses in either clients or the amount of work they charge for.

Here's how I would deal with this. What are you scarce capabilities? A skill, combination of skills or experiences that, while not unique, are hard to come by.

It might be a particularly large and arduous project, a rare combination of niche knowledge with a mainstream discipline, (Like probabilistic analysis and (say) Succession planning, there must be something in that...) or it could even be the depth that you are able to offer that no others in your area can.

Whatever it is you need to discover it, sharpen it up, market it, and then add to it.

In a game like ours, with more and more people streaming into it every day, competing is not a percentage of your week - it's your life. Fun isn't it !!