How to Hire & Manage Consultants

By Mike Myatt, Chief Strategy Officer, N2growth

While you might be lucky enough to survive in business with little or no advice from others, you will certainly not maximize your potential for success by doing so. All CEOs and entrepreneurs need advice in a wide variety of constantly changing areas…That said, I’m always somewhat perplexed as to why people hire certain professionals. The nature of my business is that I often succeed other advisors who have failed in their assignments, and I have witnessed first hand the carnage that can occur from unsuccessful engagements/implementations with third party professionals. So, in today’s post I’ll share some thoughts on both selecting and managing outside advisors…

Even though many of the CEOs and entrepreneurs reading this next sentence won’t agree with my conclusion, I am nonetheless obligated to share the reality of what is most often times the harsh truth…When you engage a professional advisor, the outcome you receive will most often times be the outcome you deserve. You see, as with any other profession there are excellent practitioners, middle of the road journeyman, well intended light-weights, and brilliant academics with no practical experience or common sense. The reality is that if you hire someone who doesn’t meet your needs, the fault rests with you.

Making things even more complex is the fact that talent, while clearly an important consideration, is only one factor in determining whether your engagement will have a successful outcome. A smart advisor doesn’t necessarily translate into a good advisor. Just because someone possesses an advanced degree doesn’t mean they have any practical experience. Most consultants don’t graduate from business school with any real world business experience. Furthermore, the real world experience they do possess may offer little benefit or applicational value to your specific circumstances. It is imperative that you select advisors who are not only a subject matter experts in their practice area, but that also possess solid business acumen and a bit of savvy. I have a very simple rule that I’ve followed for years in evaluating whether or not to hire a consultant: If an advisor is not fluent in my business, they won’t be retained by me to represent my business…end of story.

As nice of a thought as it might be, the reality is that you cannot just hire an advisor and expect all of your problems to be solved. As a C-level executive you should be bright enough to realize that if you turn the asylum over to the lunatics, chaos will certainly ensue. At the risk of enraging many in my profession, consultants and advisors are not superheroes, they are role players. Now mind you, the role can be of a complex or critical nature, but it is still just a part of the equation. The outcome of your engagement will be largely be dependant upon the following items:

  1. Problem Identification: You’d be surprised at how many executives retain professional advisors to either solve problems they can’t even define or articulate, or worse yet, to provide a solution to a problem or challenge that doesn’t even exist. If you don’t know what you’re trying to accomplish, how are you going to direct and manage an outside advisor. Moreover, how are you going to assess whether you are receiving great advice or flawed counsel? Don’t engage an advisor unless you know specifically what it is you are trying to accomplish.
  2. Selection: Did you hire the right advisor for the right reason? The first step in the selection process should not be based upon talent, price, availability, geography, past track record, etc. Rather it should be based upon value alignment. Do the consultants engaged share your values, understand your culture, understand your market, and understand your objectives? If not, their track record and their solutions will be meaningless. I can’t tell you how many times I’ve witnessed companies select advisors who were “high-powered” or “trendy, hip, and avant-garde” only to find their recommendations to be nothing short of a train wreck because they were not consistent with the values of the client they were supposed to be serving. Why would you ever let someone tinker with your brand, your credibility, and your business who didn’t share your values? Trust me when I tell you that if you do, you’ll regret it…
  3. Cost: Hire the best practitioner you can afford, not the cheapest you can find. As with any profession, there is value in experience and knowledge, as well as a competitive advantage to be gained with talent, reputation and connections. Never hesitate to get a second opinion as there are very few stock answers to any business issue.
  4. Accountability: The best way to manage your engagement risk is to be proactive not reactive. Assess your risks and take aggressive and proactive measures to mitigate said risks by being actively involved in the management of the engagement. As a principal owner or senior executive the buck stops with you. You need to manage the advisorand the process to the best possible outcome, and this cannot be accomplished with a passive management style. You can either manage the engagement process or let it manage you. Make sure the project deliverables are clearly understood, and that a plan with benchmarks, milestones and deadlines is put forth outlining how to reach said deliverables.

So how do you know if the advisor you’ve hired is as good as they say they are? Match-up their rhetoric with the following warning signs:

  1. Beware the Part-Time Expert: My father has an old saying that I’ve found to be very accurate over the years: “part-time efforts, yield part-time results.” If the person seeking your business has a day job that constitutes something other than the services he or she is pitching, run for the hills. If your potential advisor is moonlighting then they really have no business asking for your business.
  2. Beware of those with no Social Presence: If you want to get to know someone, do a little social snooping. If you don’t like how an advisor engages online, you probably won’t like what you see when you get face to face. If your would-be advisor cannot be found online, doesn’t blog, tweet, or is invisible on the major social networking platforms you might want to rethink their qualifications. Important Caveat: the mere existence of a website, blog, YouTube channel, LinkedIn profile, Facebook account, or a Twitter page doesn’t guarantee competence…anyone can amass thousands of followers on Twitter – those with a large following on Twitter often just follow-up to the Twitter maximum, wait for others to follow them back, delete the others and then repeat the process. Look for someone who has amassed a quality list of followers, who has more people following them than they follow, and who actively engages with their followers.
  3. Beware the Expert without Clients: No referenceable clients equals zero credibility. Your position should be one of “don’t tell me – show me.” It’s one thing to show you their own work, but quite another to show you demonstrated success on behalf of paying and satisfied clients. Equally as important, have they served clients similar to you? Have they served clients who have already been where you want to go? Don’t let someone cut their teeth on your business. Experience counts.
  4. Beware the Expert without Industry Recognition: Good advisors cannot remain in stealth mode. Talent can’t hide, because news of performance spreads. If your so called expert doesn’t have a professional body of work you may want to think twice. If your expert isn’t referenced as such by credible, independent third parties, isn’t published, doesn’t speak, lecture or teach, hasn’t received any industry recognition, etc., then they might not be a true expert.
  5. Beware the Expert too Aggressive in their Pursuit: There is a big difference between professional follow-up and desperation. Let me be blunt…most professionals at the top of their game haven’t made a cold call in years. In fact, even in this down economy they typically have more business than they know what to do with. If your world-beater of a consultant is chasing you down like a hungry dog after the meat wagon then you may want to take pause.
  6. Beware of Bargain Basement Expertise: In most cases the reality is that you get what you pay for…True expertise doesn’t come cheaply, but is well worth the investment. Few things in business will get you in as much trouble as not getting advice and counsel when needed, or worse yet, getting poor quality or incorrect advice. I would much rather pay an expert a larger fee for 30 minutes of their time and get what I need rather than pay someone $50 dollars an hour who is hoping to fake it until they can make it…Questionable advisors will take much longer to get from point a to point b (if they get there at all), and will likely cost you more money at the end of the day when contrasted with true professionals.  

As a consumer of professional services, the phrase “Caveat Emptor” (Let the buyer beware) applies in spades. If you take an informed and proactive approach to managing your engagement risk you will fare better than those who don’t. A plus might just be that if you hire the right advisor for the right reasons, you may in fact end-up developing a strong personal and professional relationship that won’t end-up as subject matter for another horror story or consulting joke.


Leadership & Loyalty

By Mike Myatt, Chief Strategy Officer, N2growth

For those of you not familiar with the two characters from Band of Brothers depicted above, they are polar opposites in terms of their approach to leadership. Captain Soble (left) represents a leader in rank only, whose efforts to intimidate his men are a classic example of fear based leadership. Shown at right is Lt. Winters, who leads by example and inspires the loyalty of his men by demonstrating he is worthy of their trust in even the most difficult of situations. In today’s post I’ll examine the value of loyalty as it relates to leadership.

Is it just me, or has loyalty become rather scarce these days? Anyone who’s been in leadership for any length of time has likely pulled more than a few knives out of their back. Bottom line – there seems to be way too much focus on “me” and not enough focus on “we” these days. There have always been those who have fostered trust and earned loyalty, as well as those who have abused both for personal gain. But in this “what have you done lately for me” society where relationships have degenerated into little more than stepping stones, loyalty seems to be elusive as best. One of a leader’s most important functions is to create an environment where trust and loyalty are the rule and not the exception.

If relationships are the currency of leadership, it is important for leaders to note that loyalty serves as the cornerstone of any healthy relationship. Leadership and loyalty go hand-in-hand. In fact, so much so that leaders who fail to understand this simply won’t endure the test of time. While successful leaders share many common traits, all great leaders have one thing in common – they are not only adept at earning the loyalty of those they lead, but they also recognize that loyalty is a two-way street. When it comes to loyalty, the simple rule is that you will not receive what you will not give.

I think it’s important for leaders to do a gut check and take note of the difference between fear based loyalty and trust based loyalty. As a leader, do you command the loyalty of those around you because of your title, or have you earned it by gaining their trust and respect? Loyalty commanded is fleeting, loyalty earned is enduring. Hint…being feared as a leader is not a badge of honor to be sought after. It’s one thing for employees to have a healthy respect for you, but quite another to be in fear of you. Remember that respect is earned, and fear is imposed. Fear based motivations don’t instill loyalty, create trust, build morale, inspire creativity, attract talent, or drive innovation. The truth is fear stiffles, and if left unchecked, eventually kills all of the aforementioned attributes.

If you’re a leader who has created a fear based culture I can guarantee you two things: 1.) your employees won’t give you their best, and; 2.) when things get tough, or other opportunities present themselves, your employees will cut-and-run at the first option that comes their way because you have failed to earn their loyalty. As a leader, if you believe that instilling fear in your employees is a good thing, you may be a tyrannical bully, but you are certainly not an effective leader.

Remember that great CEOs see themselves not as masters of the universe, but as inspirational servants, catalysts, teachers, and team builders…Again, I would strongly encourage you to think “leader” and not “dictator.” Reflect back to your time as a student…which educators brought out the best in you? My guess is that it was not the know it all professors who lived to put you in your place and show you how much they knew and you didn’t. My suspicion is your best memories are of those teachers who inspired you, encouraged you, brought out your passion, and challenged you in a positive fashion. I would also suspect you produced you best work for the latter and not the former.

So, how do you tell if your employees respect you or fear you? After reading the above comments it should already be obvious, but just in case, review the 5 items below:

  1. A Team of Yes-men: Feared leaders either surround themselves with like-minded people, or train people to share their views in a vacuum. Either way they lose…Great leaders value the opinions of their team whether or not said views happen to be in concurrence with their own beliefs. The best leaders not only subject their ideas to scrutiny – they openly encourage it.
  2. Lack of Interaction: Along the lines of number one above, if executives, management, and staff don’t proactively seek your advice and input then you have a respect problem. They either don’t value your contributions, or they know from experience that you’ll treat their inquiry in a belittling fashion. Over time, many fear-based leaders unknowingly train their team to think: “Why even try if there is no upside? The boss will never go for that.”
  3. Lack of Feedback: If as a leader you don’t subject yourself to a 360 review process, then you are not earnestly looking for personal growth and development opportunities. Here’s an ego check – if you do utilize a 360 review, and all the responses are positive, evaluate whether this has occurred because you are feared and are thus the recipient of insincere flattery, or because you have the loyaly and respect of those you lead.
  4. Revolving Door: If you either can’t attract or retain tier-one talent, you are not an effective leader who has earned the respect and loyalty of your team…In fact, upon closer examination, you’ll find that you probably don’t have a team. Sad but true…real talent won’t be attracted to, or remain engaged with leaders who operate on fear-based tactics.
  5. Poor Performance: Leaders who have the respect of their team will outperform those that don’t. Leaders who attempt to use command and control tactics without the necessary underpinnings of real leadership principles will simply not do well. If your organization is not thriving and growing, then the first thing that should occur is a long look in the mirror…Begin your triage by first evaluating your leadership qualities or the lack thereof.

Ask yourself the following question: If your employees held an election today, would you be re-elected as CEO by a landslide, or would you be voted out? Bottom line…what is rightfully earned and freely given (loyalty, trust, and respect) will always outlast what is imprudently acquired for the wrong reasons (the bully tactics of fear-based control). For me it’s an easy call – you stand by those whom you trust and respect, and you don’t abandon them because it’s popular or convenient. Loyalty matters…

What say you – Captain Soble or Lt. Winters?

Leadership Interview – Doug Conant

By Mike Myatt, Chief Strategy Officer, N2growth

Many people discuss transformational leadership, but few can point to a modern day CEO who is an example of a transformative leader. Douglas R. Conant is the President and CEO of Campbell Soup Company, and he epitomizes just such a leader. When Doug took the helm at Campbell’s 10 years ago, he reversed the trend of declining earnings and employee engagement. In 2010, during a down economy, the company posted a 12% increase in earnings on $7.7 Billion in sales, and the storied brand now possesses some of the best employee engagement rankings in the industry. Doug had a similar impact in his previous role as President of Nabisco where the company posted 5 consecutive years of double-digit earnings growth under his leadership. What I most appreciate most about Doug is his passion for those whom he leads. He’s part old-school; still regularly sending hand written thank you notes to employees, and part new-school; equally as comfortable communicating on Twitter (@DougConant). Doug’s new book TouchPoints, co-authored with Mette Norgaard is a must read for leaders. If you do one thing today watch this video and then leave a comment thanking Doug for freely sharing his considerable insights and experiences.

Leadership and Mentoring

By Mike Myatt, Chief Strategy Officer, N2growth

Mentoring -  A word to the wiseLeadership and mentoring go hand-in-hand. In fact, this is so much the case I don’t believe a person qualifies as a leader unless they are a mentor. If you accept this premise as correct, then why is it so many in positions of leadership fall woefully short in successfully transferring the benefits of their wisdom and experience to others? To the chagrin of many reading this post, I believe there is regrettably all too often a difference between someone who holds a leadership position, and that of a mature, effective leader. In the text that follows, I’ll share a few thoughts on not only the benefits of mentoring, but how to do it effectively.

If you have been a reader of this blog for any length of time, you know that I believe many of those in positions of leadership need to get over themselves. Leadership is not about the leader, but rather about those being led. As a leader your success can only be found in one measure: whether or not those you lead are better off as a result of being led by you. I have long held that the great privilege of leadership carries with it an even greater responsibility; the obligation of service. Once a person assumes a leadership role, they automatically inherit the responsibility for the care, well-being, and overall stewardship of those they lead. While some refer to the aforementioned demands as the burdens of leadership, I like to think of them as the primary benefits of leadership.

Let me cut right to the chase and be clear; mentoring is part of a leader’s job description. I’ll take this one step further by also being very blunt; Your obligation as a leader is to develop people to the best of your ability which hopefully leads to people reaching their full potential. Put simply, if you can’t or won’t become a good mentor, then you have no business being a leader.

All successful organizations create a culture where the acquisition, development, implementation, and transfer of skills and knowledge are highly valued. This type of culture simply cannot exist where the practice of mentoring is not a top down initiative. Leaders must not only embrace mentoring, they must become its champion. Following is a list of 5 simple rules that all leaders can turn to help improve their mentoring efforts:

  1. Trust: Any relationship between mentor and mentee that is not built upon a foundation of mutual trust and respect won’t be productive, and won’t last. Being a mentor has nothing to do with being arrogant, condescending, or patronizing in an attempt to demonstrate your knowledge, and the mentee’s lack thereof. In fact, I can think of no circumstance where the old axiom “people don’t care how much you know until they know how much you care” applies than as it relates to the role of a mentor.
  2. Mentoring Requires a Mutual Commitment: Your mentee will only be as committed to the process as you are. If you’re not totally committed to the success of your mentee, they will only pay you the same lip service in return for that which you’re giving them. Likewise, a healthy and productive mentoring relationship cannot be built upon on a one-way street from the mentor to the mentee. While a mentor can be committed and provide excellent advice, the harsh reality is that you cannot mentor someone who doesn’t want to be a mentee.  Those who seek shelter in the wisdom of sound counsel must also be willing to take refuge there. Those unwilling to do the latter really don’t value the former. Bottom line…Don’t waste the time of your mentee if you’re not committed to the process, and do not waste your time on someone who doesn’t value your advice.
  3. Walk the Talk: Who is your mentor? Don’t have one? Hmmm…Learning is a life-long endeavor, and you don’t simply reach a magical place in life where you become the all knowing mentor who no longer has anything to learn. Your mentoring efforts will be better received, and will be more productive if you are not just a mentor, but a mentee as well. Make it a point to communicate how much you believe in the process of being mentored by telling your mentee how you’ve benefited from mentors past and present.     
  4. Choosing Your Mentees: There is simply not enough time in the day for you to become everyones mentor. You cannot do it, so don’t even bother trying. This begs the question of who you should personally mentor, and why? Aside from other essential aspects of mentoring that have already been mentioned, mentors must keep in mind their overarching obligation to the organization…the business purpose if you will. Leaders need to evaluate coaching and mentoring decisions based upon the potential ROI vs. the potential risk. Only invest your time where the biggest returns or the largest risks can be impacted. As a leader your first responsibility is to the greater good of the organization, and if your mentoring time is invested in non productive efforts then you’re not catalyzing progress, you are gating it. One of the toughest things for a leader to come to grips with is that not everyone can be saved. If time squandered with an individual is adversely impacting the greater organization, then you cannot continue to invest time there. If someone will not gladly submit themselves to being mentored, then I submit that you gladly replace them with someone who will. A person that won’t invest themselves into their own development not only limits their own future, but they in turn become the proverbial weak link in the chain.
  5. Ownership: Don’t view mentoring as just another development initiative and pass the buck to HR. Effective mentoring programs while led from the top down, are decentralized and driven down to lowest possible levels of the organization. Everyone should be included in some form or fashion. As noted above, you cannot do it all yourself, but you can create an enterprise wide framework that makes sure that nobody falls through the cracks. As noted above, not everyone may be a good choice for you to personally mentor, but if a person in worthy of being a part of your organization to begin with, then they are worthy of someone’s attention and efforts as a mentor.

As always, I welcome your thoughts and comments.

Rethinking Good To Great

By Mike Myatt, Chief Strategy Officer, N2growth

If you’re a frequent reader of this blog you know from time-to-time I’ll take aim at a sacred cow and pull the trigger. I’ve had issues with some of the concepts contained in Jim Collins book Good To Great since it was first released. Given the legions of those who have drunk the Good to Great Kool-Aid, I realize today’s post might be akin to spitting into the wind. That said, it is nonetheless my hope to burst a few bubbles and bust a few myths. The issue that finally placed the theories purveyed by Collins squarely into my cross-hairs was a recent conversation I had with a very intelligent man who referenced Good To Great as if he was quoting scripture, and referred to Jim Collins as if he were the Almighty Himself – enough was finally enough…

Let me be clear – I have nothing against theories so long as they’re presented as such. But when theories are marketed as fact, I begin to lose patience rather quickly. Just because an opinion is expressed boldly, and even when data can be developed to support the opinion, opinion doesn’t become fact – it’s still an opinion. I’ve been around far too long, and cleaned up far too many messes that resulted from theory being applied as fact to be lulled into stepping on this very slippery slope. Let me put this another way – not all business logic is good business logic.     

Not only do I believe that most people should rethink aspects of Good To Great, but they should also reevaluate many best selling business books that use biased statistical data as a substitute for common sense business wisdom. The simple truth is that anyone can prepare a chart or graph to support virtually any premise or position at a given point in time. However when one expands the window of time under which static data is observed, and the static data has to withstand the test of time as it becomes subject to the fluidity of changing markets, and the results are rarely as constant as many authors would have you believe.

The first thing that readers need to keep in mind is that there is very often a huge difference between a commercial best seller, and a book that provides real value. Being a commercial best seller is about buzz, hype, and branding…it is about book sales rather than the root value of the content. In being true to my contrarian self, and with rare exception (Peter Drucker, Adam Smith, etc.), I believe that the more popular a non-fiction business book is the more likely it is proffer fluff over substance. 

Before I go any further, let me acknowledge there are valuable nuggets to can be taken away from most books so long as the reader is capable of discerning the fictional hype from the factually substantive. While I believe there is an element of quality information to be gleaned from the pages of Good To Great, I also believe there are some potentially dangerous and misleading concepts/principles that can cause great harm to a business if taken out of context. The key to understanding, validating, and appropriately applying any form of research is to understand the context in which it was developed, as well as the business logic that was used to frame it.

The problem with Good To Great is that the reader is left with the false impression that the principles contained in the book can be universally transferred to their individual situation without regard for context. The reader is led to believe that if they apply the principles contained in the book to their business, that the results will mirror those of the companies examined in the book, and that their business will in turn make the leap from good to great and enjoy sustaining good fortune. This is simply not true. You see all research, even good research, must be evaluated contextually. There are very few universal truths in business that can be applied in a vacuum. In the text below I will examine what I believe to be three of the most critical flaws in business logic contained in Good To Great:

1. The Study Itself: The study in and of itself has a bias in that Jim’s research staff focused their efforts on 22 Fortune 500 Companies. The study compared and contrasted 11 companies that made the transition from good to great, and 11 peer companies that did not over a time period certain as judged by growth in stock returns. The problem with this study is that it applies to a very small universe. How many of you reading this post are currently CEO’s of Fortune 500 companies? Fortune 500 companies are mature, well branded, well capitalized, already successful companies. To assume that a start-up, small, mid-size, or even relatively large company can universally adopt and apply the business practices of Fortune 500 companies is just not realistic. Adopting this line of thinking in a vacuum can actually send a company into a death spiral.

2. Level Five Leaders: Jim refers to a hierarchical matrix of leadership that describes 5 different types of leaders, and suggests that only with rare exception can anything other than a Level 5 leader take a company from good to great. While I agree with many of his suppositions on what makes a great leader, I vehemently disagree that only one leadership style can work effectively. I have personally witnessed just about every style of leader both succeed and fail. While I find some leadership styles more pleasant than others, to adopt a “one size fits all” mentality toward what it takes to lead a company is a huge mistake. It is not the leadership style in a vacuum that is as important as selecting the right leader based upon aligning style with the environmental, situational and contextual circumstances of the time along with the mission at hand. There is NO perfect leader – just the right leader for a given situation at a given point in time.

3. The Flywheel and the Doom Loop: Jim’s theory here is that “those who launch radical change programs and wrenching restructurings will almost certainly fail to make the leap” (from good to great). While I am a strong believer in the flywheel principal as a general practice, there are also times when radical change is in fact the critical element needed to move a company to the next level of success. It is not change or reengineering that are the evils, rather it is ill-conceived or poorly implemented change that can cause harm. Beware the change agents for the sake of change, but embrace change by design (radical or otherwise) for the good of the enterprise.   

The primary differences between Jim’s view of the world and mine: is that Jim believes his data is applicable to virtually any situation in business, and I believe everything must be evaluated against the situational, environmental, and contextual aspects of any given scenario. Assuming that all formulas are made up of constants, without consideration for the inevitable set of variables that always come into play, is just not sound thinking. Bottom line – Just because a book or an author is popular, doesn’t mean the opinions espoused within the covers of the book are synonymous with fact. Remember…Challenge everything!


Leadership and Competition

By Mike Myatt, Chief Strategy Officer, N2growth

Competition is only to be feared if not understood. If understood, competition is not only healthy, but it can also be very prosperous. If you really want to understand a leader’s perspective on the market, ask them about their competition.  A leader’s view on competition will not only reveal a lot about their beliefs on current and future market trends, but also on innovation, branding, talent management, supply chain issues, constituency management, capital markets, and customer facing. Whether you want to admit it or not, competition is part of your world, and likely a bigger part than you’d care to admit. In today’s post I’ll share my thoughts on how to identify competitive threats as well as competitive opportunities…

Every leader has an approach to dealing with competition. Some leaders completely ignore the topic of competition as if it doesn’t exist, others view competition as a minor nuisance, some executives see the competitive landscape as a battlefield where war is waged on a daily basis, and others view competition as untapped opportunities for collaboration and innovation. Smart leaders are fluid in their approach and understand that competition can breed significant opportunity.

I’m always amazed by those who regard the topic of competition as sophomoric. They tend to dismiss this subject as if it somehow diminishes their business savvy to admit they have competition. These captains of their own destiny share the perspectve that competition is not a significant factor in the execution of their business plan – they’re in control and competition is irrelevant. While this may make for a nice sound bite, I don’t buy it, and if they’re truly honest with themselves, neither do they. In business you can either choose to deal with your competition (even if that means partnering with them), or you can opt to stand idly by and let the competition eat your lunch.

While some companies talk a good game with regard to competitive strategy, in my experience very few businesses actually address the issue in adequate fashion. I suppose much of my perspective on competition was formed during my days as a soldier and athlete. In the military we valued actionable intelligence, studied our enemy’s strengths and weaknesses, developed a battle plan around a solid strategy, and executed our tactical mission as if our lives depended on it – because they did.

Similarly, in my days as an athlete, our game plan each week was refined based upon the strengths and weaknesses of the team we were playing next. If we didn’t study films and scouting reports, develop plays that would exploit match-ups, and execute our game plan we would lose – it was as simple as that. Dealing with competition in the business world is really no different than dealing with enemies on the battlefield or competitors on the athletic field…you either win or lose based upon your state of preparedness, perspective, interpretation and execution. In the following paragraph I share my views on competition so that you can understand how I personally navigate this issue.

There is arguably no more competitive space than what exists in the professional services arena. While I tend to view my competition as peers and colleagues, it is not lost on me that my clients have a choice. The client is in control. Not me, nor my competitor – the client. I know who my competition is, and I know where and when I’m a better choice. I have a very strong understanding of where I can create the most value for my clients. Where I’m not the best fit I refer my peers, or in some cases I partner with them, but I attempt to ensure the client receives the best solution whether or not said solution includes me or my firm. Put simply, I deal with competition by attempting to create the best solution for my clients. Sometimes this includes my colleagues, and sometimes it excludes them. One final thought here…the competition I’m most concerned about is not the competition that I know, but the competition that I don’t. I’m always on the lookout for new practitioners entering the market where we have practice areas, disruptive technology, or changes in the landscape that could disintermediate certain aspects of the market. I worry much more about the unknown than the known…

Now it’s your turn – how well do you know your competition? No really…not how well do you think you know your competition, but how well do you really understand them? I’ve often found executives when asked about their competition tend to talk about the organization that most closely resembles their own. That’s nice, but how much time do you spend evaluating people, entities or technology that might not be competition presently, but that could be down the road? Do you have a business intelligence platform? When was the last time you conducted a formal competitive study? Do your R&D and innovation programs evaluate the competitive landscape? Do your marketing, PR and branding initiatives satisfactorily address the competition? Do you stack-up as well as you think, or have you just adopted a position out of convenience?

The first step in developing a competitive strategy is to identify your current and potential threats, and then to prioritize said threats based upon perceived risk/reward and cost/benefit scenarios. The following list is clearly not exhaustive, but it is representative of the main competitive threats to a business. As the following list indicates, competition can come in the form of any one or combination of the following potential threats:

  1. Existing or potential direct and indirect competitors.
  2. Existing clients or end-users that could either become competition or strengthen your competitors if they have a change in loyalty.
  3. Current or former employees who could become competition.
  4. Vendors, suppliers or distributors that could become competition, or provide an edge to your competition.
  5. Competitive innovations in process, management, talent, pricing, efficiency, etc. that can cause disruption in the market.
  6. Strong changes in brand perception via news, PR, branding, litigation etc. can create changes in the competitive landscape.
  7. Competitive technology innovations that could adversely impact your business.
  8. Competitive mergers, acquisitions and roll-ups that could adversely impact your business.
  9. Political, legislative, regulatory, or compliance actions that could create a competitive imbalance in the market.
  10. Changes in general market dynamics that could create competitive changes in the market.

Once all areas of competitive risk have been identified and prioritized it will be much easier to develop a strategy for stacking the odds in your favor regardless of when, where, or how you encounter the competition. The key to successfully exploiting competition over the long haul is linking your competitive strategy to the discipline of innovation and the mindset of being externally focused with regard to the market. While customer centricity is important, don’t forget to look for new customers/markets as well.  Maintaining your existing revenue base is important, but deepening and expanding relationships is even more important. A sustainable competitive advantage is not found by creating minor advantages in product features. Long-term advantage is created by innovating around the needs of the market with a focus on long-term value creation.