Learning as Competitive Advantage

Seth Godin wrote in his 2002 best-selling book, Purple Cow, “You’re either remarkable or invisible.” In other words, you’ve got to be willing to stand out to be seen. As we’ve noted before, you can’t outperform and conform at the same time. Copying others can only take you so far. We can’t distinguish ourselves by copying prior performances. Ron Friedman in Decoding Greatness quotes Peter Thiel who offered “Every moment in business happens only once. The next Bill Gates will not build an operating system. The next Larry Page or Sergey Brin won’t make a search engine. And the next Mark Zuckerberg won’t create a social network. If you are copying these guys, you aren’t learning from them.” It’s similar to those that copy someone else’s answers on a test. They may get a decent mark, though they will never outperform the person they copy, and they aren’t learning. They aren’t better as a result. Copying allows us to hide and become invisible. Our businesses won’t benefit from this.

Seneca in one of his letters wrote, “Won’t you be walking in your predecessors footsteps? I surely will use the older path, but if I find a shorter and smoother way, I’ll blaze a trail there. The ones who pioneered these paths aren’t our masters, but our guides. Truth stands open to everyone, it hasn’t been monopolized.” The idea is that we can look and learn from others, but at some point we aren’t wedded to their ways, we can break free by charting our own course, taking a leap to evolve. The past is a guide, not gospel. As Timothy Gallwey wrote in The Inner Game of Tennis, “gospels change and they are changed by people who had the courage to experiment outside the boundaries of the existing doctrine and trust in their own learning process.” It takes courage to care enough to dare to be different.

If you’re going to lead, you need to leap. If you do leap and earn a lead, you’ll be on your own. Yes, as Ginni Rometty offers, “Be first and be lonely.” Being alone may be uncomfortable. It may be harder work. But it’s the only path that allows us to be distinguished as something other than part of the crowd. It’s like Gabrielle Zevin writes in her novel, Tomorrow, and Tomorrow, and Tomorrow about one of the main character’s grand parents that came to LA from Korea and sought to establish a business. They surveyed their community and realized that Korea-Town or K-Town had all kinds of Korean restaurants so they had to come up with a different idea to garner attention. Instead of offering what was already widely available within their community, they set up a pizza place. Zevin writes of the grandparents’ decision, “And that’s why we decided to make pizza. There weren’t any other pizza places in that part of K-town. It was scary, at first, because we didn’t know anything about pizza, but then we set ourselves to learning about pizza. We didn’t have any choice. We had two babies and bills to pay.” This couple wasn’t motivated by a passion for pepperoni. They were moved by necessity. They had to find a way to make an income in order to survive and provide for their family. They were determined to be different by design.

It’s been said in sports and business that nothing fails like success. When we win we think we have things figured out. Moreover, we’re motivated to maintain what we’ve been doing because that got us where we wanted to go. Writer Jason Zweig reminds us, “Being right is the enemy of staying right because it leads you to forget the way the world works.” We would do well to think of the title of Marshall Goldsmith’s book which says it all, What Got You Here Won’t Get You There. For example, the skills to create wealth are different than those required to preserve it. In business, the skills to take risks and start businesses are different than those required to manage an existing and stable entity. Entrepreneurs with little resources can swing for the fences as they have the “freedom” of having nothing to lose. Whereas, those managing endowment funds have the pressure to preserve overruling risk taking tendencies. A mistake established businesses make is investing in the status quo to the detriment of their futures. They continue to invest in archaic production or technology while newer, faster, cheaper methods of production are adopted by competitors which pass them by. Worse, are the companies that don’t even invest in maintaining their current production capabilities and drain the golden goose in order to sustain dividends instead of reinvesting. Each ride their success from the past into a worse future because they aren’t seeking improvements.

Sustainable competitive advantages are largely illusions. Any advantage in a competitive arena is limited. In business, a classic example that captures the idea that advantages don’t last is the reality that the turnover amongst the biggest and best companies that comprise major stock market indexes like the S&P 500 in the US reliably churns. Few last on this list for longer than a generation. Worse yet, over 40% of all public companies become worthless over time. Imitation may be the highest form a flattery. Nonetheless, imitation is also a guarantee that things that differentiate competitors decrease over time. The more successful something is, the more likely it is to be copied. That’s close to an economic truism. Jeff Bezos has offered, “Your margin is my opportunity.” Competitors smell your success and seek to carve a piece out for themselves. Paraphrasing no lesser authority than Norm from the TV show, Cheers, suggested that “It’s a dog eat dog world out there and we’re all wearing Milkbone undershorts.” Staying ahead is tough. Any success that is eeked out creates a smell that is sniffed out by those that want what the successful have been able to grab.

We can take separate advice from another book title that says it all. Former CEO of Intel, Andy Grove, wrote Only the Paranoid Survive. Plenty of businesses have found prosperity on the back of fear and doubt. A nephew to necessity may be fear. To some a constant search for improvement is fueled by fear. The power of paranoia is reflected in sentiment suggested by David Goggins in his latest book, Never Finished, where Goggins writes, “Life is the ultimate competitor. It takes no days off, and it won’t care if you’ve made some money or got a promotion at work. All that means is you are good to go for a moment or two. No matter how badass and successful you think you are, trust me, there is a semi coming around a blind curve, ready to smack you in the fucking mouth when you are comfortable as all hell.” The prey drive can be found in some of us that will work hard to stay one step ahead of whatever threat we feel is hot on our heels. As Michael Moritz said of a large investment firm that has been a leader in its niche for forty plus years as a reason for its longevity, “We’ve always been afraid of going out of business.” Fear fuels and focuses. Those that recognize leading is little other than having a target on one’s back seek to sustain their game by pushing forward relentlessly. Maybe permanent paranoia is too strong a state to seek. However, as Todd Henry notes in Die Empty, “The key to long-term success is a willingness to disrupt your own comfort for the sake of continued growth.”

The only way to sustain a competitive advantage is to continuously reinvent your business such that you continue to stay one step ahead of the competition. Embracing the idea that whatever distinguished a leader yesterday will inevitably be copied tomorrow meaning that the advantage will evaporate spurs a constant search for ways to improve. This is why we refer to the Evolution of Excellence as a cycle. It’s a process that must be repeated over and over. It isn’t one and done. We need to constantly rinse and repeat. We need to cleanse the old ideas and replace them with clean, new ones regularly. It’s better to plan this process and pursue on our terms than to be reactive trying to keep up with changes led by others…

In business, we’re seeking sustainable competitive advantages. However, as our industry leaders on various stock exchanges are showing us we’re churning and burning through competitive advantages with ever faster frequency. Almost as soon as an edge is achieved, it is dulled by the competition copying and catching up. Investment writer, Morgan Housel, in an article has observed that “the ability to learn faster than your competition” may be the only truly sustainable competitive advantage left standing. How can you embed the Evolution of Excellence idea into your organization? Complacency is the enemy. As an old Texas adage says, “If all you ever do is all you’ve ever done, then all you’ll ever get is all you’ve ever got.” Can we explore ways of developing a heightened awareness of our surroundings in business? Staying abreast of your competitive environment and working to improve flows from a culture of curiosity. A good start is accepting the fact that any competitive advantage that your organization may have been able to eke out is temporary at best.

Author and consultant, Dorie Clark, in her book Stand Out invites us to ask, “What’s next? When sustainable competitive advantage no longer exists—when other companies can catch up to your product innovations in a year, rather than in a decade—what’s your move?” Perhaps, prioritize the pace of your planning? Seek speed in your budgeting process. Shift from annual to quarterly budgets. Increasing the frequency and speed of planning invites more occasion to review the way things are. The more frequently we take our pulse, the better we get at knowing where we stand.

Consider, too, incorporating an innovation team in your business. Task people with the specific responsibility for finding things to break in order to become different and stronger. This is copying the idea from several technology companies that have departments that are actively working to come up with the next big idea even if that means making their core product obsolete. Proactively pursuing putting yourself out of business through your own internal innovation is a better move than letting the market do it for you. Delegate disruption proactively as preparation as opposed to being at its mercy.

We can incorporate not just looking but learning into our strategy. One way to learn is to adopt the Care component of our 4 C’s of customer service. The more we pay attention to our customers and what their needs are, the more insight we can gather as to what may be of benefit to them. If we look out, not just at what competitors are doing, but at what are customers are doing, feeling, and needing, then we can be more in tune to customers. Empathy with respect to customers is an essential element of continuing to learn and develop new and improved ways to support.

Another way to learn is to seek to experience your company’s product and services as would your customers. For example, how often do CEOs of airlines fly coach and sit in the middle seat of the last row on the plane? Have they experienced the frustration and uncertainty associated with their flight being cancelled due to weather? Do they check their own bags and have they had the experience of being the last one standing at the luggage carousel waiting for a bag to materialize? Plenty of opportunity for learning and improving customer experience with our products exist if decision makers in organizations felt the frustrations experienced by customers.

A competitive advantage can also be obtained through communication. Clarity of message and ease of use are characteristics of products and services that are always welcomed. Are there things you can do to make your service easier to understand or access? Can you provide step by step guides for customers to access your service when they need it?

Yes, a price of leading is that you will be copied. Success breeds imitators. This isn’t something to lament. It can’t be avoided. It must be managed. As Pamela Slim writes in Body of Work, “When imitated, don’t retaliate, innovate. When you are great at what you do, people are bound to imitate you. Sometimes they will try to steal your intellectual property, or students, or employees, or business model, or artistic genre. It is natural to get upset when this happens. But instead of fighting with the imitator, move on to innovate the next stage of your work. If you are doing your job well, your work is constantly improving and growing. Imitate that.” Innovators internalize that in order to have any chance at leading, leaping must be done. They aren’t looking left and right and what those beside them are doing, they are daring to be different. Seymour Cray, an electrical engineer who created a number of computing breakthroughs, offered in a May 1995 interview with David Allison that “One of my guiding principles is don’t do anything that other people are doing. Always do something a little different if you can. The concept is that if you do it a little differently there is a greater potential for reward than if you do the same thing that other people are doing. I think that this kind of goal for one’s work, having obviously the maximum risk, would have the maximum reward no matter what the field may be.” Yes, there’s risk to going your own way. However, this is where the greener grass grows. Business consultant and author, Dane Jensen has observed that “The ability to adapt is what makes us future-proof, and what separates individuals and teams that endure from those who are replaced.” Look to learning to lead both your business’ and your personal ability to endure and be future-proof.