A company’s centricity refers to the common set of ideas, values and norms used in decision making and mobilizing resources in the market. Prior posts covered the idea of centricity and four basic types of centricity as well as how you know where your centricity rests. This post covers competitive centricity.
Competitive Centricity – what are others doing and how can we beat them!
Every company faces competition. How they deal with competitive pressures determines the extent of their competitive centricity. A competitively centric company constantly compares itself to others in the market. What are they doing? Are we better than them? How can we beat them? How can we shape market terms in our favor? All are questions raised in a competitively centric organization.
Examples of competitively centric situations abound. Often described in terms of ‘wars’, such as the Cola-Wars (Coca-Cola and Pepsi), the cloud wars (AWS and Azure), the Car Wars (Toyota and GM), the cell phone wars (AT&T and Verizon), the burger wars (McDonalds and Burger King), the computer wars (Apple and PC), the M&M wars (Plain and Peanut). They make for great stories and simplify a complex world.
The simplicity of competitive centricity is appealing and debilitating.
Appealing in the sense that the world is a simple us versus them, whoever them are. Viewing the world as binary brings focus, easy measurements, and comparisons. Competitive centricity is particularly potent in the face of a crisis or market disruption – what are the others doing? How should we lead or compete against them?, etc..
Competitive centricity is debilitating. It locks a company into a single world view, a view based on what others are doing and not what customers want or need. A competitive view gives the competitor, not the company control over its strategy and destiny. The result is reaction rather than direction, paranoia rather than strategic pursuit, etc. A company that only thinks of themselves in terms of their major competitors exchanges its agency, its ability for self-determination, for simple frameworks and responses. They are puppets with the competitor pulling the strings. They are raising their exposure to disruption.
Applying a competitive lens
Competitive centricity rises to the top more situationally than consistently. It is used as a rational for action that is grounded less in customer and market realties and cemented in the ideas of us versus them. You know if you are being competitively centric when the company:
- Sees itself relative to a competitor rather than in relationship to its customers, capabilities, and performance. If you talk about the competition in terms of the color of their logo, then you are being competitively centric.
- Makes decisions based on competitive actions or reactions rather than enhancing its own value. If you are always comparing yourself, your products, your performance against another, then you have no sense of yourself.
- Uses competitor action or inaction as reasons not to do something. This robs the company of its ability to be customer centric and innovative. When the objection supports an internal power situation, then its internal centricity in a competitor wrapper.
Understanding the competition, their actions and results is an important part of leading an organization. It is one of the lenses required to win in the marketplace, when it becomes the only lens – a strategic binoculars become a limiting monocular.
Lifting your head out of the competitive sand
Competitive centricity rises to the top when the actions of others challenge a company’s current course and speed. In that way, it’s a form of internal centricity particularly as a competitor upsets internal plans and approaches. While every organization needs to be aware of and consider competitive factors, suggestions to balance competitive centricity against other factors include:
- Dive deeper into competitive actions with a lens to understand the customer aspects of the action. Are these changes driven by customer needs? What customer values that might be driving this move? Does the action represent a new value or a new context for a customer value?
- Think about the competitors internal factors that might be driving their actions. How does the action change their internal dynamics – for example the relationship between go to market and client experience. Evaluate the impact of competitor actions against your internal operations and structures.
- Assess the fit and growth of your products or services against competitors. Compare your performance against the market rather than just the past.
- Determine how your customer understanding, products and internal capabilities can change the terms of competition to your advantage and competitor disadvantages.
Competitive Centricity, marking yourself to the market without becoming subservient to it.
Competition drives markets, differentiates offerings, and gives customers choice. Orienting strategies, operations and decisions around competitive considerations make sense. Obsessing and limiting those things to just what competitors are doing does not. Recognize potential situations where competitive factors may be clouding how you see the market and most importantly how you see customers. Use the ideas in the post to avoid getting caught up in a ‘war’ of us versus them. It may be simple and appealing to see the world that way, but companies give up too much when they only seem themselves in comparison to competitors.