Can you (and others in your firm) accurately identify and describe your competition?
In my experience (with hundreds of organizations and thousands of professionals) the common answer is no. Truth is, most professionals don’t spend enough time focusing on the competitive context of their business. Competitors they do know (the handful of firms seen at pre-bid meetings, conference sessions, or discussed in client conversations) represent only a small part of the story. Still, properly assessing the full range of competitive threats is a must to fully appreciate the market, and to plan for a purposeful and distinctive response. Here are four main sources of competitive threat:
Known Competitors – While most professionals can name a few of their more obvious direct competitors, they often misunderstand these organizations and their strength and weaknesses. Individual perspectives are wrong – born of bad information, bias, or belief. Many times I’ve heard managers emphatically describe a competitor as this or that, while I know (because I’ve worked with that other firm) that it simply isn’t true. The solution? Investing more time and effort in learning about each competitor, and accurately identifying the meaningful differences between firms.
Unknown Competitors– For every known competitor, there are usually a half a dozen or more others that no one knows anything about. This happens because professional sectors are highly fragmented, with thousands of firms and individuals. Moreover, most professionals are frankly quite provincial – narrowly focused on specific services, markets, and geographies. In the Fast Future! world ahead, this narrow focus is becoming increasingly risky, as competitive threats appear from new business models, new delivery systems, and new geographical and experiential origins. Successful professionals must pay more attention to the wider range of potential competition from a rapidly changing, evolving, and global market.
Do It Yourselfers – In many areas – particularly when specific skills or credentials are not required – the client can themselves be a potent competitive threat, in that they pursue the change effort alone as a do-it-yourself project. Management consultants (for instance) often face a large DIY contingent, as company leaders address business problems as an inside job. Other professionals – architects, engineers, environmental consultants, lawyers, business consultants and trainers – find too prospective clients who want to lead initiatives themselves, or at least want to direct and control the work of outside professionals.
Do Nothings – For most, the biggest competitive threat (and largest market opportunity) comes from those prospective clients who stall, vacillate, freeze, postpone, and (effectively) do nothing. Many business and organization improvement initiatives are strategicallyimportant, but not urgent in the short term. Not surprisingly, these efforts are then postponed – ostensibly for a month, or a quarter, but all too often for much longer. Perhaps the firm’s greatest market potential is creatively convincing more of these potential customers to engage and commit to hiring professionals to lead important business projects. (As an example, consider those design and construction firms currently creating innovative funding sources and approaches, and thus addressing today’s most challenging obstacle to AEC market development. Many clients need this expertise!).
For many, it’s time to begin making plans and preparations for the company’s business planning activities this fall and winter. Competitive intelligence (research and analysis) is an important foundation for this effort, so let me encourage you to pursue this year a more robust effort here. Dig deeper to better understand existing and known competitors, and reach further to identify and analyze possible competitors in new geographies, in adjacent markets, providing complementary or substitute services, or up and down the established supply chain.
Additionally, consider how your firm should approach the ‘do it yourself” and/or ‘do nothing’ segments of your market. Perhaps additional information, thought leadership, or direct education is required? Or maybe it’s more about marketing communication, brand awareness, and competitive positioning for the firm? What strategies or tactics will work best to convince these prospective clients that they’re better off with you than without?
Enjoy your summer (and I’m sure a well-earned rest) relaxing with family and friends. I’m spending some time myself off the grid this month (or at least trying), reading new books, attending professional development conferences, and updating my own market and competitive intelligence. And I’m already excited about what’s in store – working with organizations and leaders this fall in pursuit of extraordinary outcomes in growth, profit, and success – pushing into the Fast Future! ahead.