What’s Your Competitive Advantage?

Business strategy is all about competitive advantage.  An brilliant strategy is be both unique and sustainable.  If it’s not unique, then you’re simply running the same race as your competitors.  And if it’s not sustainable, then it will be replicated and no longer be an advantage.

For some companies, technology, innovation and operational excellence are good sources of competitive advantage.  Making them sustainable is the bigger challenge.

One of the smartest moves Kodak made had nothing to do with those sources of competitive advantage.  They already were low-cost producers of high-quality film; but so was Fuji.  Somehow they needed to differentiate their box of film from Fuji’s, in a way that loaded-up value for consumers.  What they did was to shift the focus from film to memories by developing marketing messages about “Kodak moments.”  It created tremendous value in the mind of consumers — value that lasted until digital cameras changed both the technology and the use of images.

What are you doing to create sustainable value for your customers?

Senior Management Incentives in the News

Strategic incentives are a good idea at the top.  But getting everyone one in a large company on the same page is difficult, and it doesn’t always work.  Here are a few current examples:

  • United Airlines’ CEO Oscar Munoz reportedly has $500,000 of his bonus tied to customer satisfaction questionnaires.  You’d hardly know it from the nearly unbelievable physical ejection of a passenger, and United’s follow-up to the incident.  Some background:  In 2010, United began a botched merger with Continental.  In 2012, United had 43% of all airline consumer complaints, and has been a leader in complaints since then.  On January 14, 2016 Bloomberg’s article, “United’s Quest to be Less Awful” was published.  Clearly things have needed to change for a long time.
  • Apple’s Tim Cook made less money last year (only $10 million in salary and bonus!) than the year before.  That reflects the downward trend of the iphone business, which might pick up this year with a redesigned phone.  But Cook isn’t betting on riding the iphone into the future.  As in the past, the company’s prospects are secret, but you can bet they are working hard on innovation and disruption in other industries, continuing the path that Apple has taken throughout its history.  That’s what his focus and challenge is, and what his future bonuses will depend on.
  • Ford Motors’ board wants CEO Mark Fields to accelerate the company’s transformation and profitability beyond SUVs and pickups.  They’ve put into place a $2.5 million “strategic incentive grant” designed to reward both innovation and growth.  He received a reduced bonus last year as revenue and quality slumped.  The board realizes that making the core business more profitable won’t be enough — they need innovative solutions for the future.

Obviously, sometimes incentives get everyone on the same page, and sometimes they don’t.  Even the largest companies can’t seem to nail it, in part because transforming such large companies is a significant challenge.  But significant incentives can provide significant focus at the top.

What kinds of incentives are you using at the top?  Are they operational or strategic?

© Copyright 2017  Bob Legge

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Bob Legge provides organizations with the ability to exceed their most ambitious goals.  I work with leaders of Fortune 500 companies, small and mid-size companies, nonprofits, education, and government. Together, we drive strategy, lead successful change, develop high performance cultures, improve individual and organizational performance, and produce faster, sustainable growth and value.  Contact him at  bob.legge@leggecompany.com

Powerful Ideas to Improve Your Leadership

From many years of coaching executives, here are five pointers for becoming a better leader:IMG_4487

  1. Hire people who are better than you in their discipline; not subordinates.
  2. Focus yourself on key priorities — move a few things forward a mile rather than a lot of things forward an inch.
  3. Focus your people on results; not activities.
  4. Demand commitment; not compliance.
  5. Encourage and reward open, honest, and insightful thinking; not going with the flow.
  6. Expect people to fail now and then. Mistakes are part of learning.

© Copyright 2017  Bob Legge

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Bob Legge provides organizations with the ability to exceed their most ambitious goals.  I work with leaders of Fortune 500 companies, small and mid-size companies, nonprofits, education, and government. Together, we drive strategy, lead successful change, develop high performance cultures, improve individual and organizational performance, and produce faster, sustainable growth and value.  Contact him at  bob.legge@leggecompany.com

Do This Before the End of February

It’s February and you’ve got most of the year still ahead.   See if you can answer these questions clearly and briefly:

  1. What is your strategy?
  2. What is the over-arching vision you have for your company?
  3. What is the major theme, or themes, you want your people to run hard at this year?
  4. What are your top three priorities for the company?

Your people want to know how to move forward, what to base their day-to-day decisions on, and how to know they are on-track.  If you’ve put together a simple roadmap or strategy, it will be found posted in their work areas, cubicles and offices.  More complex strategies are in PowerPoint presentations or binders and they rarely get looked at.  So if you can answer the four questions above, make sure your people know the answers too.  If you can’t answer them, you need to get to work.  As I said, most of the year is still ahead.

© Copyright 2017  Bob Legge

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Bob Legge provides organizations with the ability to exceed their most ambitious goals.  I work with leaders of Fortune 500 companies, small and mid-size companies, nonprofits, education, and government. Together, we drive strategy, lead successful change, develop high performance cultures, improve individual and organizational performance, and produce faster, sustainable growth and value.  Contact him at  bob.legge@leggecompany.com

Three Imperatives of Profitable Growth

From over 30 years of working with organizations of all sizes and in many industries on improving business outcomes especially growth and profits:

  1. The most valuable part is having a plan that focuses on both distinctive strategy and operational excellence.
  2. The hardest part is sticking to the plan by following-up on performance commitments including position accountabilities, projects, and key operating measures.
  3. The chief downfall is not aligning the organization with plan. Successful companies have one plan with everyone understanding their role in getting results.  Also-rans may have a plan, but they let organizational functions and departments do their own thing.

© Copyright 2017  Bob Legge

~~~~~

Bob Legge provides organizations with the ability to exceed their most ambitious goals.  I work with leaders of Fortune 500 companies, small and mid-size companies, nonprofits, education, and government. Together, we drive strategy, lead successful change, develop high performance cultures, improve individual and organizational performance, and produce faster, sustainable growth and value.  Contact him at  bob.legge@leggecompany.com

Beware Organizational Arsonists

An arsonist is someone who finds little things to pick on, to call attention to, and to question.  They start small  “fires” here and there requiring time and attention to put them out.  The fires they start are not part of continuous improvement, they are distractions and they divert resources away from the strategy and the important and urgent tasks.  Some organizations even appoint fire fighters to put out the fires caused by the arsonists.  You don’t need arsonists or fire fighters.

Building Competitive Advantage

An important focus for any business strategy is to establish a competitive advantage for the firm.   The two primary ways to do this are to be the low-cost producer and to be significantly different from your competitors in a way that customers value.  The problem with being the low-cost producer is that eventually your competitors will match your prices.  It’s a very difficult advantage to retain.  When you compete on price, you’ve become a commodity — clearly not a competitive advantage.

Differentiating yourself from competitors isn’t always easy, but it can provide much better profits and be much longer-lasting.  There are many ways to differentiate, from technological and marketing innovation to product configuration, customer experience, and even organization culture.   Additionally, differentiation can be extremely difficult for a competitor to replicate.

What is your competitive advantage?

© Copyright 2016  Bob Legge

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Bob Legge provides organizations with the ability to exceed their most ambitious goals.  I work with leaders of Fortune 500 companies, small and mid-size companies, nonprofits, education, and government. Together, we drive strategy, lead successful change, develop high performance cultures, improve individual and organizational performance, and produce faster, sustainable growth and value.  Contact him at  bob.legge@leggecompany.com