Take the chance to learn from the competition

Wonderful. I think it is just great that the creator of the quarter-pounder with cheese is now launching not only veggie burgers, but is banning meat products in some of their outlets. Applause.

Now, let’s contrast that with the recent news that Steve Ballmer is retiring as CEO of Microsoft. In the news articles that accompanied the announcement, we learned that Microsoft employees were banned from using or bringing to the office Iphones or Ipads. They were required to use only Microsoft products. In fact, Ballmer bragged in one interview how he banned his own children from using Apple products.

How can a company get better if it doesn’t study the competition? How does it improve if it doesn’t give consumers the products that they want?

By forbidding employees from using the competition, a company loses the best opportunity to learn about its own weaknesses. None of us are perfect; all of us, and all of our companies, can get stronger. But we cannot do this in isolation; we can only improve with competition.

Charles Darwin, 150 years ago, in his book “Origin of the Species”, wrote about the concept he called “natural selection”. After reading the book, the economic philosopher Herbert Spencer described the concept as the “survival of the fittest”. Whatever we want to call it, we are all familiar with the general notion that people, as well as organisations, get stronger through adversity. “Out of life’s school of war: what does not destroy me, makes me stronger” as Friedrich Nietzsche put it in his book “Twilight of the Idols”.

The market knows this. After the announcement of Ballmer’s retirement Microsoft stock shot up 7 per cent. McDonald’s stock is now at an all-time historical high.

What do we learn from all this? First, we need to deeply understand the competition. This means not just doing a SWOT analysis on a piece of paper, but using their products, eating their food, flying their airlines and sleeping in their hotels.

Second, we need to listen to customers: not only our loyal users, who will tell us only positive things about our products and services, but also our rejecters (people who have used our products and have stopped) and our non-users (people who have never tried our products). 

We learn the most from adversity, and people who have never tried or have rejected our products are the most adverse potential customers. These people, who have rejected or never tried our products, are using the competition. And if we don’t also use the competition, how can we understand why certain customers have abandoned us?

It doesn’t take any brains to realize that, with 30 per cent of the population vegetarian, opening “meatless” outlets in India is a winning business proposition. It takes guts, however, to recommend this to management based in Chicago, who probably eat meat every day. It also doesn’t take much brainpower to realise that, if you and your employees never use the competitive products, you are giving up one of your best learning opportunities.

So the lessons are clear: use your competitors’ products, and talk, as often as possible, with people who are not your customers. Then create a product or service that will win them over.

The time to start is now.

 

Eric Rosenkranz is chairman and founder of e.three (www.ethree-asia.com), a strategic advisory helping companies in Southeast Asia develop growth-oriented strategies. He can be reached at [email protected].