Accepting the Challenge of the Copycat Economy
Managers like you are faced with massive and continuous challenges which could include some or all of the following:
- "Extreme" competition
- Excess capacity
- Mature and saturated markets
- Thinning margins
- Less customer loyalty
- Customers increasingly making buying decisions primarily by price
- Customers raising the bar on their minimal expectations regarding price, quality, and performance
- Analysts and investors growing pessimistic about corporate prospects
- For many companies, the real possibility of outright bankruptcy or liquidation
The challenges are daunting. But consider the payoff to breaking from the pack. When an organization's products and services are not commodities, when they're not seen as "me too," when they're viewed by investors as truly compelling, and when they're perceived by customers as truly value-adding, the correlates are also clear:
- A clear differentiation from competitors
- Rapid, sustained, and real growth (not the shaky kind that often results from megamergers)
- Higher margins
- Higher stock prices and market caps
- Boosts in market buzz
- Reputation as the employer and partner of choice
- More customer loyalty
- An optimistic and creative work environment
- A far easier sales and marketing effort
- An agile, aggressive infrastructure that is positioned for next-generation growth
Stakeholders are attracted to companies that break from the pack. Investors bet on companies that can increase future earnings and cash flows. Customers stay loyal and are often willing to pay a premium if they can count on unique, exciting price-value from a company's offerings. The best and brightest talent migrates to these companies because the climate is usually intellectually exciting and financially rewarding.
The implication is clear. In today's Copycat Economy, the primary strategic challenge for any leader and any organization is to stop and reverse the inevitable slide toward the commoditization and imitation of their current products and services.
And even that is not enough. Motorola's Ed Zander has correctly noted that "the market wants not just one good quarter. It doesn't even want a great quarter. It wants 6 good quarters or 10 good quarters or 12 good quarters." He's talking about sustainability, necessary to stay ahead of the pack. In today's Copycat Economy, those companies that are able to continually decommoditize and unimitate are the ones that will create sustained, accelerated value for their shareholders and customers. The remaining chapters show you how to achieve these goals.
There's an old joke about two hikers in the woods who come upon a huge grizzly bear. As the bear prepares to attack, one of the hikers reaches into his backpack and draws out a pair of running shoes. As he's putting them on, his colleague says, "Why are you doing that? You'll never be able to outrun a grizzly." Whereupon the first fellow replies, "I don't have to outrun the bear. I just have to outrun you."
It's not so funny anymore, for in the Copycat Economy, everyone seems to run at the same speed, and the bear catches up anyway. Regardless of whether you're in a "business to consumer" or "business to business" market, whether you're a for-profit or not-for-profit organization, whether you're in the private or public sector, you're under enormous expectations and pressures. There really is a grizzly bear in front of you—it's not a delusion. To outrun the bear, to break from the pack, you've got to run smarter, run a different path, run in a way that nobody's run before. You know the alternative.
The challenge is considerable. So are the opportunities. The trifecta of deregulation, globalization, and technological advance creates a wide-open, unexplored terrain that is right in front of anyone who has the gumption to explore it fearlessly and build upon it. No organization today, regardless of its current size and financial muscle, has a lock on the future, so the possibilities for you are huge.
Your goal, to paraphrase Barry Tarasoff, the research director at the midsize Wall Street firm S. G. Cowen, is to create something with unique value that cannot be easily duplicated. Your mission, to quote IBM's Sam Palmisano, is to lead with the spirit of breakthrough: "While they share many attributes, there is one thing that sets all great companies apart: They define and lead the agendas for their businesses."
Are you willing to be a new force in your industry? If you say yes, then you'll soon be sprinting from the starting line, and you're now ready to start eliminating bad training habits described in Chapter 2.