Home > Articles

  • Print
  • + Share This
This chapter is from the book

People as Competitive Advantage

Lots of companies claim that "people are our competitive advantage." It's funny when they make this claim because many of the people who lead those companies don't know what it means. In a classroom full of business leaders from different companies, most of them raise their hands when asked, "How many of you work for a company that says people are its competitive advantage?" But ask one of them what that really means at his or her company and you don't get a good answer. You often get that deer-in-the-headlights blank stare. Or you get what I call a B-minus answer that sounds like this:

  • "Well, our people do everything. When you call and order from us, who answers the phone? Our people. And who delivers the product? Our people. So, people are our organization. We are nothing without our people."

But it's sort of fun to ask the question: Doesn't your competition also have people? People in competing companies answer the phone and deliver product, right? This is a little like saying that electricity is your competitive advantage. No doubt, it's really useful to have electricity. With it, you can use computers and lights. It would be hard to envision running your organization without electricity, but electricity does not give your organization a competitive advantage because your competitors have electricity too. So, sure, having employees do things is valuable, but that doesn't make them your competitive advantage.

It's also funny that many of the very leaders who claim that people are their competitive advantage put little personal energy into building their workforce. They hire people after 30-minute interviews based on gut feel about "fit." They race through performance evaluations to get them out of the way until next year so they can get back to their "real work." Their top HR folks are accountants who got saddled with payroll 23 years ago and stuck around long enough that they eventually were promoted to head of HR. Their VP of HR couldn't cut it in sales so he got sent to HR where he "couldn't do too much damage." As a result of these career inroads, the person in charge of your most important asset may not do much thinking about competitive advantage, and may not even know who your competition is. There may not be anyone in your company thinking about the ways your people need to be strange.

How Can a Workforce Give an Organization a Competitive Advantage?

Three things: First, your workforce obviously must create something valuable to the marketplace—that is, there must be customers who want or need what your workforce does or creates, who are willing to pull dollars out of their wallets or budgets and give it to your company. However, if there is money to be made doing something, then other organizations are likely to do it too. Even if you are the first company to offer the desirable product or service, competitors will be drawn to the money like moths to light. Using a workforce to create something valuable simply represents the table stakes of being in business, not for beating down competition.

Second, your workforce also must create something rare, something unique that sets your organization apart. Your workforce needs to create some special sauce that makes customers say, "Sure I could get this from seven different companies, but this one does this certain thing that I like best, so I'm giving them my money." It might be the lowest price, the quickest delivery time, or the comfort of talking to a person who remembers customers' names and what they usually order. It might be any number of things, but there needs to be something that differentiates your organization and adds special value in the minds of customers.

Third: If your organization's special sauce—the unique valuable thing that you offer—is easy for competitors to copy, then you don't have a sustained competitive advantage. Wal-Mart was an early initiator of some supply chain management practices that were quite valuable and rare. By partnering with suppliers and pushing much of the stock management onto them, Wal-Mart created value for customers. How? It was more likely that product would be in stock when consumers walked in the door. It allowed Wal-Mart to lower prices because they didn't need to pay as many people to manage the stock, and also because suppliers could offer cheaper prices to Wal-Mart when they had more lead time. The supply chain process gave Wal-Mart a competitive advantage, but only for a little while because other large retailers were able to copy Wal-Mart's practices. To develop and keep a competitive advantage over a long period of time, you need to offer something valuable, rare, and hard to imitate—something that competitors can't see or maybe can't understand. Or perhaps even if they can see it and understand it, they are not willing or able to actually do it in a way that customers appreciate. For your workforce to be a sustained source of competitive advantage, your workforce needs to do something that is valuable and unique in customers' eyes and hard for competitors to imitate.

I call this a strange workforce: Definitely out of the ordinary and unexpected3; unusual or striking4; slightly odd or even a bit weird.5 If you want to beat down competition and win, then you want to cultivate a strange workforce that is obsessive—intensely preoccupied with something. Obsessing means worrying about something unevenly, much more than other things and much more than other normal people who might be mildly concerned with that same thing. You want competitors to look at your workforce, shake their heads half in wonder and say, "We wouldn't be able to do that." Have you ever worked with someone brilliant who seemed to have a "strange genius," "unique gift," or "weird instinct" for creating results? You knew you could never keep up with them because they were so talented and so obsessed that they made the others look like they are just playing around. You want to create that same reaction in your competitors and customers, but with your workforce. Are you starting to get turned on to strange? You want to be strange.

Naturally, not just any type of strange obsession will win your customers' business. Your workforce needs to obsess on things that customers value but that other workforces—in particular, your competitors' workforces—do not obsess on. Obsessing, for example, about whether or not your rotors are going to arrive next week so that your airplane engine can be shipped to the customer on time (Durham Engine Facility). Or whether the new cell phone style is really as thin and sleek as physically possible (Motorola). Or about exercise and working out and toning the body every day with the right athletic equipment (Nike). Or providing open source software so that the world is not captive to Microsoft (Red Hat). Cultivating a strange workforce that obsesses about things that customers care about is a necessary condition if you are going to get a sustained competitive advantage through your workforce. What does your workforce obsess about? What could they obsess about?

Where Will I Get My Strange Workforce?

How do you think you might build and maintain a strange workforce? Is it simply luck? Let's just start off by saying it's really unlikely that you can build a strange workforce if your organization deals with the workforce the same way as other organizations do. It is delusional to expect your employees to be extraordinary and differentiate your organization if your employee systems are basically the same as other organizations.

Your workforce systems need to be as strange as the workforce you hope to create. All your people management processes should result in a strange system that gets noticed by employees and makes them obsess on the things that customers care about the most. From this perspective, the processes your organization uses to manage people must be part of your unique way of competing. This means that job applicants and new employees should perceive your people systems as strikingly different and unexpected, slightly odd, and even a bit weird. Your people systems should inform employees and potential employees how to act so that customers notice something different and reach for their wallets again and again. For example, your hiring systems should be strange enough that some applicants who go through your process say to themselves, "This organization is too strange for me," and go work somewhere more normal...like your competitors.

As a leader, how do you know whether your people systems are set up to do this? You need to gather data that you can use to create your special sauce. And guess what? You can't use the garden-variety HR metrics that most organizations use. For example, there is a wood delivery company with a strategy that its truck drivers develop strong social ties with clients while making deliveries—to develop trust and gather information about upcoming shipment issues. To execute this strategy, the company actually needs to hire customer service reps who happen to drive 18 wheelers as well. Does it make sense for this company to hire normal truck drivers just like all the other trucking companies do, when they want to produce their own special sauce of networking and customer intimacy? Does it make sense for the recruitment metrics to be "cost of hire" and "days position is open?" Does it make sense for the hiring metrics for this job to be "years of trucking experience" and the pay metric to be "market midpoint for truck drivers" when the goal is to hire a strange, rare breed of drivers that is going to help execute a unique strategy? More likely, this company needs to have unique hiring metrics that reveal whether they are hiring drivers who are strangely attracted to a job where they are expected to get to know the plant managers and learn something when they deliver. It might take considerably longer to find that special combination of traits, and you might need to pay substantially more for a customer service rep-turned-trucker.

Doesn't sound like rocket science, does it? In fact, it sounds a lot like common sense. However, this type of system alignment is not very common at all. As you know, the customary practice is for companies to benchmark and use cost controls on people systems so that every company looks and feels to employees like every other company. And from this copycatting, race-to-the-lowest-cost approach to workforce management, a leader expects to produce a rare, unique workforce that will differentiate their company and build a competitive advantage? Good luck with that.

  • + Share This
  • 🔖 Save To Your Account

InformIT Promotional Mailings & Special Offers

I would like to receive exclusive offers and hear about products from InformIT and its family of brands. I can unsubscribe at any time.

Overview


Pearson Education, Inc., 221 River Street, Hoboken, New Jersey 07030, (Pearson) presents this site to provide information about products and services that can be purchased through this site.

This privacy notice provides an overview of our commitment to privacy and describes how we collect, protect, use and share personal information collected through this site. Please note that other Pearson websites and online products and services have their own separate privacy policies.

Collection and Use of Information


To conduct business and deliver products and services, Pearson collects and uses personal information in several ways in connection with this site, including:

Questions and Inquiries

For inquiries and questions, we collect the inquiry or question, together with name, contact details (email address, phone number and mailing address) and any other additional information voluntarily submitted to us through a Contact Us form or an email. We use this information to address the inquiry and respond to the question.

Online Store

For orders and purchases placed through our online store on this site, we collect order details, name, institution name and address (if applicable), email address, phone number, shipping and billing addresses, credit/debit card information, shipping options and any instructions. We use this information to complete transactions, fulfill orders, communicate with individuals placing orders or visiting the online store, and for related purposes.

Surveys

Pearson may offer opportunities to provide feedback or participate in surveys, including surveys evaluating Pearson products, services or sites. Participation is voluntary. Pearson collects information requested in the survey questions and uses the information to evaluate, support, maintain and improve products, services or sites, develop new products and services, conduct educational research and for other purposes specified in the survey.

Contests and Drawings

Occasionally, we may sponsor a contest or drawing. Participation is optional. Pearson collects name, contact information and other information specified on the entry form for the contest or drawing to conduct the contest or drawing. Pearson may collect additional personal information from the winners of a contest or drawing in order to award the prize and for tax reporting purposes, as required by law.

Newsletters

If you have elected to receive email newsletters or promotional mailings and special offers but want to unsubscribe, simply email information@informit.com.

Service Announcements

On rare occasions it is necessary to send out a strictly service related announcement. For instance, if our service is temporarily suspended for maintenance we might send users an email. Generally, users may not opt-out of these communications, though they can deactivate their account information. However, these communications are not promotional in nature.

Customer Service

We communicate with users on a regular basis to provide requested services and in regard to issues relating to their account we reply via email or phone in accordance with the users' wishes when a user submits their information through our Contact Us form.

Other Collection and Use of Information


Application and System Logs

Pearson automatically collects log data to help ensure the delivery, availability and security of this site. Log data may include technical information about how a user or visitor connected to this site, such as browser type, type of computer/device, operating system, internet service provider and IP address. We use this information for support purposes and to monitor the health of the site, identify problems, improve service, detect unauthorized access and fraudulent activity, prevent and respond to security incidents and appropriately scale computing resources.

Web Analytics

Pearson may use third party web trend analytical services, including Google Analytics, to collect visitor information, such as IP addresses, browser types, referring pages, pages visited and time spent on a particular site. While these analytical services collect and report information on an anonymous basis, they may use cookies to gather web trend information. The information gathered may enable Pearson (but not the third party web trend services) to link information with application and system log data. Pearson uses this information for system administration and to identify problems, improve service, detect unauthorized access and fraudulent activity, prevent and respond to security incidents, appropriately scale computing resources and otherwise support and deliver this site and its services.

Cookies and Related Technologies

This site uses cookies and similar technologies to personalize content, measure traffic patterns, control security, track use and access of information on this site, and provide interest-based messages and advertising. Users can manage and block the use of cookies through their browser. Disabling or blocking certain cookies may limit the functionality of this site.

Do Not Track

This site currently does not respond to Do Not Track signals.

Security


Pearson uses appropriate physical, administrative and technical security measures to protect personal information from unauthorized access, use and disclosure.

Children


This site is not directed to children under the age of 13.

Marketing


Pearson may send or direct marketing communications to users, provided that

  • Pearson will not use personal information collected or processed as a K-12 school service provider for the purpose of directed or targeted advertising.
  • Such marketing is consistent with applicable law and Pearson's legal obligations.
  • Pearson will not knowingly direct or send marketing communications to an individual who has expressed a preference not to receive marketing.
  • Where required by applicable law, express or implied consent to marketing exists and has not been withdrawn.

Pearson may provide personal information to a third party service provider on a restricted basis to provide marketing solely on behalf of Pearson or an affiliate or customer for whom Pearson is a service provider. Marketing preferences may be changed at any time.

Correcting/Updating Personal Information


If a user's personally identifiable information changes (such as your postal address or email address), we provide a way to correct or update that user's personal data provided to us. This can be done on the Account page. If a user no longer desires our service and desires to delete his or her account, please contact us at customer-service@informit.com and we will process the deletion of a user's account.

Choice/Opt-out


Users can always make an informed choice as to whether they should proceed with certain services offered by InformIT. If you choose to remove yourself from our mailing list(s) simply visit the following page and uncheck any communication you no longer want to receive: www.informit.com/u.aspx.

Sale of Personal Information


Pearson does not rent or sell personal information in exchange for any payment of money.

While Pearson does not sell personal information, as defined in Nevada law, Nevada residents may email a request for no sale of their personal information to NevadaDesignatedRequest@pearson.com.

Supplemental Privacy Statement for California Residents


California residents should read our Supplemental privacy statement for California residents in conjunction with this Privacy Notice. The Supplemental privacy statement for California residents explains Pearson's commitment to comply with California law and applies to personal information of California residents collected in connection with this site and the Services.

Sharing and Disclosure


Pearson may disclose personal information, as follows:

  • As required by law.
  • With the consent of the individual (or their parent, if the individual is a minor)
  • In response to a subpoena, court order or legal process, to the extent permitted or required by law
  • To protect the security and safety of individuals, data, assets and systems, consistent with applicable law
  • In connection the sale, joint venture or other transfer of some or all of its company or assets, subject to the provisions of this Privacy Notice
  • To investigate or address actual or suspected fraud or other illegal activities
  • To exercise its legal rights, including enforcement of the Terms of Use for this site or another contract
  • To affiliated Pearson companies and other companies and organizations who perform work for Pearson and are obligated to protect the privacy of personal information consistent with this Privacy Notice
  • To a school, organization, company or government agency, where Pearson collects or processes the personal information in a school setting or on behalf of such organization, company or government agency.

Links


This web site contains links to other sites. Please be aware that we are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of each and every web site that collects Personal Information. This privacy statement applies solely to information collected by this web site.

Requests and Contact


Please contact us about this Privacy Notice or if you have any requests or questions relating to the privacy of your personal information.

Changes to this Privacy Notice


We may revise this Privacy Notice through an updated posting. We will identify the effective date of the revision in the posting. Often, updates are made to provide greater clarity or to comply with changes in regulatory requirements. If the updates involve material changes to the collection, protection, use or disclosure of Personal Information, Pearson will provide notice of the change through a conspicuous notice on this site or other appropriate way. Continued use of the site after the effective date of a posted revision evidences acceptance. Please contact us if you have questions or concerns about the Privacy Notice or any objection to any revisions.

Last Update: November 17, 2020