I don’t know if you remember the classic film “Butch Cassidy And The Sundance Kid,” but I thought of it as I was reading this morning. Paul Newman and Robert Redford play the title characters who spend much of the movie being pursued by a group of men determined to bring them to justice. Every time they think they’re in the clear, the posse turns up again, at which point Newman or Redford asks “who are those guys?”
I suspect that a number of my former colleagues in television have had a similar experience over the last few years. I remember having one back in the 1990’s when ESPN became a major presence in sports. In the late 1980’s, we used to laugh about them at our TV sports sales meetings. After all, even though the industry, spurred on by the 1984 Cable Act, was wiring the country like crazy, cable was barely in half the homes. Even as late as 1992, Springsteen told us there were 57 channels and nothing on.
Then BOOM. TV ratings started to dive and cable ratings started to climb. The peach baskets the broadcast networks used to stick out the window and fill up with money started to take a lot longer to fill up. Who were those guys? Well, we identified our competition and started to extract payments from cable carriers just as our cable brethren did. Things we different but more stable, and the broadcasters began buying the cable content providers.
Things continued to change. I’ll let the CEO of Turner (as quoted in Digiday) explain what happened next:
All of a sudden, our biggest competitors are no longer Disney, Fox, NBC, CBS and other networks; it’s these “digital companies” that are coming in and taking two-thirds of all digital ad revenues and 85 percent of the marginal growth in digital ad revenues.
Who are those guys? The point that any business can take away from the TV experience is this. Someone is always chasing you. You have something they want, whether it’s customers, market share, technology, data, or just plain attention. Like the posse, they’re going to be relentless. Unlike the posse, it’s never going to be the same guys all the time. You need to be attentive and take countermeasures, hopefully not like Butch and Sundance do by jumping off a cliff.
This Foodie Friday I’d like us to think about something you’ve probably seen happen in your town. A restaurant will offer a dish that becomes insanely popular and suddenly everyone is offering their take on it. Cronuts, dishes with foams instead of sauces, or even stuffed burgers (Juicy Lucy’s) are examples. It’s not just restaurants either. One soda brand goes “clear” and suddenly everyone has a “clear” or “crystal” or something similar. The supermarket is stuffed to the gills with innovative products and the several follow-ons produced by competitors.
What does this show us? That businesses pay attention to their competition and are tracking what the other guy is doing. That’s good and important. After all, listening is a fundamental skill. Listening, however, isn’t necessarily reacting. Tracking isn’t following.
It’s not just in the food business. When Ecco had huge success with their hip spikeless golf shoes, suddenly every shoe company had a version. Of course, what the other guys missed was Ecco’s fashion sense, and some of the products were as bad as just wearing tennis shoes to play golf. Microsoft wasted a lot of time and money following Apple everywhere and producing their own versions of Apple products. Still using your Zune?
If you’re going to do your version of a competitor’s product, the impetus for that should be your customers’ expressions of need and not some knee-jerk reaction to what the competitor is doing. First, you might not understand how well the product is selling for the competition. Second, you don’t know what their costs are to produce the dish. Third, even if you do know the previously mentioned data points, you might produce an inferior version which damages your reputation and enhances that of the competition. Finally, and most importantly, follow your customers. Are they defecting to some other brand? Why? Is it to the new product or because you’ve taken them for granted in your haste to follow the other guy rather than them?
Paying attention to what the competition is doing is important but following them can be fatal. Follow your customers, not your competitors.
Filed under Consulting, food
I expect most of you have heard the old joke about the campers and their encounter with a bear.
(Photo credit: Wikipedia)
However, on the off-chance you haven’t, the gist of it is that two campers cross paths with a bear. As the angry bear begins charging out of the woods towards them, the first camper starts putting his sneakers on. The other camper screams, “It’s no use, we’ll never be able to outrun the bear!” The first camper yells back, “I don’t need to outrun the bear, I just need to outrun you!”
A number of folks use that as a business analogy to say that in most business categories, we need only to beat our competition to survive. I disagree. By thinking about surviving or “outlasting” the competition, the focus is on the short-term (we need to run only as fast as the other guys) rather than building for the long-term. Focusing on the other guys as the standard might just mean you’re being dragged down rather than creating enough of a gap so as to make them non-entities. After all, what is that bear protecting and what kind of opportunity does it present?
The auto industry is a great example. For years, the US car companies built cars that were responses to what the other guy had to offer. The standards of production in terms of fit and finish were OK. It was pretty much a race to stay slightly ahead of one another. Then the Japanese auto invasion hit and suddenly there was a different standard in terms of quality and innovation. It was much higher as measured by independent firms such as J.D. Power. The domestic manufacturers’ share of business dropped quite a bit – imports offered better quality and more car for the money. Because they were focused on outrunning one another rather than the foreign bear, they almost got killed. Had they been focused on an altogether different standard – the one that asks “how can we build something that’s great” who knows what might have been.
Let’s assume (hopefully correctly) that you or your company is really passionate about what you do. You are delivering a great product or service and you have a path to profitability (or maybe you’re even well down that road). What piece of that equation involves a standard set by others?
Stop trying to outrun the other guys and figure out why you’re running in the first place. Maybe outrunning the bear isn’t the best strategy or the highest standard. What do you think?
The Ryder Cup finished up this morning and it really doesn’t matter for whom you were rooting. If you love sport – and I do – this was one to remember. The Euro side took a 3 point lead (which is pretty big in things such as these) into the last round of competition and the event went down to the next to last hole of the final match. Both sides can walk away with heads held high but there’s more to my choosing to write about this and here’s why. Continue reading
I’m really sorry the World Cup is over. It’s amazing to me how the intensity of the event starts out at a high level and just keep growing, reaching its apex during the final, as it did yesterday. Two sides determined to win at all costs and bring home glory. Ah, competition!
Any yet, in every World Cup game we get a business lesson when someone gets hurt. Continue reading
A food post and it’s not Friday? What happened? Well, the Top Chef finale aired last night and of course I have a few thoughts. Not just on the food either since there was something that stuck me about last night and, in fact, the entire season that is a great lesson for people in business. It’s something I’ve noticed about younger people in general and since most of the competitors are under age 30 I’m hoping that it’s indicative of how this generation thinks. Continue reading