April 20, 2009

News & Opinion: The Three Destroyers of Differentiation by Scott McKain

By: 800-CEO-READ @ 2:44 PM – Filed under: Management & Workplace Culture

The Three Destroyers of Differentiation by Scott McKain

There was a time not too long ago when Chevy owners felt superior to those poor souls driving a Ford -- and vice versa. A person gained identification through the goods that they purchased, the stores where they shopped, the institutions where they invested -- no matter the level of price or sophistication of the product.

Now, however, over the past several years we have seen the homogenization of practically everything. The big store where I shop almost certainly appears and feels a lot like yours, no matter the logo on the door, no matter the community where it is located.

When customers perceive times are a bit tighter, they naturally want to spend their money where they sense they are receiving the highest degree of value. Certainly, they'll become more price conscious than in better financial situations. However, if you differentiate your business and yourself, you will find that a downturn is tailor-made for grabbing market share from your competitors.

If you cannot find it within you to become emotional, committed, engaged, and…yes...FERVENT about differentiation, then you had better be prepared to take your place among that vast throng of the mediocre who are judged by their customers solely on the basis of price. It is the singularly worst place to be in all of business. If you aren't willing to create distinction for yourself in your profession -- and for your organization in the marketplace -- then prepare to take your seat there in the back, with the substantial swarm of the similar, where tedium reigns supreme.

There is a trio of aspects -- called in my book the Three Destroyers of Differentiation that created the "Collapse of Distinction." Taken individually, each of these Destroyers creates a compelling challenge for you in the marketplace. When combined, they have a synergistic and destructive impact on your industry, your organization...and you!

The first Destroyer is: Copycat Competition. When my competitor creates a point of distinction, my natural inclination is to either:

a) Copy/imitate the improvement; or,

b) Attempt to incrementally improve upon their advancement

Notice the distinction problem with this paradigm: My efforts are based upon what my competitor is doing -- NOT what my customers may truly desire! And, in most cases, both your advancements and mine have been evolutionary -- NOT revolutionary. We have arrived at the point where most organizations focus more on the competition than their customers.

The second Destroyer is: New -- and Better -- Competition. If you are like most, your reaction to Destroyer Two -- cultural, technological and societal change bringing new competitors to your doorstep -- is to probably execute precisely the wrong strategy. You figure if most of your customers are going to McDonald's, you try to "out-McDonald's" them to restore your business. Unfortunately -- and despite your best intentions -- imitation gains you little traction in the marketplace.

The third Destroyer is: Familiarity Breeds Complacency. My Mom told me that, "Familiarity breeds contempt." As much as I hate to dispute her advice, this isn't true. When something, like a product or service is present so much that it becomes thoroughly familiar and is boundlessly available, we do not then begin to scorn it, hate it, or express disdain towards it. Instead, we begin to take it for granted. We become complacent and presume it will always be around.

What a combination! You may be:
  1. Creating only incremental improvements, so there is nothing to distinguishes you from your competition
  2. Encountering new competition that you didn't even dream of a few years earlier -- and they are tough, price-slashing competitors that can rapidly deliver either a similar (or even the very same) product or service to your customers
  3. Taken for granted by the customers you have served for a period of time because they have been lulled into complacency through their total familiarity with your execution

The next segment will outline the Four Cornerstones of Distinction -- and show you the process to create a compelling strategy to stand out and move up -- while your competition fails!

Check out Collapse of Distinction: Stand Out and Move Up While Your Competition Fails by Scott McKain (Thomas Nelson, March 2009)