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Competitive Anticipation How to enhance leadership by sharpening your competitive edge? By Steve Krupp & Toomas Truumees Today’s competitive landscape is more intense than it has ever been. While leaders have long been faced with competitive pressures, the current volatile, uncertain, complex and ambiguous (VUCA) environment means organizations must seriously re-evaluate their strategies and strengths relative to the competition, lest they become one of the many casualties of industry disruption. Consider the cases of Kodak, Blackberry (RIM) and Blockbuster. Not long ago, these businesses were market leaders in innovation. Heightened competition is coming from all directions. Traditional competitors are evolving as they embrace business model innovations to better serve customers. At the same time, unconventional competitors are emerging as industry boundaries and geographic limitations erode, all while new, nimble players are flooding the field with progressive approaches to traditional business. Just consider how Twitter has upended the news media by enabling all users to report and share content in real time. So, amidst a growing pool of rivals and a sea of constant change, how can leaders and organizations effectively compete? How can they position themselves to lead the market, rather than play catchup, or worse, become obsolete? The answer lies in sharpening their competitive edge by better anticipating competitor moves In reality, research shows that leaders are lacking in their ability to ‘anticipate’. In our recent assessment of nearly 25,000 executives in more than 175 countries on The 6 Key Elements of Strategic Thinking & trade, we found that predicting competitor’s potential moves and likely reactions to new products or initiatives ranks lowest among strategic behaviors. This is quite alarming considering these skills are fundamental to preparing for, adapting to and capitalizing on future uncertainties. This research further underscores the urgent need for leaders to get ready to outplay the competition. There are four proven techniques that leaders must employ in building their competitive strength. They need to 1. Understand team strengths and weaknesses Organizational capability and execution feasibility all boil down to a company’s human capital. As such, it is critical that leaders truly understand their teams’ strengths and weaknesses as they relate to strategic thinking and the competition. To do so, many Fortune 500 organizations employ The Strategic Aptitude Assessment & trade, which evaluates individual’s strategic thinking and provides actionable feedback for development. Once identified, leaders can ensure their near-term plans play to their teams’ strengths, and fill the necessary gaps by developing or hiring talent to enable the effective execution of longer-term strategies that will differentiate their organizations from the pack. 2. Better leverage existing competitive intelligence Information on what the competition is doing is vital. However, all too often organizations fall into the trap of constantly investing in the pursuit of competitive intelligence without making the best use of information already in hand. Consider Colin Powell’s 40-70 rule that says you need between 40 and 70 per cent of the information available to make a good decision. Anything less is too little and anything more will lead to analysis paralysis. The key is to centralize, interpret and package information so it can be used more effectively. In doing so, this data can be analyzed holistically to connect the dots’ on competitor profiles and reveal insights that are more meaningful than surface-level findings. Consider the value of understanding the driving forces behind competitor decisions, rather than just knowing the outcome. For example, if a competitor divests a business line, is it doing so because it is unprofitable, or is it part of a larger change in strategic direction? 3. Become competitor centric Competitor centricity is a new concept that is gaining traction as a critical path to competitive anticipation. It requires that leaders and their teams commit to becoming intimately familiar with their competitors’ inner workings and pain points to better understand how they influence future decisions, as well as what that means for their own business. One of the best ways to do this is to walk in competitor’s shoes. This can be done by hosting an internal role-playing exercise to simulate the competition’s strategic planning efforts, which allows team members to assume their counterparts’; roles and better understand why they are likely, or unlikely, to make certain strategic moves. It is particularly telling to play through mergers and acquisitions. What if Google or Amazon bought a key competitor? What if two major competitors join forces? Based on the insights from these exercises, leaders can assemble their own playbook of strategic choices to have ready if and when these competitive moves materialize. 4. Assess execution readiness Before making any moves, leaders must evaluate their organizations’ readiness to execute on high-impact decisions. They should inventory the biggest competitive decisions for the near term and long term, then distinguish which ones the organization is prepared to make and those that will require more development. This exercise not only enables leaders to align their teams around the strategies that can be implemented right away but also create a plan to fill the gaps that are needed to successfully compete against evolving competitors. If an industry is seeing an influx of tech- and data-driven competitors, for example, existing players must evaluate if they have the right systems resources, and perhaps more importantly, the talent to keep up. Gaining and maintaining a competitive edge is an ongoing effort. By being forward-thinking about the ever-changing competitive dynamics, leaders can proactively prepare with adaptive strategic plans that enable their organizations to stay ahead of the competition. LE Steve Krupp, DSI’s CEO, is driven by a passion for understanding what makes organizations tick. Before joining DSI, Steve was a Senior Partner at Oliver Wyman Delta, where he led the Executive Talent Management business. A respected thought leader, his voice is frequently heard in publications such as the Harvard Business School Press, Oliver Wyman Journal, and Chief Learning Officer and Talent Management Magazine. Call 610-717-1000 Email krupp@decisionstrat.com Toomas Truumees, Managing Partner at DSI, found his passion for strategy at a young age in the competitive world of athletics. Toomas leads the Health & LifeScience Practice at DSI. Call 610-717-1000 Email truumees@decisionstrat.com leadership excellence essentials presented by HR.com | 04.2014 40


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