Podcast Ep 81 | The Dangerous Thing About Focusing on Your Competition

If you’re over­ly focused on your com­pe­ti­tion, you might not be focus­ing on your customers.

Many lead­ers spend way too much time think­ing about and talk­ing about their com­pe­ti­tion. And some­times this can lead to me-too type reac­tions, that can lead you to commoditization.

Instead of spend­ing too much time think­ing about the com­pe­ti­tion, lead­ers should instead think about what their cus­tomer needs are, and how to meet those needs in a unique and valu­able way.

In this episode, Brad Giles and Kevin Lawrence talk about the chal­lenges with client focus, and why you should spend more time focus­ing on customers.

EPISODE TRAN­SCRIPT

Please note that this episode was tran­scribed using an AI appli­ca­tion and may not be 100% gram­mat­i­cal­ly cor­rect – but it will still allow you to scan the episode for key content.

Kevin Lawrence 00:12

Wel­come to the Growth Whis­per­ers Pod­cast where every­thing we talk about is build­ing endur­ing great com­pa­nies because this is what Brad and I both enjoy doing, see­ing com­pa­nies grow and get bet­ter as they get big­ger and have a bet­ter impact on our world. I’m Kevin Lawrence, joined today as I am for every show with my great part­ner Brad Giles. Brad, how are you doing?

Brad Giles 00:34

Excel­lent. Thank you very good today. Very good. Spring in my town. Just start­ing to warm up so I’m good.

Kevin Lawrence 00:43

And we’ve got the oth­er way, we’re get­ting a win­ter. As I drove through the moun­tains the oth­er night there was a lit­tle bit of snow on the road. So the sea­sons have changed. So what are we going to talk about today?

Brad Giles 01:10

Today we’re talk­ing about the dan­ger­ous thing about focus­ing on your com­pe­ti­tion, there is a dan­ger­ous thing. If you’re going to focus on your com­pe­ti­tion. What is it?

Kevin Lawrence 01:19

OK! and so, now your word of the day?

Brad Giles 01:27

The dif­fer­ence between a good boat hull and a bad boat hull and I don’t know much about boat hulls, but I know enough to have a go at it. The dif­fer­ence between a good and a bad boat hull is its abil­i­ty to con­sis­tent­ly endure rough seas. And so trans­lat­ing that back into a good busi­ness, you can have the best Skip­per that you want. But it’s the abil­i­ty to nav­i­gate rough seas. That’s what’s on my mind at the moment, the kind of the par­al­lel between a boat home and a good busi­ness. And what about yourself?

Kevin Lawrence 02:12

My phrase is pro­duc­tive para­noia. It’s one of my favourites because Jim Collins had me real­ized that my para­noia made me more capa­ble and not crazy. And as I think it would go back into cross­ing the moun­tain pass­es, because I go back and forth now prob­a­bly every week, between this place called the Okana­gan, you know, like three, four hours from here and Van­cou­ver. And you know, on my vehi­cle I have it’s a truck I used to go up into the moun­tains for like for snow bik­ing, and win­ter sports. So it’s a truck, it’s lat­er in the back. So I’ve got sand­bags in the back, I’ve got a you know, 24 or 36 Hour Emer­gency bag, I have the best snow tires you can get. And they’re stud­ded with lit­tle steel things stick­ing out. So it’ll even have grip on ice. It’s like, I’m good, no mat­ter what. And you know, and I know some peo­ple that don’t think about those things. But it was inter­est­ing had a con­ver­sa­tion with a cou­ple bud­dies that were very suc­cess­ful entre­pre­neurs. And they all oper­ate fair­ly sim­i­lar­ly, they have that sim­i­lar type of para­noia and pro­duc­tive para­noia is things that you’re con­cerned about. And then you dri­ve into action and do some­thing about it. So it’s like, you don’t just observe risks, you active­ly mit­i­gate them all. So you can just get on your way and do what you got to do. So pro­duc­tive the whole of pro­duc­tive para­noia. So why don’t we jump right in. So this thing about focus­ing on new com­pe­ti­tion can be very dan­ger­ous. And I’ll tell you it is as you know, as you and I were talk­ing, you know, real­ized how lit­tle ener­gy we actu­al­ly put into com­pe­ti­tion that we know is you and I had a con­ver­sa­tion we’re talk­ing about when you’re build­ing out a strat­e­gy, you got to be tuned into the mar­ket and the com­pe­ti­tion and what they’re doing. But most com­pa­nies that we work with I work with and we don’t have to do, we try not to spend too much time on it because it can be one a waste of time and to dan­ger­ous num­bers, not say­ing not to do it. You do need to be aware of them. But the idea is a lot of peo­ple start to real­ly stay over­ly in tune with their com­pe­ti­tion. And it can get them in a lot of trouble.

Brad Giles 04:37

Yeah, well, when we were talk­ing about prepar­ing for this episode, we were toy­ing with the idea of call­ing it I you spend­ing too much time think­ing about your com­pe­ti­tion and not enough time think­ing about your cus­tomers. But that’s a bit long for a title

Kevin Lawrence 04:53

and we’ll get it but that’s kind of the theme that we’re weav­ing into this here. Okay. But it starts with you con­sume your Think­ing time think­ing about your com­pe­ti­tion, there’s gonna be noth­ing left to think of what your darn cus­tomers. So the first point here is the dis­tinc­tion between under­stand­ing your com­pe­ti­tion or being aware of which is real­ly ana­lyz­ing their strengths and their weak­ness­es. And maybe, you know, oppo­sites do almost like a SWOT on your com­pe­ti­tion. Ver­sus focus­ing on and obsess­ing about. And, and, you know, that’s an impor­tant dis­tinc­tion, appro­pri­ate aware­ness, ver­sus almost obsessed with and spend­ing your extra dis­cre­tionary time think­ing about them, and or wor­ry­ing about them.

Brad Giles 05:40

Yeah, your com­pe­ti­tion should form a part of your strate­gic analy­sis. Think about it like this, if you have a quar­ter­ly strate­gic plan­ning day, it should form our agen­da and agen­da item with­in that. And then you should be using tools to assess them and what they’re doing and what they’re not. And, you know, it should­n’t maybe form part of the con­ver­sa­tion that you’re hav­ing with cus­tomers, either we spoke about the for cube before for ques­tions in Episode 78. But you know it that there should be a lim­it on it. Because then, once you under­stood and have used the tools to under­stand, let’s say, the play­ing field, or under­stand where the com­pe­ti­tion are, and what they’re doing, that’s when you can shift over to think about the cus­tomer’s needs.

Kevin Lawrence 06:31

I might even argue that you don’t even need to talk about them every quar­ter. In some cas­es, every busi­ness is dif­fer­ent. So I’m not say­ing if it’s work­ing for you keep doing it. But for most of the com­pa­nies that we work with, we’re not even track­ing the com­pe­ti­tion quar­ter­ly, we might look at it at an annu­al and again, it depends, some busi­ness mod­els have more sen­si­tiv­i­ty around it. But the point of it isn’t. And that’s point num­ber one, that the thing that the sec­ond point here is that, you know, the first point is here. So basi­cal­ly, you need to under­stand them and be aware of them because they’re part of the envi­ron­ment. But the sec­ond, the real dan­ger is you can if you put too much atten­tion, you start to fol­low them, and you’ll start to become a me too com­pa­ny. And this is how peo­ple com­modi­tize their own busi­ness and decrease their own gross mar­gin, and decrease their own net income. Because they start to get they get com­modi­tized by fol­low­ing the com­pe­ti­tion, and oh, the com­pe­ti­tion’s doing it, so we should do it too. And, and that’s the dan­ger of pay­ing too much atten­tion to them. And I’ve seen a lot of com­pa­nies fall into that they, they give up or destroy their own com­pet­i­tive advantage.

Brad Giles 07:43

Yeah, and that’s real­ly the key to the title of this episode, the dan­ger­ous thing about focus­ing on your com­pe­ti­tion is that you can begin to emu­late what they’re doing. And then you’re always play­ing catch up, or you haven’t carved out your own strat­e­gy. And then it’s just a hor­ri­ble race to the bot­tom. And of course, prof­its are sig­nif­i­cant­ly affect­ed in a com­modi­tized mar­ket like that. So it’s not that you don’t need to not know what they’re doing. But you’ve got to be able to dif­fer­en­ti­ate Are you obsess­ing? Or are you spend­ing too much time beyond a spe­cif­ic dis­ci­plined allo­cat­ed amount of time that you should in ana­lyz­ing and under­stand­ing them to carve out your own niche?

Kevin Lawrence 08:23

Yes, and that would be the key thing, right? is if you’re think­ing about them, and then look­ing at how to dif­fer­en­ti­ate, if we if you’re look­ing at them under­stand they’re going left so that you can go right, that’s dif­fer­ent, we’re talk­ing about you’re fol­low­ing them and it would like you know, and this is the dan­ger of as I know, recent­ly teach­ing my daugh­ter how to dri­ve. If you’re in traf­fic, and you just start to fol­low the tail­lights of the car in front of you, you’re in dan­ger. Because you don’t get time to react you need to be look­ing 510 cars ahead Yeah, and with the car 10 cars ahead steps on their brakes, you start to slow down. Oth­er­wise if you just get tun­nel vision and fol­low the car in front of you, you’re gonna smash right into them because you won’t have enough time to respond. And that’s what hap­pens and peo­ple metaphor­i­cal­ly peo­ple get that kind of tun­nel vision and just start fol­low­ing the tail­lights of the com­peti­tors it’s not it’s not good you’re here to do your own game again, my back­ground rac­ing cars. you’re observ­ing those oth­er cars, but I’m look­ing way past them because I’m run­ning my game. I’m not gonna fol­low them in theirs. Yeah. Reminds me of a time when, when it’s almost like when you go on autopi­lot. And again, bad strat­e­gy is autopi­lot. And you’re sup­posed to be going some­where, but then you fol­low your nor­mal route home, when you’re actu­al­ly sup­posed to be going to meet friends for din­ner some­where else. That’s a whole oth­er story.

Brad Giles 09:41

Yeah, no one will admit to have done the hav­ing done that before. That’s for sure.

Kevin Lawrence 09:46

No, no, nev­er. I’m nev­er more than once a year. Yeah. And and you

Brad Giles 09:49

know, anoth­er way to think about it is that a wolf does­n’t wor­ry about the opin­ions of sheep. Now that’s a bit of a bru­tal way to look at it. But you know, you’ve got to under­stand what the com­peti­tors are doing. But if you’re build­ing a unique and valu­able strat­e­gy that is dif­fer­ent from your com­peti­tors, under­stand what they’re doing, and then come back and relent­less­ly focused on your cus­tomers. So that

Kevin Lawrence 10:12

would be the sum­ma­ry read. If you’re pay­ing atten­tion to your cus­tomers, it’s to get data to improve your strat­e­gy and your dif­fer­en­ti­a­tion. Yeah, if you find that pay­ing atten­tion to your cus­tomers is mak­ing you repli­cate what they’re doing, unless your strat­e­gy is to knock them off and be a cheap­er ver­sion of them, which nor­mal­ly isn’t a good strat­e­gy. But if you have if that is your strat­e­gy, okay, maybe let them be your r&d, and then you lever­age it. But for most peo­ple, they want to try and cre­ate dif­fer­en­ti­a­tion, not sim­i­lar. I was gonna say sim­i­lar ideation. But that’s not a word. com­modi­tize your­self. Cool? Yes. So So the third point is going to Okay, enough atten­tion, enough atten­tion on your cus­tomers to give you dif­fer­en­ti­a­tion and under­stand­ing, but then 80% of your ener­gy on your cus­tomers under­stand­ing their cur­rent, and their future needs bet­ter than any­one else. And that’s real­ly plugged into them. And it goes back to that that four cue card con­ver­sa­tion we talked about, as you men­tioned in Episode 78, but tru­ly under­stand­ing what they need, and what they wish they had that they may not even have told you yet. And you know, it’s a quote, the late great Steve Jobs, you know, no one ever said they want­ed an iPod. Nobody ever asked for one. But he was able to under­stand what peo­ple were using in their world when it came to music, and poten­tial­ly not using and tri­an­gu­late it, and maybe a few spe­cial psy­che­delics mixed togeth­er. And he hint­ed up with his vision of this thing called an iPod. But that’s a great place to hang out and spend time and some­times peo­ple just don’t do enough. And that is a valu­able place to obsess.

Brad Giles 12:00

Yeah, yeah. So what we’re say­ing here is, like many of the con­cepts, the pere­do rule, it just plugs in so nice­ly. So yeah, if we were forced to put a dis­ci­pline around this, why don’t we say, let’s use the pere­do rolling thing. Don’t spend more than 20% of your time think­ing about the com­pe­ti­tion. If you spend­ing 10, or what­ev­er, that’s, that’s fine. I

Kevin Lawrence 12:27

would say to Yeah, 20 is great, too. But if you want to stick to the prayer thing, but 20 is way too much. Yeah.

Brad Giles 12:35

But we want to find some kind of dis­ci­pline, because I can tell you, some peo­ple, in some busi­ness­es, it would be flipped, they’d be spend­ing 80% of their time, think­ing about the com­peti­tors, and 20 or less think­ing about the cus­tomer? I believe

Kevin Lawrence 12:55

you Brad, I think that’s just, yeah. Unless there’s some unique rea­son why they need to.

Brad Giles 13:03

And this is all of the time, this is not just the time with­in an agen­da at a strate­gic off­site meet­ing. Let’s be clear about that. It’s also the time where there’s infor­mal chats over the water cool­er, where we’re talk­ing about. It’s Yeah, it’s all of the stuff in the day to day running.

Kevin Lawrence 13:24

I vote for 2%. Yeah, max­i­mum 2% of time on the cus­tomer on No, not on the cus­tomer on the competition.

Brad Giles 13:31

Yeah, yeah. And that might be, that might be rea­son­able. But just think about for our lis­ten­er, think about how much time in total of all the time that you spend on the sub­ject, how much is spent on the com­pe­ti­tion, you want to make it as lit­tle as pos­si­ble, after you under­stand them. Then mov­ing on to num­ber four. Once we, once we have reduced, our time spent think­ing about our com­pe­ti­tion, and we instead spend more time focus­ing on the cus­tomer’s needs. Remem­ber that com­modi­ti­za­tion is what we’re try­ing to avoid here, right? So we under­stand­ing the cus­tomer’s needs, then we can ded­i­cate time to improv­ing our sys­tems to enable bet­ter cus­tomer expe­ri­ence. So how can we meet those cus­tomer needs bet­ter than any oth­er organization?

Kevin Lawrence 14:30

Yeah, and with the least amount of fric­tion and or cost in the sys­tem, which will also ben­e­fit your own effi­cien­cy and prof­itabil­i­ty, it like­ly has spillover ben­e­fits onto your team. And this is where the whole thing about Lean and Six Sig­ma and process improve­ment comes from. You stand in the shoes of the cus­tomer on the receiv­ing end of the expe­ri­ence and you think about Okay, how do we make this notably eas­i­er and or less time con­sum­ing less mis­takes, less what­ev­er it hap­pens to be, it’s the ulti­mate way to stream­line our sys­tems. Unfor­tu­nate­ly, as com­pa­nies grow and get more com­plex, we get more caught up and look­ing at it from our own per­spec­tive. Because we have peo­ple that are cry­ing and scream­ing and frus­trat­ed about things that we have that don’t work. And we get caught up in that, ver­sus going back to the cus­tomer shoes. And yes, we need to do both. But even if you want to stream­line some­thing for your cus­tomer ser­vice team, it should be done from the per­spec­tive of the cus­tomer. And then the cus­tomer wins, the team wins and the prof­itabil­i­ty or effec­tive­ness of the com­pa­ny wins to.

Brad Giles 15:40

Yeah, so that’s about sys­tems. And also it’s about our prod­ucts and ser­vices. Let’s go back to that pere­dur rule, what you know, and maybe think about 80% of our bot­tom 20% of our prod­ucts and ser­vices. Are they meet­ing the need as much as they could? Or 80%? Just real­ly think­ing about? How, if we under­stand our cus­tomers need? are we sell­ing it just because the com­peti­tors were? Or in actu­al fact, could those prod­ucts and ser­vices, maybe they’re not rel­e­vant? Or maybe there are parts of them that would be more valu­able to more customers?

Kevin Lawrence 16:23

Yeah, for exam­ple, we just had our annu­al retreat with our team. And as the 10 of us went through and worked on our strat­e­gy and think­ing, Well, we know we pro­duced a report with a num­ber of our clients that we’re only doing, pro­vid­ing one of the solu­tions that we have. Now over the years, we’ve built a bunch of addi­tion­al solu­tions that a lot of the clients prob­a­bly don’t even know about. Yeah. And the pains that grow­ing com­pa­nies have are sim­i­lar, no com­mon pains. And we’ve just real­ized is that for some­one, we need to need to make sure they’re aware, hey, if you need help with this, then we can help you. But every­one’s so busy doing their job, we often for­get to go back and hey, you know, Mr. or Mrs. Cus­tomer, here’s what’s pos­si­ble. Because peo­ple just know, try­ing to get the exist­ing stuff com­plet­ed in across the line. So yeah, think­ing about the same the exist­ing prod­ucts and ser­vices you have, maybe there’s addi­tion­al prod­ucts and ser­vices, and how can you do that? Because gen­er­al­ly, gen­er­al­ly, I had it not­ed in our prep notes here, where did it go?

Brad Giles 17:27

I don’t know. But while you’re look­ing for that, the oth­er thing is about our employ­ees. So it may be worth con­sid­er­ing, paus­ing, tak­ing a moment and lis­ten­ing to the types of con­ver­sa­tions that our employ­ees are hav­ing, and try­ing to think how much of the time that our teams spend is spent on talk­ing about the com­peti­tors, com­pared to talk­ing about our cus­tomers. And that would be inter­est­ing think­ing about that maybe in the lead­er­ship team, maybe in the mid man­age­ment or oth­er teams, oth­er areas. But if you were just to observe, pause, how much of your team’s time is actu­al­ly spent talk­ing about com­peti­tors? or talk­ing about the cus­tomers needs? And not?

Kevin Lawrence 18:20

Yes, exact­ly. Beyond that above, by the way as that as we’re tone is a one Yo, I bet you there is some com­pa­nies who prob­a­bly do need to pay a lit­tle bit more atten­tion to the com­peti­tors. But I would imag­ine most would prob­a­bly need to pay more atten­tion. I would guess more towards the knee from expe­ri­ence of oth­er clients more on the nee­dle towards cus­tomers. Yeah, I guess we do we get caught up in the day to day and instead of zoom­ing out and look­ing at what are the oth­er needs or things that we could help at a macro lev­el and Michael Dell, I just lis­tened to a great pod­cast with him. But Michael Dell used to call this read read­ing the tea leaves, he used to do this in the ear­li­er days of Dell, he would take all the cus­tomer feed­back and kind of spread it out and try and find pat­terns. And this is before we had kind of word clouds and all of those things. But he would look for the com­mon pat­terns of the pos­i­tives and neg­a­tives, the cus­tomers were think­ing to help him fig­ure out what he need­ed to do in his business.

Brad Giles 19:15

Yeah, yeah, it’s, it’s impor­tant to under­stand what’s hap­pen­ing with the cus­tomer. You know, the cus­tomer pays the bills, and some­times they come sec­ond fid­dle to pol­i­tics or to gos­sip or things that we hear,

Kevin Lawrence 19:36

or even bro­ken sys­tems are flawed process­es. At the end of the day, it’s easy to get sucked into the dra­ma or obses­sion with their com­peti­tors. It’s easy to get sucked into the dra­ma of bro­ken or inef­fi­cient sys­tems and process­es are issues in the com­pa­ny. And it’s always the best choice to try and get back to the customer.

Brad Giles 19:57

You know, I I’m sor­ry, go No, please do go ahead, I, I was recent­ly set­ting up a new inter­net ser­vice. And it took two and a half months for me to set it up. From the time, from the time when it was sup­posed to be set up, let’s say there was a, there was a date that was agreed with the car­ri­er that the inter­net ser­vice provider, it took them two and a half months to the point where they could tell me what my account num­ber was where, and it got to the point where I was in the store. In I won’t men­tion the com­pa­ny’s name was in store. And I was talk­ing to the cus­tomer ser­vice per­son. And he said to me, Look, if our sys­tems are so bad, if we can’t get this to work, I’m going to rec­om­mend that you go to anoth­er provider, you go to one of our com­peti­tors. They’re just not focused around the cus­tomers. In any case, that’s a side

Kevin Lawrence 20:57

Yes. And as it but I had anoth­er sim­i­lar sto­ry. I am work­ing with a bank on a piece of real estate that I own and refi­nanc­ing it. Yep. And try­ing to get it refi­nanced and try­ing to get it done. And I want­ed a cou­ple of changes that were rea­son­able based on the sit­u­a­tion I when I first bought it, there was no ten­ant, now there’s a ten­ant. So the the the the the needs for the financ­ing are dif­fer­ent, try­ing to get them to change it, they could­n’t do it. Final­ly, the guy said, Kevin, you’re prob­a­bly bet­ter to go to one of our com­peti­tors. Yeah. And he gave me a name and I got names and some­where else. So I go to the com­peti­tor. Not only is the inter­est rates 30 basis points low­er. They turned around and I was going back and forth to this oth­er one for about a month, the exist­ing bank that already has my busi­ness, the new one, turned the whole thing around in I think sev­en days. And at a bet­ter rate, and bet­ter actu­al­ly bet­ter rate and some oth­er terms. And they made the changes that were would be nor­mal to do. So here’s the bank, the last chunk of busi­ness. And it’s just and the guy, the guy actu­al­ly told me to go some­where else because he says he his peo­ple were just being sil­ly about it because of the changes. Because it’s like they like to fol­low the process. Yep. And it’s fas­ci­nat­ing. You know, and then peo­ple are wor­ried and think­ing about it. But at the end of the day, when you’re let­ting cus­tomers leave like that, when there’s no need for it. No, where’s your focus on your cus­tomer? And they’re all try­ing their hard­est? They are try­ing but you know, it’s chal­leng­ing sometimes.

Brad Giles 22:41

Okay, so let’s move to review. So num­ber one is there is a dan­ger­ous thing about focus­ing on your com­pe­ti­tion. And that is if you’re focused on your com­pe­ti­tion, you might not be focus­ing on the cus­tomer, A and B the cus­tomers needs more impor­tant­ly, so we got to under­stand our com­pe­ti­tion is point num­ber one, we’re going to under­stand, what are the com­pe­ti­tion doing? What are they good at, and what are they not good at. And that should be allo­cat­ed in a dis­ci­plined man­ner with­in your strate­gic plan­ning process. Num­ber two is, is if you don’t do this, you could end up as a com­mod­i­ty, you could just fol­low and repli­cate what the com­peti­tors are doing. And the risk is that that obses­sion means that you’re just a fol­low up, and it’s just dri­ving the prices down. And then num­ber three is think about the pere­dur rule. Think about your teams, think about your­self. Think about the lead­er­ship team, how much of the time is spent focus­ing on cus­tomers, instead of focus­ing on com­peti­tors. And know that Kev­in’s advo­cat­ing for 2% I’m just sim­ply advo­cat­ing under­stand the num­ber and think about the pariatur rule What if you flipped it? What if you spent most of your time spoke focus­ing on the cus­tomers and a cus­tomer’s needs. Kevin, you want to move on to num­ber four?

Kevin Lawrence 24:04

Yeah, and the tak­ing that that extra ener­gy you have on your cus­tomer? Or maybe you’re already doing this right? But think about how do you bet­ter improve your cus­tomer expe­ri­ence so that it’s eas­i­er for cus­tomers to trans­act with you and be thrilled the end? And then num­ber five oth­er prod­ucts and ser­vices that you could be pro­vid­ing to those cus­tomers? How can you fur­ther help them and make their world bet­ter because you have some things that will enhance their busi­ness and help them to per­form bet­ter? Very good, pret­ty straight­for­ward. But yeah, peti­tion is impor­tant, but not that important.

Brad Giles 24:39

And to main­tain that as we’ve already said a few times. Think about the four ques­tions. It’s a sim­ple five minute sur­vey that we advo­cate and again we did that. We dis­cussed that in Episode 78 of the growth whis­pers so this has been the growth whis­pers My name is Brad Giles. As always, as always joined by Kevin Lawrence you can find me at evo­lu­tion part​ners​.com​.au and you can find Kevin at Lawrence and koat​.com. Don’t for­get, please do click the sub­scribe but­ton. And we’d love to have you as a reg­u­lar lis­ten­er. And thanks very much for lis­ten­ing. We look for­ward to chat­ting again next week.