From The Times Herald-Record and David Dirks
Creating and sustaining a distinct market advantage from which profits and longevity flow is a worthy goal for most businesses.
The challenge to create this competitive advantage is formidable and not for the faint of heart. As the former chairman of Perot Systems, Jim Champy has spent most of his career helping businesses do just that. When Champy penned his bestseller “Reengineering the Corporation,” he was just beginning to get under the market-differentiation hood.
When Champy wrote “Outsmart!: How To Do What Your Competitors Can’t” (FT Press, 2008), he created the playbook for outplaying the competition. I recently caught up with Champy to explore the implications of “Outsmart” in the context of small business.
Q: What are some ways a small business can find business opportunities that others don’t see or are neglecting?
A: New opportunities often appear small at first. That’s why large companies don’t pursue them. New opportunities are perfect for small businesses that have the persistence to develop them. You can best find them by staying in the markets that you understand.
Look for the unmet needs of your customers. Talk to them and ask them what’s working in the service or product that you provide. What could you add to further satisfy their needs?
Look at your competitors and ask what they are not doing for their customers. Don’t just copy what they are doing unless you can do it dramatically better or dramatically cheaper. Look for products or services that are adjacent to what you now provide. What could you add to your portfolio to delight your customers?
Q: Explain the concept of a narrow-focus business and the advantages of such a business model.
A: The best decisions by small — and large — business owners are made intuitively. You can do a lot of analysis to decide what to do — whether to enter a new market, open a new store, offer a new product, or just stop doing something — but in the end, your informed judgment is what’s important.
That’s why staying focused in your business is critical; over time you develop a keen sense of what works and what doesn’t. When you get out of your knowledge territory, your intuition often doesn’t work. Lots of time, money, and effort can be wasted in businesses that you know nothing about.
In challenging economic times, customers are looking for options. They all want more — product, service, features — for less. It’s a great time for smaller businesses to innovate, solve complex customer problems and deliver on unmet customer needs. Keep your costs low and efficiency high. You can grow during these times by outsmarting your competitors.
David Dirks of Port Jervis is a business strategy and marketing consultant. Visit his blog at growingmybusiness.wordpress.com and listen to his weekly radio show at wtbq.com. E-mail him email@example.com