The Silent Threat to Your Competitive Advantage
Dec 11
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This post was originally published on October 12, 2023 on LinkedIn
As someone who sits in the trenches of business strategy daily, specifically in crafting and sustaining differentiation, I can't emphasize this enough: your competitive advantage is very vulnerable when your revenue is stable.
Why?
Because inertia can set in and we stop leaning into our differentiation strategy.
What is Inertia in Business?
Inertia, in this context, is the tendency to stick with the status quo. It's easy to grow complacent because we're lulled into a sense of security, thinking, "If it isn’t broken, why fix it?" We may dismiss red flags, avoid making tradeoffs or postpone hard decisions about the strategic growth of our company, in favor of playing it safe.
Inertia isn’t the Bad Guy
Inertia isn't the villain though. It can be a very effective tool in stabilizing great cultures and outcomes. The problem is when we let inertia undermine our differentiation strategy. If we stop focusing on the “unique” in our value proposition, then our competitive advantage is doomed – regardless of revenue performance.
Putting the “Unique” Back into Your Value Proposition
Concerned inertia might be undermining your differentiation strategy? Worry not, here are a few steps to take.
1. Read the Tea Leaves
If inertia has moved in, there will be telltale signs. Here are some red flags that I look for:
How's Revenue Doing Compared to the Category?: If you're matching or slightly outperforming your category's growth, then the conditions could be ripe for falling into inertia's cozy embrace.
Your Cost for New Customers: If attracting new customers starts costing you an arm and a leg, and you can't pin down why, take a look at your value proposition. It may not be the magnet it once was.
Copycats in the Category: If you and your closest competitors look eerily similar, then you may be experiencing strategic convergence (but don’t worry, there’s a way out).
2. Bring in a Fresh Pair of Eyes to Reimagine Your Competitive Advantage
Sometimes we're too close to see the forest for the trees. That's where a savvy consultant or agency comes in. If you don't know how unique your value prop could be (and the impact that would have on your business), hire someone who can show you different scenarios. My team and I live for dissecting unique value propositions, gathering fresh intel, and laying out what bold differentiation could look like across businesses.
3. Put Your Status Quo to the Test
Once you have a spread of strategic possibilities on the table, give your current way of doing things the "new kid on the block" treatment. Evaluate it like you would any of the new ideas. Ask the million-dollar question: "If we weren't already doing this, would we even consider it?"
Giving Differentiation a Fighting Chance
Inertia isn't inherently our enemy. But when it undermines our differentiation strategy, then it becomes a problem. If we find ourselves opting for the status quo because we’re keeping pace in our category, it's time for a strategic shakeup. From spotting red flags to seeking outside perspectives, we can stop inertia from sidelining our differentiation strategy. Keep leaning into what makes you unique and your competitive advantage will survive to fight another day.