Part One: The Attacks on Uber are Backfiring

By Ben Gilad

We are trained to think competition means offering customers better product or service than our rivals’. Based on this business-school perspective, we look for companies to use innovation, speed, service and other familiar factors to create competitive advantage.

How 2004 of us. In 2004, Elon Musk showed that using government and riding a favorite cause for the ruling party pays handsomely. (See Best Companies to Work For.) It is not that companies didn’t know that competition involves paying attention to regulators and lawmakers; it is that Elon Musk made it both an art form and a crucial element in his strategy. Without government subsidies, Tesla might have become a modern Tucker for all I know. (Never heard of a Tucker? That’s the point.)

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“The Sound of Competing” Episode 3: Culture Doesn’t Replace Strategy


Every corporation has a corporate culture. Is yours a competitive advantage?

Many pundits, especially those from the “soft” social sciences (psychology, sociology, anthropology), make a case that corporate culture is a critically important source of competitive advantage. They call for open and empowering cultures that they say uniquely encourage innovation and success. Yet, just as attitude can take you only so far in soccer if your stars are injured, culture can take you only so far within the competitive economics of the industry. Companies creaking with old-fashioned management styles have succeeded over decades. Startups wielding the most open, progressive, and innovative cultures have failed overnight.

The one aspect of culture which is critical is how information flows inside the organization. The reason: whether your management is an authoritarian, cigar-chomping Lord High Everything or an enlightened, organic Collective of Nice Dedicated Associates, without information you wear a blindfold during the big game.

In the podcast you’ll hear about the category of information that’s the most crucial to decision makers, why it is scarce, and what it takes to make it flow.

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“The Sound of Competing” is a new podcast from Competing.com. It’s conversations from Ben and Mark, plus the occasional reckless guest. It’s remarkable. It mixes serious concepts with humor. It’s edgy without sacrificing critical thinking. It’s the antidote to the silly and shallow. Also, there are titanic battles between good and evil. A ping pong match between two strategy giants resulting in commentary smart enough to listen to.

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“The Sound of Competing” Episode 2: Harmony Versus Confrontation

Facing reality is more important than being nice.

Aversion to confrontation is embedded in many national and corporate cultures. Unfortunately, that niceness feature can turn into a nasty bug when it enables bad strategy and bad management.

Coca-Cola recently decided to issue stock that will dilute ownership of existing stockholders in order to pay huge compensation to top management. How huge? $24 billion. Twenty-six states in the USA spend less than that each year. That seems excessive, to put it mildly, even if you assume Coca-Cola’s top executives are the most talented people in the world.

Warren Buffett, Coca-Cola’s largest stockholder, abstained when the Board voted even though he thought it excessive too. He didn’t want to create a rift with management. That’s the downside of nice. Too much harmony, too little confrontation, too bad for shareholders. Shareholders at other companies, too. “Well, Coca-Cola did it for their executives…”

Then there’s confronting reality. The culture of the large automobile companies in Detroit has long been notorious as good old boys who don’t rock the boat. Look at what happened to GM when it chose to keep product defects tightly under wrap rather than face the issue head-on. This year it will probably recall more cars in the USA than it will sell.

If you don’t create a safe forum to say, aloud and in time, that the king has no clothes, the rest of the world will do it for you, and not so nicely. It is not a mere business school cliché, as so many companies discover too late.

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“The Sound of Competing” is a new podcast from Competing.com. It’s conversations from Ben and Mark, plus the occasional reckless guest. It’s remarkable. It mixes serious concepts with humor. It’s edgy without sacrificing critical thinking. It’s the antidote to the silly and shallow. Also, there are titanic battles between good and evil. A ping pong match between two strategy giants resulting in commentary smart enough to listen to.

Subscribe by RSS feed

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Competitive advantage comes not only from a company’s products or services but also from its management style. A collaborative culture inside the company builds competitive advantage in the marketplace.

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Are your most-dangerous competitors in the marketplace or inside your own company?

As a leader in your enterprise, you may seldom talk about internal competition, but you deal with it constantly. People are competing for the next promotion, the attractive assignments, and the workspace next to the window.

Manage that competition right and it helps the best ideas and talent rise to the top. Manage it wrong and it stifles collaboration. How you manage internal competition carries substantial consequences for your company and you.

Let’s look at examples from two Fortune 500 companies. Both were industry leaders that hired top talent, provided outstanding benefits, and promoted from within.

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“Thank you” is such a simple gesture, a daily occurrence, an acknowledgement of interacting with other humans. “Thanks!” says the person for whom you held the elevator. “Thanks, every­one” concludes the weekly staff meeting. “Thank you” writes the company in its holiday card.

All those thanks are important symbols and expressions of gratitude in our lives and livelihoods. “Thank you” is also part — often underused — of the skill of competing.

Competing and gratitude might appear contradictory. How can we be competitive and thankful at the same time? Isn’t the essence of competition to win or gain advantage? Competing would suggest that we put ourselves and the organization first, think less about others, and stay focus­ed on what we want. On the surface competing is more about “beat you!” than “thank you.”

I submit, though, that to compete well we must seek the help of many. Get­ting the job, on the job, and building the business, employees and employers alike should con­sider how a meaning­ful “thank you” impacts competitive edge both for their organization and for them personally. We’ve all heard (and said) the bitter complaint that someone “didn’t even say ‘thank you.’”  Likewise, people of all kinds, including senior leaders, must be willing to pro­vide support while expecting no more in return than a kind expression of thanks. It doesn’t work when strings are attached.

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My co-editor Ben Gilad recently published a terrific essay called The Neurotic Index. I am happy to provide other entries in this reference series. If companies continue to misbehave we will compile their foibles into the Diagnostic and Statistical Manual of Corporate Disorders in 2014.

Denial Disorder

Description: Denial isn’t disagreement. This is disagreement: you say “we are headed for disas­ter!” and I say “no we aren’t.” This is denial: you say “we are headed for disaster!” and I say “did you watch the 49ers game on Sunday?”

Symptom: We can’t get anything done because there’s nothing to be done.

Measurement: Ask your colleagues if they think the company is in denial. Total up the “yes” votes; they acknowledge the problem. Also total up the “no” votes; they demonstrate the problem.

Important note! Most sufferers dispute the diagnosis. Discard any evidence that they are right.

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The dictionary defines neurotic behavior as “overanxious.” Woody Allen made this behavior popular in his movies, almost loveable.

We all know neurotic people. Maybe even ourselves, depending on subject matter.

I think companies can exhibit neurotic behavior too. I would not bother to document this statement if it did not relate to the skill of competing. In this piece I also offer a new tool called the Neurotic Index, or NIX. Use it to assess how your organization’s neurotic behavior affects its skill at competing. Don’t get neurotic about it, though.

I was inspired to create the NIX by a personal experience with a Fortune 500 company. I’ve dealt with Fortune 500 companies my entire professional life, so I’m used to a certain level of neurosis. Mid-level managers are often subject to unpredictable demands from the top level, which turns the mid-level neurotic from time to time. But this was different.

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