{"id":1086,"date":"2020-05-20T08:26:44","date_gmt":"2020-05-20T08:26:44","guid":{"rendered":"http:\/\/janbosch.com\/blog\/?p=1086"},"modified":"2020-05-20T08:26:45","modified_gmt":"2020-05-20T08:26:45","slug":"dont-be-like-everyone-else","status":"publish","type":"post","link":"https:\/\/janbosch.com\/blog\/index.php\/2020\/05\/20\/dont-be-like-everyone-else\/","title":{"rendered":"Don\u2019t be like everyone else"},"content":{"rendered":"\n
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Image by Gerd Altmann from Pixabay<\/figcaption><\/figure>\n\n\n\n

This week, I had a wonderful conversation with the CEO of a midsized company (around 1,000 employees) to discuss business strategy and the implications on technology strategy in the overall context of digitalization. As the company supports its customers with digital solutions, it\u2019s an example of the part of the economy that\u2019s doing really well under the current circumstances. It\u2019s a good reminder of the fact that it\u2019s not so much that the economy is cratering, but rather that there are quite fundamental and accelerated shifts towards digitalization<\/a> taking place in it. It\u2019s just that news outlets prefer to talk about bad news (companies going out of business) instead of good news (the business of some companies is booming) because bad news sells more ads (if it bleeds, it leads).<\/p>\n\n\n\n

The discussion with this CEO focused on the positioning of the \ncompany. It has much smaller competitors, as well as those that are \n(much) bigger and the question becomes how to differentiate your \norganization from these competitors. The simple answer is to do what \nthey do but better or cheaper. However, as Einstein so eloquently said, \nfor every problem, there\u2019s an answer that\u2019s simple, elegant and wrong.<\/p>\n\n\n\n

The slightly less simplistic answer is to focus on one of the corners\n of the competitive triangle (customer intimacy, technology leadership \nor operational excellence) and organize your company based on that. \nAgain, this perspective isn\u2019t necessarily wrong, but it fails to give \nguidance as the question then becomes when to use what strategy.<\/p>\n\n\n\n

In an earlier post<\/a>,\n I introduced the three-layer product model where the functionality in a\n product, a platform or a product portfolio is organized into a layer of\n commodity functionality, a layer of differentiating functionality and a\n layer of innovative and experimental functionality. In our discussion, I\n realized that each of these layers requires a different strategy.<\/p>\n\n\n\n

For commodity functionality, the focus should be on operational \nexcellence as you\u2019re looking to reduce the total cost of ownership for \nthat layer to the minimum possible. This demands that you limit the \nalternative systems to deliver this functionality to the lowest possible\n number, preferably one. I still meet companies that have multiple \nsolutions for the same commodity functionality and that can\u2019t find the \nprioritization to reduce the number of alternatives and consequently \ncontinue to have outsized associated costs. In general, the goal should \nbe to centralize, standardize and prepare for outsourcing the delivery \nof commodity functionality.<\/p>\n\n\n\n

The differentiating functionality needs an alternative strategy: \ncustomer intimacy. This functionality is the key reason customers pick \nus over competitors and consequently, we need to work closely with \ncustomers to maximize the value we deliver to them. Here, the \nintroduction of variants may well be justified as long as we\u2019re able to \nmonetize our efforts. At some point, what\u2019s differentiating now will \nstart to commoditize and then the rules of the game change to what we \ndescribed above.<\/p>\n\n\n\n

Finally, for the innovation and experimentation layer, the key \nstrategy should be technology and product leadership. This is where we \nexplore new innovations, which often are technology driven and which \nhopefully form our future differentiation. The success metric here is \nthe number of things we can try out against our, often limited, budget. \nAnd if I say \u201ctry out,\u201d I mean of course to evaluate ideas with \ncustomers. It\u2019s too easy to get hung up in our own set of beliefs. \nInstead, work with customers and observe. Customers will never ask you \nfor an innovation (and if they do, you\u2019re in bigger trouble than you \nthink) but will use what\u2019s valuable to them.<\/p>\n\n\n\n

Back to the discussion with the CEO: we concluded that it\u2019s easy to look at our competitors, typically the larger ones, and consider copying what they\u2019re doing, which typically focuses on standardizing and preparing for scaling. Or, to look at smaller competitors and focus on agility and customer intimacy. Although it\u2019s perfectly alright to be inspired by what others are doing and to \u201csteal with pride,\u201d as leaders it remains your key responsibility to define a business strategy that\u2019s uniquely different from the others in the industry. Being like everyone else lands you in a red ocean where cost and slim margins are the only things you can think about. Instead, be different in a way that matters to customers, find your blue ocean and build a great business. And, to quote Steve Jobs, if you haven\u2019t found it yet, keep looking!<\/p>\n\n\n\n

To get more insights earlier, sign up for my newsletter at <\/em>jan@janbosch.com<\/em><\/a> or follow me on<\/em> janbosch.com\/blog<\/em><\/a>, LinkedIn (<\/em>linkedin.com\/in\/janbosch<\/em><\/a>) or Twitter (<\/em>@JanBosch<\/em><\/a>).<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

This week, I had a wonderful conversation with the CEO of a midsized company (around 1,000 employees) to discuss business strategy and the implications on technology strategy in the overall context of digitalization. As the company supports its customers with digital solutions, it\u2019s an example of the part of the economy that\u2019s doing really well … Read more<\/a><\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"generate_page_header":"","footnotes":""},"categories":[8,10],"tags":[],"_links":{"self":[{"href":"https:\/\/janbosch.com\/blog\/index.php\/wp-json\/wp\/v2\/posts\/1086"}],"collection":[{"href":"https:\/\/janbosch.com\/blog\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/janbosch.com\/blog\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/janbosch.com\/blog\/index.php\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/janbosch.com\/blog\/index.php\/wp-json\/wp\/v2\/comments?post=1086"}],"version-history":[{"count":1,"href":"https:\/\/janbosch.com\/blog\/index.php\/wp-json\/wp\/v2\/posts\/1086\/revisions"}],"predecessor-version":[{"id":1088,"href":"https:\/\/janbosch.com\/blog\/index.php\/wp-json\/wp\/v2\/posts\/1086\/revisions\/1088"}],"wp:attachment":[{"href":"https:\/\/janbosch.com\/blog\/index.php\/wp-json\/wp\/v2\/media?parent=1086"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/janbosch.com\/blog\/index.php\/wp-json\/wp\/v2\/categories?post=1086"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/janbosch.com\/blog\/index.php\/wp-json\/wp\/v2\/tags?post=1086"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}