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Competitive Advantage

July 25, 2009
by Tim Tolan
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How do you define competitive advantage? Delivering a service or product that is superior? Lower in costs? A service that your competition does not offer?
 
Maybe its constantly improving delivery metrics against Service Level Agreements (SLA’s) with internal and external customers? Maybe it’s that you always under-promise and over-deliver?
 
Not sure yet? Back to my point (thanks!).I was talking with a very solid CIO last week—a real 'A' Player—about an opportunity we're working on. We'd spoken (many times) before so I already knew his credentials, but I wanted to schedule some time the following week to have an in-depth conversation about the role and location, and also to understand where he was as far as evaluating the opportunity.

 

His exercise involves every member of the team or company he works with. He meets with them in a conference room with a whiteboard or flip chart to document the discussion. Guess what? He starts his session by asking the same question!

Since he is is usually speaking to members of the same team, his question might be “what is our competitive advantage?” The first responder might say “we deliver great service”. My friend simply looks at them and retorts “so what”. His argument is that everybody says they deliver great service – so that can’t be a competitive advantage. Then he will ask the same question to every single person in the room and he usually gives (ok always) the same “so what” response to every participant in the exercise - until they finally uncover exactly what makes them unique and different. It’s time well spent and I like this exercise a bunch! Live it, learn it and use it. And… make sure your advantage is much more up to date and relevant than the hotel in this photo (taken in 2009).

Sort of looks like the Bates Motel in the Hitchcock thriller ‘Psycho”. What do you think?

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Comments

Richard:

Thanks and I agree that G2G is required reading for any business that wants to grow and scale by defining exactly what they do best. So many organizations take a shotgun approach which is usually to broad. I like a rifle (laser) approach which is much more highly focused and measurable.

Tim,

Thanks for your post, and I think it contains some great advice.


One approach to defining competitive advantage might be found in the excellent book by Jim Collins, "Good to Great." He asks the question "What is it you can be the best in the world at?" It seems that the companies that made the jump from good companies to great companies did so in part by focusing on doing only those things they could truly be best in the world at. I think the book should be required reading for anyone undertaking the exercise you describe.

When thinking about the answer to this question, it is worth keeping some history in mind. IBM, at one point, answered the question by saying something like "We can be the best in the world at producing the worlds most powerful and sophisticated computing hardware," This approach could have put them out of business had they persisted on that course. Had they instead answered the question with something like "We could be the best in the world at solving the computational needs of every person in the world," some of their early decisions wrt entering the desktop computer market might have been different. They changed course and survived, but many who answered the question narrowly ("we can manufacture the best buggy whips") did not.

Tim Tolan

Senior Partner, Sanford Rose Associates Healthcare IT Practice

@@TimTolan

http://sanfordrose.net/thetolangroup/

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