Throughout my professional career I have been employed by companies of every shape and size. My first was with a mega corporation that was a clear-cut industry leader. Feeling lost, I left and came home to work in the family business with my father, where we fought tooth and nail every day to figuratively “keep the wolves away.” Chasing stupid dreams, I left there to join a poorly funded start-up where every sale meant hope and every ill-fated decision could mean fatality. And now, for what I aspire to be my last go-around, a small business that has grown substantially over the years into a respected industry guide and thought leader.
Along the way were the traditional lessons, but an unconventional one that has really motivated me is that it’s a lot of fun to consider yourself second best. Don’t take this the wrong way; I love winning and I want to be the best at what I do. But waking up every morning knowing there is a target to hit, a dragon to slay, or a hill to climb gives you extra motivation and a sense of direction.
What makes you the best? There is the belief that being a “disruptor” is the key to success and catapults you to first place. I want to challenge that belief.
The rental car industry has been around since the early 1900s. Hertz became the industry leader by placing rental car lots in the middle of large cities, targeting people who didn’t own a vehicle because of cost considerations but occasionally needed one. Air Force officer Warren Avis began to question that strategy when he noticed how many people were traveling by airplane and were without a car when they landed at their destination. He started Avis and put their rental lots at airports. He was the disruptor.
Then what happened? Hertz moved their lots to the airports as well and dominated, because they made the process and customer experience easier. It wasn’t the disruptor that won. It was the imitator that did it better.
With the airport competition from Hertz, Avis struggled to stay in business until Paula Green, an advertising copywriter for international marketing company DDB, came up with the now famous slogan At Avis, we try harder and sub slogans along the lines of When you’re only No. 2, you try harder. Interestingly, it was a play off her own experience as a woman in a male-dominated industry. To get ahead, she found that she needed to try harder than her male counterparts.
The attack campaign worked, and in the first year Avis went from losing $3.2M to earning $1.2M. Within three years they closed the gap between Hertz’s and their own market share percentage—from 61-29 to 49-36. Avis never used Hertz’s name in their campaigns, but shots were fired! Using lines and themes in ads such as Avis can’t afford not to be nice, Avis can’t afford to make you wait, and Avis can’t afford dirty ashtrays besieged areas that brought the most customer complaints against their rival. It also resonated with the American consumer who loved a compelling underdog.
In the end, it was another company that set their target on both Hertz and Avis and blew past them—Enterprise. They researched their competitors’ weaknesses and found what they couldn’t or wouldn’t do, otherwise defined as differentiators that customers wanted. Then they executed exceptionally on strategic growth initiatives and disruptions. They imitated where Hertz and Avis were strong but with a better model of opening rental lots in cities as well as airports. As former Walmart CEO David Glass once said, “He who reinvents his industry, wins.”
Although it can be tricky, I encourage you to define who is number one in your market. If you are a $4M restoration company that focuses primarily on residential water losses and doesn’t perform program work, your main competitor is probably not the national commercial restoration company in the fancy building. It’s probably the $10M locally owned franchise or independent that is chasing the same market share.
So why is the top company in your market beating you? It could be simple advantages such as being first to market or first to embrace a new technology. If that’s the case, great! Being first at either of those doesn’t have anything to do with long-term sustainability. Netscape was the search engine leader until Explorer and eventually Google came along. In social networking, Friendster was the innovator, MySpace was the disrupter, and Facebook was the imitator that did it better.
To truly pinpoint your best competitor, define your company’s vision and goals. Is there a target you want to reach? Identify who in your market is already there and where and how they are beating you. Flip the process and single out what mistakes they are making.
Formidable competitors are a blessing. Through observation and analysis, you get to learn from them, and better yet, they pick up all the costs of making the mistakes. Are they using technology better? Are they beating you at recruiting top talent, or do they have stronger employee development plans? Do they have significant cash reserves that allow them to quickly reinvest in growth strategies? Does their track record demonstrate a strong understanding of how leadership and management decisions and actions affect the financial bottom line, while you simply review cashflow statements to be sure there is money left at the end of each month? Having that target in front of you allows you to ask more intelligent questions that provide an abundance of information.
Over the years I’ve run a lot of trail races. I enjoy running in packs because it helps me to pace myself and strike up conversations with peers, which gives me a chance to learn. The one place I don’t want to be during most of the race is at the front of the pack. That’s the person who tends to trip over an unforeseen branch, gets blamed for going too fast or slow, or takes the disastrous wrong turn. I prefer to let others scrape their knees, get lost, or make mistakes. Then, when it’s time, and I am truly ready, they are my target to run at and pass.
To be the champ, you must beat the champ. Once you have done this, there then comes a time when there are no more hills to climb or dragons to slay. You are the best, have achieved your business’s vision, and accomplished your major goals. Now begins the danger of being the top dog—becoming complacent.
We have seen this with our clients over and over. The moment they feel that good enough is good enough, the business and its top-performing employees begin to suffer. When the high-performing leader falls in love with their performance as the high-performing leader, they acquire the false acceptance that they are ordained extraordinary. That’s when they set themselves up to get passed and to be pushed back to being ordinary.
To overcome the threat of complacency a new goal must be identified, which is not always easy. If your goal was to be a profitable $10M company and have a flexible work-life balance and you achieve that, setting your sights on becoming a $20M company may not be right. Your initial goal may still be what’s best for you. If this is the case, take a step back and view your company as an outsider. How would another company attempt to take you down? Where would they see cracks in your armor? How would they beat you? In essence, how would you beat you?
Perform a SWOT analysis on yourself as if you were an outside competitor, and then create a plan to master what you need to accomplish to further establish your spot as the champ. This may include finding new ways to give back to your community or creating additional opportunities and learning environments for your team. Whether you knew it then as you were building the business or know it now as the master of your domain, you were always your biggest competitor and your biggest champion. The activities and beliefs you demonstrated over your career brought forth everything you have now.
Embrace being number two, even if that means now being second only to what you could be in the future as the best version of yourself. What better opponent is there than you? What can you do better tomorrow than you are doing today? Your market will evolve. Will you?
Published in C&R Magazine
