CONDUIT

What is competitive advantage really?

Competitive Advantage. You can’t leaf thru a business magazine or tune into Bloomberg without hearing that phrase over and over. It is, as all the B-B ads will tell us, the aspiration for contemporary business leaders.  But what is competitive advantage really? And how do firms achieve and sustain it?

I set out to address that issue during a presentation I made at the Sales Performance Conference sponsored by SYNYGY. The title of my session was: How Recognition Systems Serve the Bottom Line and it centered on this: Sales compensation executives (and for that matter anyone in the compensation suite) are being asked to do more than drive incremental revenue. To add value to their firms they are being called upon to contribute to the strategic and economic business agendas of their colleagues in marketing finance, operations and HR.

So what's the common denominator for all of these business disciplines? What variable does operations, sales, market, finance have in common? Very simply stated it’s the reliance on their people as the primary source of competitive advantage. 

Markets have transitioned from a production economy to information and service- based economy. No matter what business you are in you have competition. The internet has lowered transaction costs and barriers to entry. Substitute products and category alternatives flood the market. People (not factories) are a company’s source of productivity and innovation.

We live in a what I like to call a “commodified” global economy. My point is this: it’s not so much what companies do but how they do that result in true competitive advantage. In other words it is not the product that is the brand, but rather the people that are selling, delivering or servicing the product or service that are.

In upcoming posts I will look more closely at the agendas of each area business area within the firm and talk more about the role people play in helping optimizing outcomes.

Stay tuned!

Building a culture of recognition

In recent postings, I've discussed the impending challenges of a shrinking labor pool in a knowledge-based economy. Becoming an culture of recognition, can give your firm a significant competitive advantage. Across the enterprise, executives are becoming increasingly aware of the inherent power of recognition levers to build and sustain a culture of commitment and responsibility. That means making positive reinforcement a way of life. It requires cultivation, delivery and consistency in application.  Often internal tools and developed or platforms licensed from vendors. But recognition planners can get easily frustrated when platforms are underutilized by internal stakeholders.

Fear not. Implementing recognition tools are not unlike installing any other change process. Users (including your middle manager constituency) may adopt a "wait and see" posture. During the reality stages they will look for signals that the company is serious about recognition. They will privately wonder if their managements interest in recognition will come and go like some other corporate initiatives.

Contemporary diagnostic and tracking mechanisms can help plan sponsors isolate early adopters from laggards and varying/relevant messages can be sent to each. Those using the program should be congratulated for their efforts. Incremental improvements in key measures can be used to illustrate success reinforcing the behavior. hose who are not yet using the tool will be encouraged by the success of their colleagues.

Often people are placed in positions of power because they are good at what they do, but some have little idea how to leverage recognition as a growth tool. And, as we know, being recognized as a leader among peers is often as  effective as a tangible award.

Give your managers examples of how their peers are using recognition to drive results locally and you will be taking a giant first step to building a sustainable culture of recognition across the enterprise.