Competitive Success

An industry’s key success factors (KSFs) are those things that most affect the ability of industry members to prosper in the marketplace—the particular strategy elements, product attributes, resources, competencies, competitive capabilities, and business outcomes that spell the difference between profit and loss. Key success factors concern what every industry member must be competent at doing or concentrate on achieving in order to be competitively and financially successful. KSFs are so important that all firms in the industry must pay them close attention—they are the prerequisite for industry success. The aswers to three questions help indentify an industry’s key success factors:

  • On what basis do customers choose between the competing brands of sellers?
  • What must a seller do to be competitively successful—what resources and competitive capabilities does it need?
  • What does it take for sellers to achieve a sustainable competitive advantage?

Determining the industry’s key success factors is a top priority. At the very least, managers need to understand the industry situation well enough to know what is more important to competitive success and what is less important. They need to know what kinds of resources are valuable. Misdiagnosing the industry factors critical to long-term competitive success greatly raises the risk of a misdirected strategy—one that over-emphasizes less important competitive targets and under-emphasizes more important competitive capabilities. On the other hand, a company with perceptive understanding industry KSFs can gain substantial competitive advantage by training its strategy on industry KSFs and devoting its energies to being better than rivals on one or more of these factors. Indeed, KSFs represent golden opportunities for competitive advantage—companies that stand out on a particular KSF enjoy a stronger market position for their efforts. Hence using one or more of the industry’s KSFs as cornerstones for the company’s strategy and trying to gain sustainable competitive advantage by excelling at one particular KSF is a fruitful approach.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit, Lectures, Line of Sight

Study Your Best

If you want to be sure that you have started with the right three talents, study your best in the role. This may sound obvious, but beware: conventional wisdom would advise the opposite.

Conventional wisdom asserts that good is the opposite of bad, that if you want to understand excellence, you should investigate failure and then invert it. In society at large, we define good health as the absence of disease. In the working world, the fascination with pathology is just as pervasive. Managers are far more articulate about service failure than they are about service success, and many still define excellence as “zero defects.”

When it comes to understanding talent, this focus on pathology has caused many managers to completely misdiagnose what it takes to excel in a particular role. For example, many managers think that because bad salespeople suffer from call reluctance, great salespeople must not; or that because bad waiters are too opinionated, great waiters must keep their opinions in check.

Reject this focus on pathology. You cannot infer excellence from studying failure and then inverting it. Why? Because excellence and failure are often surprisingly similar. Average is the anomaly.

For example, by studying the best salespeople, great managers have learned that the best, just like the worst, suffer call reluctance. Apparantly the best salesperson, as with the worst, feels as if invested in the sale that causes him to be so persuasive. But it also causes him to take rejection personally—every time he makes a sales call he feels the shiver of fear that someone will say no to him, to him.

The difference between greatness and failure in sales is that the great salesperson is not paralyzed by this fear. He is blessed with another talent, the relating talent of confrontation, that enables him to derive immense satisfaction from sparring with the prospect and overcoming resistance. Everyday he feels call reluctance, but this talent for confrontation pulls him through it. His love of sparring outweighs his fear of personal rejection.

Lacking this talent for confrontation, the bad salesperson simply feels the fear.

The average salesperson feels nothing. He woodenly follows the six-step approach he has been taught and hopes for the best.

By studying their best, great managers are able to overturn many similarly long-standing misconceptions. For example, they know that the best waiters, just like the worst, form strong opinions. The difference between the best and the worst is that the best waiters use their quickly formed opinions to tailor their style to each particular table of customers, whereas the worst are just rude—average waiters form no opinions and so give every table the same dronning spiel.

And the best . . . .

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit, Line of Sight