The Competitive Advantage

What Is It?

By Betsy Barbieux, CAM, CFCAM / Published February 2016

Pavers pave. Painters paint. Managers manage. Cable providers provide cable service. Reserve specialists prepare reserve studies. Insurance professionals sell insurance. Accountants prepare financial statements and tax returns.

So why should a board of directors choose your company? What makes you different than your competitor? What do we get from you that we can’t get someplace else? In some cases, pricing may be competitive. But if price isn’t a factor, what is? Since some companies have access to the same product, the type of product may not be a factor. So if product type isn’t the issue, what is?

Maybe the board of directors should choose your company because of what lives within. Is it because you have the smartest people working with you? Are you top rated in technology? Did you pioneer the latest advance in your industry? Is your bottom line impressive? Are your stakeholders receiving a consistent ROI? Do you excel in customer service? Is your mission statement visible to all who work there? Are your employees rewarded with the highest pay and benefits?

Or maybe the answer lies in mastery of the six core business disciplines:

• Enhancing customer loyalty
• Dynamic planning and budgeting
• Executing the business plan
• Maximizing leadership effectiveness
• Changing the emphasis from sales/revenue to margin/profit
• Positioning human resource management as a strategic asset

Are you a small company thinking, “If I can’t answer ‘yes’ to all those questions, how can I compete with others in my field?” Or, are you saying, “I don’t have a master’s degree in business and the six core business disciplines! Nor do I have time to get the degree; and I don’t even want it!” Just because you can’t answer ‘yes’ to these questions nor do you have a master’s degree in business, don’t close the doors and quit yet.

What if answering ‘yes’ to all those questions, whether you are a large or small company, does not give you any competitive edge? What if all the business degrees, dynamic leadership programs, profit margins, and comprehensive business and marketing plans don’t give you any competitive edge? Well, if all these things don’t give you the competitive edge, what does?

More and more experts are identifying another factor that creates the opportunity for improvement and the competitive advantage. It‘s a factor most leaders will acknowledge, but because it’s hard to quantify and somewhat on the ‘soft skills’ side, they avoid talking about it. In some cases, leaders think this other factor is ‘beneath’ them. They are biased against it in one of three different ways:

• The competitive advantage  is too simple
• The competitive advantage takes too long; it’s not fast enough
• The competitive advantage is hard to quantify based off of the the financial impact

So what is the competitive advantage? Simply put, it is organizational health. Organizational health is not the same as the business discipline of organizational development (OD). Signs of good organizational health are these:

• Minimal politics; less confusion
• High degree of morale and productivity
• Very low turnover among good employees

Organizational health uses both sides of the brain—the left side is Smart and the right side is Healthy. Both are required for success and the competitive advantage.

SMART • Strategy • Marketing • Finance • Technology

HEALTHY • Minimal politics • Minimal confusion • High morale • High productivity • Low turnover

What is interesting is that being Healthy makes your company Smarter. But being Smarter does not make your company Healthier. A healthy company frees up the frontal cortex of the brain (where thinking comes from), so that employees and leaders can think smarter.

Organizational health begins with four disciplines:

• Build a cohesive leadership team—this will be a small group that is honest and vulnerable; accountable; committed to the organization (as opposed to their departments); and leaves meetings with clear cut, active, and specific agreements around decisions.
• Create clarity—the leadership team knows and is passionate about why the company exists, is committed to a peculiar set of behavioral values, is clearly aligned around strategies that distinguish them from their competitors, and leaders clearly understand their specific roles.
• Over-communicate clarity—the leadership team clearly and regularly communicates to employees the company’s reason for existence, values, strategic anchors, and goals.
• Reinforce clarity—the leadership team ensures new hires are carefully selected based on the company’s values; are thoroughly taught the company’s reason for existence, values, strategic anchors, and goals; and coached to succeed within the company. Individuals who do not fit the company’s values are let go.

Meetings of the leadership team are productive and divided into several different types—daily check-in, weekly staff, topical, and quarterly off-site review. In other words, tactical and strategic issues are addressed in longer, separate meetings. Topical and other administrative issues are addressed during shorter daily or weekly meetings.

Organizational health is achieved over time by identifying, exploring, debating, clarifying, and embracing the following questions. Once identified, they are revisited on a regular basis.

• Why do we exist?
• How do we behave?
• What do I do?
• How will we succeed?
• What is most important right now?
• Who must do it?

As the New Year has recently begun, now is a good time for your leadership team to meet off site and explore the answers to these questions. Taking the time to do so, coming to an agreement about the answers, refining and clarifying the answers into concise strategies (anchors) that can be easily repeated and learned, and implementing your new strategy with commitment and accountability, will give your company the competitive advantage!