This must be the single most asked question to MBA and has been for some time. Lets face it ours was a competitive sector before the latest macro economic woes and everyone wants to know how they are doing compared to the competition. The present market turmoil simply accelerates the process of natural selection.
Confidentiality is a key factor in our business, it has to be or we would have no business! goes without saying but even so comparative financial performance is in the public domain and customers are only too happy to tell you how the competition is (not) performing. So it is possible to compare without having access to any confidential information, just look around you.
This is a sector where no one has a unique product (sure there are differences but nothing that gives a clear competitive advantage) so no Microsoft. No one has a unique route to market, no Direct Line (although that was copied quickly and is no longer unique) and no one has a unique manufacturing process so no one to compare with Pilkington at the height of their patent. However there are clear differences in company performance. It would be wrong to say that anyone is doing particularly well at the moment but there are businesses out there that are still making money and some at the other end of the scale that face clear and present threats. The answer to the question is always …. “it’s a mixed bag” the only thing that changes is the proportions…. In a growing market more do well than fail and in a challenging market more fail than do well. The real question is why?
Sometimes it’s strategy, old business models that worked fine in the past don’t necessarily fit a company for the future (Are we seeing the end of the (window) world as we know it?) and no doubt there are still some companies out there that haven’t thought ahead and many are frantically now trying to catch up (or worse are “waiting for things to get better”!) strategy ‘on the hoof’ and reactive at best. Just look at the number of people playing the ‘diversification’ card now. Markets and customers change and in today’s world are changing ever faster. Listing the examples above of companies that had unique advantages in their markets brings home the point about how fast a unique advantage lasts before it is copied or bettered. Microsoft, a world beater if ever there was one is going to get swallowed by the internet revolution if it doesn’t change and even a company of that size and power acknowledges that it will become irrelevant if they don’t address the model.
Sometimes it operational excellence, you can bet your last £ that your competitors (or any worth worrying about) are striving to improve and even those companies that sat comfortably on ‘acceptable’ profits in the good times are now seeing those eroded and addressing their operational performance.
You could argue its luck and being in the right place at the right time has made many a fortune in our sector but you need to put yourself in a position to be lucky (no one wins the lottery without buying a ticket!.
All these factors share one common element people! Good people formulate and even more importantly deliver good strategy. Good people deliver operational excellence and good people work hard and put themselves in front of…. and then take, opportunities.
By asking “How is everyone else doing” the enquirer is usually saying “what are they doing that I should be?” and the answer is clear, Recruit, Retain and Develop Top Performing Teams of people. Winning the Talent Wars is not optional and as a client of ours with more millions that I care to count says…. “Survival is not a right.”
Chris Ball is a Director of MBA and a member of the institute of management consultants, MBA Associates Ltd is a specialist consultancy that partners clients to Recruit, Retain and Develop Top Performing Teams. Using sophisticated and proven methods that are different to the usual recruitment agency MBA has an enviable track record of Job Matching with currently over 70% of candidates recruited still in post or promoted within the same group after one year (statistics from Harvard Business review show 14% success rate is average on CV alone!) MBA can be contacted on 01242 821 432, firstname.lastname@example.org or through the website at www.mba-associates.co.uk
© Chris Ball August 2008