You're at the top of your game. You're constantly wooing your customers and clients with innovative products and services. You have talented and capable staff, ample cash flow and plenty of profits. In short, you have a competitive advantage.
So how can you stay on top? After all, being No. 1, means No. 2 is always breathing down your neck. (It's not always a picnic being No. 17 because No. 18 is coming for you, too.)
Trying to keep from losing your spot in an industry is akin to the childhood game, king of the hill. If you have any memories of playing king (or queen) of the hill, you know that it was a stressful activity. If you “won," glory was fleeting: It was only a few seconds before you were knocked over and soon tumbling down a grassy hill. Even the biggest kids didn't have much of a competitive advantage, if the others teamed up and mowed them down.
Competitive advantage isn't enough to keep you at the top of the hill. If you want your company to keep growing, you need to look for your weak spots and watch out for that mob coming for you. And you just may want to try to use some of these strategies.
1. Look at the people in your company.
Bryan Zawikowski is the vice president and general manager of the military division for executive recruiting firm Lucas Group, so he has some experience prying away talent from companies.
Losing important personnel could be a sign that something is wrong, he says. For instance, let's say you lose your top sales reps to competitors or they get out of your industry altogether. That can be a sign you're losing your competitive advantage “because they don't see a future with you," Zawikowski says.
Harsh, but okay. What else?
Losing people in your accounting department, could mean"they see the cash flow and can anticipate where things are headed," Zawikowski says.
And if key people in your marketing department leave, that could mean “they see the website traffic and SEO trends," and those metrics aren't boding well for your company.
“Ultimately, it all comes down to people," Zawikowski says. “Wise executives will notice indicators like this and will engage their people to stop the slide and get the company or division headed back in the right direction."
2. Pay attention to your business innovation.
When was the last time your company offered your customers or clients something extraordinary?
“In today's fast-paced business world, innovation is a survival skill. Like a shark, you can never stop moving, or you'll die," Zawikowski says.
Businesses that come up with new products and services that customers appreciate have a competitive advantage over the companies that remain the same day in and day out.
Sure, sometimes not changing is part of a company's DNA. Plenty of restaurants, for instance, will brag about making old-fashioned ice cream or offering home-cooked meals the way Grandma used to make.
But even those restaurants are likely offering delivery services or adding healthier menu items than your grandparents ever ate—or they're improving customer service practices or innovating their infrastructure behind the scenes. It's hard to argue that never changing business operations is a recipe for success.
3. Study your profits and losses to keep your competitive advantage.
Rodger Roeser is the CEO of The Eisen Agency, a public relations firm with offices in Cincinnati and Cleveland. He recently took on a client who had been steadily losing money for five years in a row.
“They went from a very profitable $10 million a year business to, in five years, making less than $250,000 and were down to three employees—all family members at this point," Roeser says.
According to Roeser, most of the company's problems had to do with leadership simply never wanting to change.
In Roeser's client's case, “the owner simply kept doing things the way they have always been done, and simply through attrition, the company gradually lost almost all of its clients—increasing the speed of losing more clients because there were basically no staff members left to serve the accounts."
(Take note that this client's employees were leaving, a sure red flag that trouble was brewing.)
In today's fast-paced business world, innovation is a survival skill. Like a shark, you can never stop moving, or you'll die.
—Bryan Zawikowski, vice president and general manager, Lucas Group
Part of the problem with losing your competitive advantage is that it isn't always immediately obvious, Roeser says.
“Much happens very gradually, like gaining weight," he says.
Within a year Roeser's firm has helped the client turn things around so that it's growing steadily again.
Still, the larger point is that leadership involves looking for methods to continually improve your company's performance. If your profits are steadily going down, that's a bad sign. It's typical for companies to lose business every year, Roeser says. The trick is to gain more clients than you lose.
“If you're not growing, you're losing," he says.
So if you want to be the king or queen of your hill—and remain there—make sure your business innovation is firing on all cylinders, examine those profit and loss statements, keep your employees happy and engaged and, by all means, be open to change.
If you can do that and keep your competitive advantage, you just may avoid a long and painful tumble down a grassy hill.
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