Jeffrey Phillips & Alex Verjovsky, Authors, OUTMANEUVER: OutThink, don’t OutSpend
As a CEO you know how much pressure there is to perform. You want to hit the ground running, but you cannot afford to make too many mistakes. Your board and your investors expect growth. Customers demand new products and exemplary service. As a CEO I grew a biofuels startup from an idea to over $12 Billion in sales, and I was constantly under pressure to succeed. Some of the questions I asked myself were: Should I continue with business as usual? How can I make any significant changes at an acceptable risk level? I found an answer in maneuver strategy.
Unlike traditional business competition that is locked in an undifferentiated struggle to gain a few percentage points in market share, maneuver strategy seeks to win an inordinate share of profits at the least possible cost by obtaining an in-depth understanding of the competition, the market or industry and emerging customer needs. You may think your team understands your competitors’ products, but they may lack insight into emerging needs or competitors’ weaknesses or potential future actions.
In OutManeuver™ we present a new approach to business strategy. This approach is based on understanding the competitor and the market place from a different perspective. Maneuver seeks to win by leveraging speed, agility, insight and innovation rather than size and strength. Rather than overwhelm a competitor, maneuver seeks to render your competitor irrelevant.
Attrition versus Maneuver
For years, the predominant competitive strategy has been “attrition”, matching competitive products feature to feature in long campaigns against equally matched competitors, seeking to squeeze out incremental market share. Attrition strategy is borrowed from the military, where attrition is used to defeat an enemy by overwhelming them, regardless of the cost. When markets are stable, new entrants are limited and consumer demand doesn’t shift much, size matters, and an attritional strategy can make sense. However, as new entrants proliferate, markets shift rapidly and consumer demand grows, competing on size and an attrition strategy can lead to disruption and disaster. Instead, corporations of all sizes should consider introducing more maneuver strategy into their thinking.
Maneuver is also borrowed from the military, but instead of head to head competition, maneuver seeks to win valuable, unoccupied spaces, or when forced to compete with an incumbent, maneuver strategists carefully assess competitors to identify vulnerabilities that can be attacked in such a way that incumbents are forced to cede positions or share, or cannot compete with their full capabilities. Maneuver is always surprising, always unconventional and always seeks to win the most at the least possible cost.
How does maneuver work?
Maneuver works by gathering insights and intelligence about competitors, the market and emerging trends, first to identify valuable, unoccupied positions. If those are available, the maneuver strategist moves quickly and decisively to take the position and deny access to fast followers. If incumbents exist, maneuver strategists analyze four key factors about their opponents: their strategies, tangible requirements, intangibles and offerings to identify the most important vulnerabilities to attack. The subsequent attacks are always indirect attacks, meant to gain advantage, and frequently followed up by successive attacks, demonstrating mobility and keeping competitors off-guard, confused and guessing.
A few examples
In OutManeuver™ we demonstrate that a number of leading businesses are using maneuver to win. Zara, a new clothing retailer, has completely outmaneuvered other fashion houses and retail stores by accelerating the introduction of new fashions and by careful examination of sales data. Uber and Airbnb have completely disrupted existing taxi and hospitality industries, moving quickly to take unoccupied positions and continuing to innovate as the existing industries cry foul and seek regulatory or legislative remedies. The list goes on. In every industry and every geography we can find evidence of maneuver strategists winning over older, outdated attrition strategy. Apple, Tesla, Teva Pharmaceuticals and Southwest Airlines all demonstrate some features of maneuver.
How can you adopt maneuver strategy?
- First, change your competitive approach. Stop trying to match competitors feature for feature. Instead, seek valuable, unoccupied positions.
- Second, start gathering insights into your competitors, your markets and emerging trends to identify new opportunities that you can take without fighting. Take more time to analyze your competitors and their products, discovering their strengths and weaknesses. Identify the most significant vulnerability that you can attack, to force your competitors out of the market.
- Third, understand that the new competitive realities require not just speed but movement. Becoming static, unable to move quickly or accelerate leaves you at a significant disadvantage. Innovate regularly based on the new insights you gather.
- Fourth, be unpredictable. Attack where you aren’t expected, where you can surprise and disrupt or distract your competition, then move and attack again, while they are still comprehending what happened and gathering themselves to respond.
If you need further evidence that speed, agility and innovation are valuable, look no further than the chart developed by a financial analyst, who wrote that the:
- Largest taxi services owns no taxis (Uber)
- The largest content provider doesn’t create content (Facebook)
- The largest hospitality company doesn’t own hotels (Airbnb)
Strategies are shifting, as speed, agility and innovation become far more important than size and strength. Is your business capable of conducting maneuver strategy? If not, it will be left in the dust.
[Image courtesy of Stuart Miles at FreeDigitalPhotos.net]
About the Author
Jeffrey Phillips and Alex Verjovsky are the authors of the new book, OUTMANEUVER: OutThink, don’t OutSpend (March 2016). Phillips leads OVO Innovation, an innovation consulting company in Raleigh, NC. Verjovsky is a consultant, an entrepreneur, and a pioneer in the biodiesel market.