In our highly technical and global society, markets are becoming increasingly complex and dynamic. The fast pace of change has brought new challenges for business leaders increasing the need for faster reinvention, anticipation and agility. How do we strategically lead to gain competitive advantage? Kevin Uphill, chairman of Avondale, offers seven steps to creating a competitive advantage
1. Move to leadership from management
To create competitive advantage, leaders need to anticipate customer needs more effectively. This takes listening, research and the free space to think creatively. It is easy to get bogged down in day to day management of stake-holders, governance and politics. These leaving minimal time for leading; anticipating customers’ changing needs and trends, examining the emerging opportunities and designing the business around clearly communicated strategies that take advantage of the changing opportunities; to create advantage.
2. Map the line of probability
The importance of anticipating where the market is heading, the line of probability, increases in keeping with the acceleration of change. 15 years ago there were no smartphones or Google; Amazon and eBay launched in 1996, when there were 16 million internet users; there are now over 3 billion. These major developments happened over a very short period of time and caught many key businesses out. We must remain conscious of new developments as it is easy to be caught by surprise and fall behind.
The past explains more fully where we are now and therefore increases the accuracy of our understanding of where we are likely to go. This is mapping out the ‘line of probability’. With a truly open mind, think about where your sector and comparative sectors are today and where they are going.
3. Observe data, intelligence and research
Analysis and research can help build a better picture of the line of probability. With the right systems, and by asking the right questions, we can target the strategy more effectively. Big data is as you would expect: big, but what makes it interesting is the ability to capture and analyse large and complex data sets, allowing for improved decision-making and business practices, as well as tailored products and services in many different industries and fields. What are people’s buying patterns? How does the pricing of goods affect sales in real time?
The key with ‘big’ data is to actually think ‘small’. There are very few important numbers needed to understand the possibilities and probabilities. The top role of the data is to have a better dashboard and thus visibility of what is occurring in our market and our organisations today.
4. Create predictive models
The aim of predictive models is to create simplicity from complexity in order to help leaders to make the right decisions, to reduce surprises and leverage opportunities with insights about the future. There are two main models that are helpful. The first is essentially a ‘dash-board’ of today that will combine the line of probability, intelligence and research. The second depicts various strategic models to achieve competitive advantage.
Simplified models can also be used as an exceptional communication tool; creating a bond within the organisation as everyone from senior leaders to front line employees across business lines and functions share a common language to communicate their insights into future possibilities.
5. Decisively create new strategies
Mapping out the line of probability enables leaders to seek new ways, changes and ideas to do things differently and exploit opportunities to gain competitive advantage. Better decisions are made when and blend of analytical and intuition approach is employed. All initial suppositions and theories should be tested by logic and analysis of facts with a balance of styles.
There may however be a myriad of strategies, we must focus and select the best ones. Focus is about selecting and backing the few exceptional ideas with absolute determination. Strategic initiatives need to be clear, short and based around a few very simple ideas only.
6. Lead adaptive organisations
To implement strategies and create competitive advantage, we need adaptive, supportive management. This requires leaders to create a shared vision and to constantly identify, reward and encourage “intrepreneurs”, the innovators within the businesses and managers who create adaptable teams.
7. Design business
Having set the strategy to gain competitive advantage, it is time to look again at the whole business and design it to ensure it is aligned – the right people in the right roles with the right infrastructure, and capacity based on your aspirations and the advantage you seek, not on the history of previous strategies. It is important to recognise in this phase of creating advantage that it is often better or required to go backwards before you go forward. The concept of Business Design is essentially for the leaders to audit every component of the business and ask is it right for where you or the market is going.
IoD Conference: Creating Competitive Advantage, Strategies for Success in Changing Markets
7 February 2017, 116 Pall Mall, London
There has never been a more important time for business leaders to be agile. But how do you stay ahead of the pack when the economic environment is global, ultra-competitive and in a state of flux? This conference will turn you into a trend expert and equip both you and your business with the right tools to gain a competitive advantage.
IoD Business Sales, Mergers and Acquistions
In association with Avondale, the IoD now provides a new member benefit, IoD Business Sales, Mergers and Acquisitions. To find out more, please call 01737 234892, email or visit iod.com/buyandsell