If all the traditional competitive advantages have evaporated, what can you possibly do to get and stay ahead? Today, and into the next century, you need to recognize that in order to compete effectively you have four, and only four, sustainable competitive advantages left. Ones that can never be bettered by your competitors—if you protect and nourish them. They are:
1. Your Knowledge.
2. Your Marketing.
3. Your People.
4. Your Systems.
These advantages are the essence of a thriving business. It’s divided into sections that deal specifically with issues critical to building wealth and success in each of these four areas.
1. Your Knowledge (You)
Your personal knowledge is the bedrock of anything you want to achieve. The knowledge you have and you gain is what distinguishes you from everybody else. You must recognize that the rich, who earn possibly 100 times more than you do, aren’t 100 times smarter, and don’t work 100 times harder. They just know more—they know the rules of business and making money. And they are always willing to learn more.
How powerful is knowledge?
Let’s use an example. Say you were driving along at 100 km per hour and you knew something nobody else on the road knew—that there was a speed trap waiting round the next bend. Wouldn’t that information be useful (and worth money) to you? What if you knew that there was a broken- down truck blocking the road, one that could cause a fatal crash at that speed? Wouldn’t that knowledge be critical to you? What if you knew in advance the winning horse in tomorrow’s race? Or what next week’s Lotto numbers might be?
How much would this knowledge be worth to you?
Knowledge is a very powerful thing for those that possess it. Rich people know this, and are aware of the continuing need to learn as much as they can to allow them to maximize their opportunities and to minimize their mistakes. This knowledge, which the rich constantly build on, extends to other areas—like knowing and acting with the right values. The rich not only gather the facts; they have. And follow strong personal values that lead to success. Values such as passion, commitment, focus, persistence and honesty. These, too, underlie the important difference between the truly successful and all the rest.
2. Your Marketing
Marketing is your second critical advantage. Marketing is the machine that drives your business. Good products can fail, and yet second-rate products will monopolize a market. Why? Because of the power of marketing.
Good marketing brings people to your door—people who are happy to part with their money and exchange for your products or services. Marketing is the key function that can quickly make or break any business. And because of this power of marketing, it is too important to overlook or delegate: it’s something you must understand for yourself.
The reason great marketing will give you a sustainable competitive advantage is because it’s an aspect of your business your competitors just cannot copy. Not many people realize this.
Unfortunately, much marketing is wasted. You’re probably paying the price right now, by underutilizing this important part of your business. Badly managed marketing is the single biggest waste of money you will ever experience, and one of the single biggest frustrations and causes of failure.
Most of us somehow continue to accept less-than-acceptable rates of return on our marketing money. Or we throw up our hands at its ineffectiveness and stop using it at all. That is the most fatal of all business mistakes!
Let me give you an example of what I mean. Take two advertisements costing exactly the same amount. They can pull a hugely different number of customers and profits. A simple difference in one ad can make tens of thousands of rupees’ difference a day, a week or a month to your business—depending, of course, on your business. And that’s only looking at one part of your marketing strategy. Marketing that is used well is rare, yet so powerful when it is!
What impact does this advantage have on your business? Simply put, you can be five, 10 or 50 times more successful than your competitors just through effective marketing. Isn’t that where you’d want to be?
3. Your People
Your people are your greatest asset—not your brand, equipment or products. They are the ones who make your products or services, find your customers, sell to them, and do everything else that makes your business a business.
Yet at about 5 p.m. each night your assets get up and leave, and may not even return the next day. When you realize this, you realize business is all about people, nothing else. Look after your people and the business will look after itself. This sounds quite obvious, I know, but not one in a thousand businesses does this well.
No matter how good your product or service is, your entire business depends on people creating, producing and delivering it to the customer. In this process many things can, and will, go wrong.
It’s only the skill and care that your people take in your business that will give your company the edge. If your people are sloppy, careless, under skilled or de-motivated, this will show up in the way they deliver your product or service, and in the way they deal with your customers. A state-of-the-art manufacturing facility is pointless if your receptionist doesn’t answer the phone properly, or upsets your customers. What good will the best-looking store front be, if your sales assistants are ignoring your customers?
But if your people are switched on, motivated and totally focused on serving the customer, you’re way ahead, your competitors can never copy the effect on a business of staff who enjoy their work, who have fun with customers, and who actually care about them. No matter what your competitors do, they can’t go out and create this just because they’ve seen that you have it.
Getting and keeping good people is one of the most difficult thing in business. It’s also one of the most valuable. Because it puts you far ahead of your competition and helps you stay there.
Employing people is easy. Employing the right people is another matter altogether. Those people you employ create your business. They create its culture, its service, its quality, its reputation and, ultimately, its profit.
The basic principle is: If you hire someone great, you become great and your life will become easier. But if you hire the wrong person you undermine your lifestyle and the value of the business.
Hire people with better skills and a bigger vision than you have, and you create a great business. But to be able to hire the right people, you have to know how to select them. How to test their qualities and how to get the most from them? Like marketing, hiring (especially for key positions) is too important to leave to other people.
4. Your Systems
Many people are still confused about systems. What exactly are they, and why are they so important? For the moment it suffices to say that systems are the only way to guard your valuable time, and to use it to build the business instead of using it just to keep going.
When you run a business, you need a huge set of skills. Your time is valuable; you’re highly productive. What systems do is free you to pass those skills onto others, through procedures and processes, so they can do high- value, high-revenue work at a much lower cost. This in turn frees you up to develop your systems further, to make them more profitable, and to bring in new business and more revenue.
Systems move you from being paid for your labor time to being paid for your ideas. They allow you to expand comfortably, or to step back from the business and let it run itself. Systems bring you the freedom that probably attracted you to the idea of business in the first place. And with that freedom comes true success.
Thank You.
Chandan Mundhra.
