Oh, Out-Behave!

Outperforming the competition isn't enough. Focus on how you do what you do, and build a culture that inspires workers to connect

by Marshall Goldsmith

Dov Seidman is the author of How: Why How We Do Anything Means Everything…in Business (and in Life) and the chief executive of LRN, a company that helps businesses develop ethical corporate cultures. He and I recently spoke about the ideas in his new book that dispel the so-called tried-and-true notions of finding success in business and outline the new path to achieving sustainable advantage. I agree with Dov's view that how you do what you do means more today that ever before. Read edited excerpts of our conversation:

MG: You say that how we work and live can be even more important than what we do. What do you mean by "how"?

DS: Today's world connects us—and reveals us—in ways we have only just begun to comprehend. The flood of easily and universally accessible information has dramatically changed the dynamics and rules of business. Results are not the only barometer of success in a world in which people can also judge how you achieve those results. So notions such as "business is war," "survival of the fittest," "by any means necessary," and "just do it" no longer apply; they encourage behaviors that, when discovered, threaten the very success they hope to achieve.

It is not just what we do that makes a difference; it is how we do it that matters. Through years of practice and personal observation, I've come to believe that how individuals and companies think, behave, and govern themselves can set them apart, facilitate stronger relationships, and enable greater successes.

MG: So, how isn't just about how companies can protect themselves and their reputations in a new, transparent, and connected world?

DS: No, in fact, it is about just the opposite. How is about finding greater rewards by turning the specific conditions of the 21st century to your advantage. We are hyperconnected, which means we work with diverse teams of people in diverse places across the globe. We are hypertransparent. We live in a world where nothing stays hidden. Companies operating in this new world have a choice. They can either hunker down and avoid exposure or can go from defense to offense. Leaders today recognize that how we do what we do is not defensive, it is all about taking charge.

MG: Is that what you mean by out-behaving the competition?

DS: If you make something new (or just better, faster, and cheaper), you may out-perform a competitor, but the advantage is short-lived. Our whats—products, services, and processes—can be easily duplicated and reverse-engineered. Competitors can quickly improve on and deliver them at the same or an even lower price, effectively rendering almost everything a commodity.

Out-behaving the competition is about how you do what you do. If you keep promises 99% of the time and your competitor keeps theirs 80%, you can gain critical advantage in the marketplace. If your interactions with others deliver a more meaningful customer experience, you engender a loyalty that brings them back again and again.

If you make stronger connections and collaborate more intensely with your co-workers, encouraging them to take risks and innovate, you win. Our hows—our values, principles, reputations, and cultures—provide advantage and sustain us over the long term. These are the things that define how we collaborate with co-workers, how we inspire more people throughout our global networks, how we interact with—not just serve—customers. These are the things that cannot be copied.

MG: You mention a distinction between serving and interacting with customers. How is out-behaving different from good old customer service?

DS: Customer service has become commoditized. Every employee knows they must answer the phone by the third ring, greet customers with the company tagline, direct customers to goods and services, often walking with them to ensure they find the goods they are looking to buy. Out-behaving is about what happens during the walk. It's about interacting and connecting with customers in a way that delights them and serves them in the process.