Outperforming by 'Outbehaving'

In today's hyperconnected world, power increasingly is derived through people—through relationships, authenticity, transparency, and openness

by Dov Seidman

The source of sustainable competitive advantage in the 21st century is such a new idea that the term has not yet entered Webster's or Oxford's. You will not find "outbehave" in the dictionary—not yet, anyway.

What you will find, just below a definition of the prefix "out" ("in a manner that exceeds or surpasses and sometimes overpowers or defeats"), are dozens of words that describe deeply engrained habits of how we think and act. These terms—outproduce, outsmart, outprice, outfox, outspend, outthink, outperform, and many others—are remnants of pre-21st century human endeavor and business interactions. We learned, practiced, and embraced these thoughts and actions in an era when what we did mattered far more than how we did it.

By understanding why these old habits no longer provide a sufficient or lasting competitive advantage, 21st century business leaders can begin to help their organizations with the challenge of embracing behavior as an unique and renewable source of sustainable differentiation.

FROM COMPETITIVE DIFFERENTIATORS TO COMMODITIES

We all want to stand out, be uniquely valuable, and distinguish ourselves from the competition. Until recently, those sources related to what we did.

But in our commoditized world, we are running out of areas of differentiation. In trying to find them, we look for the sources of great variation. There is one area where tremendous variation and variability still exists—one that we have not yet analyzed, quantified and systematized and one, in fact, that cannot be commoditized or copied—the realm of human behavior.

Previously in business, finding advantage meant differentiating ourselves from the rest of the herd based on the products we produced, the supply chains we used to get our products to market quicker than the competition, and the service we provided to customers. If we outproduced, outsped, and outhustled rival companies, we also outsold them and "overpowered" the marketplace. This advantage was sustainable for longer periods of time in a less connected world, one in which it took competitors longer to catch up.

Today, we live in a hyperconnected world thanks to the explosion of communications technology in the late 20th century. Since hyper-connectivity breeds hyper-transparency, everyone can instantly see what we do and how we do it. As a result, everyone has grown much more interested in how we do what we do. This is especially true of our competitors, who can quickly see, study, and reverse-engineer our best-in-class supply-chain management processes, innovative product designs, and lightning-quick customer response times.

Hyperconnectivity and hypertransparency explain why so-called competitive advantage now lasts only weeks and months when it once endured for years and decades. We're running out of areas in which we can stand out because previous forms of competitive differentiation are quickly becoming commodities. Every service center can answer a telephone call before the second ring or an e-mail within a few hours. Any manufacturing company can develop just-in-time inventory practices. Almost any gee-whiz product can be copied by an agile overseas competitor and sold at a much lower price point.

What can't be copied is how the company pursues these strategies.

How a company approaches its decisions and how it executes them is as important as the decisions and actions themselves. But a company's how approach isn't defined by the hiring of a customer experience officer or mandating rules of engagement—those strategies are "whats" that can copied or reversed engineered. Instead, it is defined by the extent to which it pursues its aspirations with authenticity, openness, consistency, and with fidelity to its values and principles.

In the retail environment, for example, every employee gets trained on how to greet customers with the company tagline and direct them to goods and services, often walking with them to ensure they find the goods they are looking to buy. How is about what happens during the walk.

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