12 Sep Hypercompetition- Davids vs Goliaths
It used to be that incremental innovation was enough to compete in a mildly competitive marketplace with long product life cycles. Today, product cycles have been expedited. Innovation comes fast and hard and often. You may be wondering what the big deal with innovation is anyway. Why should we worry about innovation when our company is doing just fine, you ask? Those are valid inquiries and I have one word to offer in response: hypercompetition.
The core concern that hypercompetition presents businesses of every kind is unsustainable advantage. The technological advancements of the last decade have led to a rapid escalation of competition. The internet, networking, and crowdsourcing have all made it viable for five-person teams (the Davids) to complete the same work, and many times improve on it, that would have required a 10,000-person company (the Goliaths) in the past. This creates constant fluctuation for the market and rules. Past standards no longer apply and the new ones that form to fill their absence are ephemeral or fleeting. What this means for businesses and entrepreneurs is that even if you obtain success either in profits or a competitive advantage, it will not last for long. You can no longer corner a market and rest on your laurels while you count your cash.
Companies now need to be agile in their operations. Strategies can no longer be dependent on a 10-year contingency plan that’s glued to the tracks. The key to producing and prolonging the advantage in the modern market comes down to flexible maneuverability. In actuality, hypercompetion is less reliant on strategy (a large plan used to achieve broad goals) and more focused on tactics (a method used to achieve subgoals that support an overall mission). What I mean is that broad goals are too far flung into the future to be reliable endpoints. You may get there and find that it was the completely wrong destination for your company. Leaning toward tactics that are still informed by an overall strategy provide you with maneuverability. Instead of being a steam locomotive only able to chug slowly to its next destination, the business metamorphosizes into a Ducati motorcycle, able to change direction on a dime without losing momentum.
For a company to stay at the top, defending the fortress is not enough. Businesses must be constantly on the offensive. Hypercompetition has overturned the adage “the best defense is a good offense.” In the hypercompetitive age, offense is the best and most important defense. The Innovation Economy demands persistent market disruption from businesses that want to remain in the lead. What are market disruptions but another way of describing innovation? These disruptions operate on a surprise attack model, coming to market seemingly out of nowhere. The Goliaths, the multi-billion dollar corporations that have not dealt with a serious threat to their bottom line since the company was founded 50 years ago, are the most susceptible to these attacks. A David can move in and with one well-executed act of risk-taking look as appealing to the consumer as the well-known and regarded Goliath. The lack of organizational weight enables the David to make decisions that disrupt the current standards. These small and nimble companies are using slingshots when everyone else is using two-handed longswords.
- Slow to change
- Too big for efficient decision making
- Obsessed with outdated methods for keeping out the competition
- Bogged down by bureaucracy
- Afraid to take risks
- Fast iteration and turnaround
- Low numbers makes for quick decision making
- Interested in disrupting markets
- Willing to incorporate new methodologies
- Driven by courage
- Pivot on a dime