Sustainable Competitive Advantage

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May 4, 2010
Big words, big idea and a big deal in business these days.  I am still deciding whether this is the latest business "buzz term" or if it is substantial enough to have a long term impact on how we do business. 

I recently attended the Staffing Industry Analyst Executive Forum in Las Vegas and heard Greg Palmer speak on this topic.  I was drawn in by the obvious nature of the content combined with Greg’s treatment of how you define and develop this "uniqueness".  The basic tables and visuals Greg used made a complex topic seem easy to grasp, but the overwhelming nature of finding your own sustainable competitive advantage in the true sense of the term left me with my head sort of spinning. The ideas presented in Vegas were further explained in a recent article in Staffing Success Magazine distributed by the American Staffing Association.  If you are a member, you can check it out.

Sure, it is easy to see how the big companies like Southwest Airlines, Intel, Nordstrom and Ritz-Carlton can demonstrate their unique ability to deliver operational excellence, Product innovation or customer intimacy – but to apply this concept to a locally owned and operated single office like ours is a whole different story. 

At That’s Good HR, we are loud and proud about our superior level of quality service that we provide.  We even went so far as to put it to the test with the Net Promotor score survey administered by a third party to demonstrate that over 85% of our customers gave us a 9 or 10 out of 10.  However, according to what I heard Greg Palmer say, "the misconception that your business is unique because you treat your  clients well and provide excellent customer service is keeping you from achieving your revenue goals." 

Now, I do not fully agree with this analysis when you truly are exceptional in these categories, however, there is definitely truth to the fact that you cannot rely on this alone to take you to the next level in this business unless you use this as the groundwork to demonstrate Operational Excellence or Customer intimacy that your prospects and customers see as valuable.

Wikipedia defines Competitive Advantage this way:
"Competitive advantage occurs when an organization acquires or develops an attribute or combination of attributes that allows it to outperform its competitors. These attributes can include access to natural resources, such as high grade ores or inexpensive power, or access to highly trained and skilled personnel human resources."

So what is required for a sustainable competitive advantage is to identify and specialize in a combination of attributes that are relevant, not easily duplicated and that have longevity.  Excellent service provided by a "service" industry such as ours is truly a competitive advantage, however, we are and must be consistently focused on other attributes that provide sustainable value not easily duplicated by our competition.  This takes work and a focused strategic initiative to not only identify but to nurture, build and maintain your competitive advantage.

We have identified ours, how about you?