I recall it clearly: I was working with a small manufacturing team that was looking to break out of their current niche. We had begun doing work on the business model canvas and Growth Zone principles. We were looking for opportunities in Quadrant One (which is the core), but seeing their strengths and weaknesses effectively in the warm-up SWOT exercise proved challenging.
It was then that I suggested something radical: what if instead of doing the SWOT, we used the business model canvas to design a competitor instead? Not just any competitor, but a nightmare of a competitor that was using their strengths against them.
Using the business model canvas, we started on the customer-facing, right-hand side – cherry picking great new customer segments and building a killer targeted value proposition for those customers. We looked at the engagement paths and designed an amazing support structure that was augmented with strong digital support.
Then, we looked at the “backroom” (our internal capabilities) of the business model canvas and granted our competitor strong talent in support of what we’d just designed, as well as processes that made the firm a scalable engine of success.
Lastly, we talked about who could help our competitor from an upstream partner point of view. We picked best-in-class partners that could really bring something to the party. We chose those who were not just competent, but would make us better.
We flipped the business model to include lean structures that would cut down on inventory, be a win-win for the customer and make our cash flow better.
And guess what?
Now we could really rock our SWOT analysis.
It turns out that we all have this picture of a feared area of competition that we usually don’t let out of the closet. Yet, this group of executives had just broken through a planning barrier by letting that scary monster out.
Having a “straw man,” best-in-class competitor drives a much stronger analysis of strengths, and most importantly, gaps for the firm. There is something about this exercise that wakes up the human psyche – we are all loss averse.
Needless to say, the strategy work accelerated. We came up with truly robust plans for the firm which led them into the niche they had outlined in our “fictitious” exercise.
Applications:
- Many times I have been told, “We are in a commodity business and don’t have a way to differentiate.” What this exercise quickly exposes is that there are very few true commodity businesses. The fact that you can create a competitor with significant advantage shows that there are very real differences and potential advantages.
- The second thing I’m told is that “We are in a protected niche and this stuff is for those who are in the mainstream market.” I travel a great deal, and not a day goes by that I don’t drive by the empty hulk of a once thriving business. The truth is that free-market competition is cruel and beautiful at the same time. There isn’t a niche that is immune to good, old-fashioned ingenuity.
- It’s about mindset. If you are using words like “defending” and price bundling to sell “legacy” services and products, you are on your way to disruption. If you can embrace a mindset using an exercise like this (not everyone can), it will shift you from defense to offense and allow you to use your incumbency as an advantage and not a hinderance.
Needless to say, this exercise has become a go-to tool to help firms break loose from their mindset anchors. If your strategy work has grown stale, and you have this feeling like there may be someone out there ready to disrupt you, this allows you to see into the blindspots. I have seen both small, private and big, publicly-traded firms break through thought blockages in this way.
If you’d like to consider a private session to do this diagnostic approach, drop me a line at scott@scottpropp.com, give me a call at 847-651-1014 or click here to set up a no-strings-attached, 20-minute phone call.
