DIFFERENTIATING ACTIVITIES
5 ( 3 – 5 HOWS )
Competitors can pursue owning the same words , make the same Brand Promises , and offer the same guarantees . However , HOW you deliver on your promises is where differentiation occurs . Kevin Daum , author of “ ROAR ! Get Heard in the Sales and Marketing Jungle : A Business Fable ,” says , “ A true differentiator can only be defined as something your competitor won ’ t do or can ’ t do without great effort or expense . Often , these can take years to develop because if it can be done cheaply , easily , and quickly , it provides little or no competitive advantage .” The key is to make HOW you go about delivering your products and services in your industry nearly impossible for your competition to copy .
X-FACTOR ( 10X – 100X UNDERLYING
6 ADVANTAGE )
Normally invisible to customers , this edge underpins the strategic activities described above and blocks competitors from even trying to copy . And , it typically addresses a huge , established choke point in an industry .
So , how do you figure out an X-Factor ? Start by asking , “ What is the one thing I hate most about my industry ? What is the choke point constraining the company ?” It could be a massive time factor . The challenge is that you ’ re often too close to the situation and just as blind as everyone else to the real problems that have been accepted as industry norms .
One clue to the source of the X-Factor is going back to your last 10 trade association meetings and gathering the titles of the various breakout sessions . Put them in an Excel spreadsheet and see if there are any patterns of challenges facing your industry over the past decade . By focusing on these roadblocks and figuring out a 10x – 100x advantage , you ’ ll have a huge leg up on the competition .
PROFIT PER X ( ECONOMIC ENGINE )
7 AND BHAG ® ( 10- TO 25-YEAR GOAL )
NOTE : Your BHAG ® should be measured in the same units as the X . This is a key point . Since Southwest Airlines is focused on profit per plane , it made sense that the company set a long-term goal to have X number of planes in the air . The Profit per X and the BHAG ® need to align very tightly .
Microsoft ’ s BHAG ®
“ When Paul Allen and I started Microsoft over 30 years ago , we had big dreams about software . We had dreams about the impact it could have . We talked about a computer on every desk and in every home . It ’ s been amazing to see so much of that dream become a reality and touch so many lives . I never imagined what an incredible and important company would spring from those original ideas .” – Bill Gates , June 15 , 2006
The payoff is huge if you figure out all of the attributes of the 7 Strata . As with all our tools , nail down what you can and keep moving . Set up your strategic thinking team , have each member read ( and master ) one of the referenced books or articles , and start testing your theories and honing your strategy to perfection . You ’ ll know you ’ re on the right track when sustained revenue growth and great margins start coming more easily .
It ’ s very difficult work , and your strategic thinking team may feel both lost and outright dumbfounded in the beginning , but trust the process . Keep meeting each week and talking through the ideas , and answers will come to you . n
The Profit per X metric represents the underlying economic engine of the business and provides the leaders with a single KPI they can track maniacally to monitor the progress of the business ( a great luxury to have ). Though the numerator can be any metric you like — profit , revenue , gross margin , pilots , routes , etc . — the denominator is fixed and represents your company ’ s unique approach to scaling the business . It generally ties back to the One- PHRASE Strategy .
Big Hairy Audacious Goal ( BHAG ®)
As leaders set the ultimate long-term , 10- to 25-year goal for their companies , we see a lot of sloppy work : a random number or statement of aspiration with no real connection to a company ’ s underlying strategy .
26 | MSPSUCCESSMAGAZINE . COM • VOLUME 2