Competitive Advantage? Envision You
Envisioning is the initial creative act in business, whether you are an entrepreneur or executive, defining your role when entering a new job, reorganizing a department, or starting an entirely new company. It is the process by which you ask yourself, “what do I create, build, or change?” As we discussed in our previous article, the Old Business Playbook (OBP) tells you to choose the opportunity based on the market. However, the OBP is not aligned with the realities of the modern world. In order to increase the likelihood of winning in business, the rules we use for envisioning must be re-evaluated for this new era.
In order to create, you must first visualize. Many times, visualization happens without you having to consult your playbook. Maybe something pops into your head, and you go with it, or you fall backwards into something you had never thought about before. But right from the start, the road to success is fraught with unexpected twists and turns. You will come to a point where you get confused, or possibly stuck completely. And when that happens, whether you realize it or not, you will consult your playbook to figure out your next steps.
The OBP that you’re running is probably based on the belief that envisioning is a rational exercise with logical steps:
Gather information to understand your market
Use logic and analytical rigor to choose the opportunity that has the highest probability of success
The spoils of the business battlefield will come, according to the OBP, to those who can gather the most data and make the most logical choices given that data.
This makes sense given the world in which the OBP was developed. 150 years ago rational models were in vogue. As the principles of the Enlightenment and the scientific revolution slowly trickled down into everyday life, many areas of Western life were rethought: Utilitarianism, neoclassical economics, applied sociology, and psychology. Business was not exempt from this trend. The astonishing pace of progress in science and technology at the end of the 19th and start of the 20th century—electric lights, telegraph, telephone, moving pictures, autos, planes—gave rise to a sense that of course the rational model was the correct one. Just like it was for modernizing communication and transportation, modernizing productivity and profit meant dispassionate analysis and decision making.
Markets and productivity grew, and the rational business model was seen as an important reason for this success. Naturally it is difficult to know whether this was causation or correlation. Regardless, too much has changed since the invention of the horseless carriage for us to be confident about a business playbook based on theories developed during a time when arsenic and strychnine were common medical treatments.
In those halcyon days information was scarce, analytical methods were fairly new, and the set of available action choices was manageable. Choices and freedom were both constrained compared to our lives today. Often the business leaders who had the best vision were the people who were most skilled in data gathering, analysis, and execution. When Alfred Sloan visualized a new General Motors that would be more predictable, efficient, and profitable, he was essentially using the OBP exceedingly well to select market actions better than his peers. In many ways, Sloan was the high priest of the OBP. J.P. Morgan built a financial empire and dominated American corporate deal-making based on the OBP. His advice: “No problem can be solved until it is reduced to some simple form. The changing of a vague difficulty into a specific, concrete form is a very essential element in thinking.” This essence of OBP thinking worked, as long as it was possible for any one person or any one company to do this “rational thing” better than their competitors.
The world, however, has changed significantly in the past century—almost inconceivably so. Morgan and Sloan may have operated decades apart, but their realities are practically indistinguishable from each other compared to vast differences we see today. The barriers to marketplace entry seen at the start of the 19th century are far less than what they used to be. And as those barriers have decreased, the number of viable choices has increased. Hundreds if not thousands of sellers for any given item are now accessible from a device you keep in your pocket. The prices and availability of your local store can easily be compared to the prices and delivery of an internet wholesaler. And both might lose out to the deal offered by Big Jim in Baton Rouge, LA.
All these changes we’re seeing are being affected by a technological trend we call connectivity. Connectivity is the convergence of telecommunication infrastructure with global reach, accessible devices connected to that expanding global network, and applications such as search and mobile publishing that allow for the creation, accessing, and consumption of increasing amounts of information. Connectivity has given us the tools to be in frequent contact with more people in more locations than ever before. This has dramatically impacted the way business works. For instance, customers now have access to not only extensive price information, but a community of opinionated expertise (and sometimes misinformation) to which producers must respond.
Information is no longer scarce, and as such its strategic value has decreased. Everyone with a smartphone has access to vastly more information than the most well resourced companies of yesteryear. Every consumer and every entrepreneur is aware of the possibilities before them, and increasingly aware of the costs of suboptimal choices. The deeper an entrepreneur or executive tries to dig down, the more they try to determine the best course of action, the more bewildered they are likely to get. They may have access to more information, opinions, and options, but the same cognitive and emotional structures that harnessed fire and developed the wheel has to make sense of it all. The ability of the individual mind to handle this complexity has largely remained unchanged, and as the number of choices skyrockets, the ability to distinguish between them shrinks. Rational, analytical methods, democratized yet unable to provide necessary clarity, are no longer a competitive differentiator.
All these seismic changes in the world have been hugely disruptive to business. No longer can you win by being “more rational” than your competitors. The OBP tells you to gather and analyze data to envision the best course of action, but both information and analytical methods are commodities in today’s world. And the sheer number and complexity of available actions means that an analytically attainable, objectively superior answer is an illusion. That is not to say that rational thinking (including almost everything one learns in business school) is no longer important. But it is now table stakes, not competitive advantage.
What does create competitive advantage in this commoditized world? How do you distinguish yourself from your competitors in today’s business world? How do you create something that is differentiated in this crowded, noisy marketplace—that is unique and special in some meaningful way? Simply put, how do you create excellence?
More specifically, how do you envision something that is likely to win when the approach dictated by the OBP won’t work?
The answer lies not in understanding the world better, but in understanding ourselves better. When rationality no longer distinguishes you, the only thing left is you: you must distinguish you. You are your competitive advantage. Your purpose and talent are the key to better envisioning.
Purpose is the intersection of compulsive behavior and intuitive meaning. It is work that you both feel compelled to do well and that helps you make sense of your world and your place in it. Talent is your capabilities that improve with practice. Extraordinary talent is the ability to become distinctly better than your peers given the same amount of practice. While both of these definitions are open to debate, we find that they are consistently useful in creating clarity for people who are attempting to create their own competitive advantage and lead organizations that consistently win.
Anyone who has put the time and effort into becoming truly excellent at something knows that it can be physically, emotionally, and cognitively exhausting. Therefore excellence often arises from compulsion, which provides the energy to outlast the hardships that inevitably come along, and the resourcefulness to solve the problems that inevitably arise. People act compulsively for many reasons. But compulsion is most generative and valuable when it comes from a sense of meaning; purposeful work that helps you make sense of the world and your place in it. Not all compulsion is purposeful. But all sustained purpose is compulsive.
Similarly, excellence is most likely to be attained in things that you improve at the fastest for every unit of time and effort you put in. That is what is meant by being “talented” at something. Nobody is born a concert pianist. But some people get better at playing the piano faster with practice than others. You don’t need to be especially talented in the work you find meaningful. But excellence, sustained competitive advantage, requires talent.
It may be that some product or service is going to be the next big thing, and you recognize that earlier than others. The OBP tells you to exploit that market opportunity. But if that opportunity is not consistent with your purpose then you will be at a disadvantage in the market place. And if you have no talent for doing the things that are required for developing the opportunity, you’ll be behind as soon as you start. In a world where information and rational thinking are no longer differentiators, the winners will be the people who can persevere with zeal, solve problems with creativity, and learn and evolve quickly. The winners will be those whose purpose and talent align with the opportunity.
In our last article we introduced two people attempting to create business opportunities and solve business problems: an entrepreneur and a business executive. We showed how the OBP would guide their actions. Now let’s take those same two people and show how their actions would be different using the New Business Playbook. Both the entrepreneur and the business executive we reference below are based on actual people we have worked with closely. While some of the details have been changed to protect their anonymity, the essence of their stories is the same: they defied conventional wisdom and created incredible success by following their own sense of how to create value and solve problems. At every step of their business journey they were told they were crazy because they weren’t following the OBP. We tried to imagine what they would have done, and would have created, if they had listened to those doubters and followed the OBP. While we doubt they knew they were operating under a “New Business Playbook” (NBP), we believe that the NBP section accurately describes how they worked through their opportunities and challenges. Over the course of the coming articles we will follow the two journeys they could have taken.
Old Business Playbook => Choose opportunity based on market
New Business Playbook => Create opportunity based on purpose
OBP => Your friend tells you footwear is a great opportunity. You dive into the market data: who is buying footwear, what do they want, and where are gaps in what is currently provided you can exploit? You find a gap in the market: “Handles”, sandal-type shoes for people who enjoy performing handstands.
NBP => Your work with disabled veterans is deeply inspiring to you. You find yourself waking up in the middle of the night, wondering how you can help them. You have always had a talent for creating stylish but practical devices that increase freedom and mobility for people who have physical challenges. You envision a new type of wheelchair that will be infinitely customizable, beautiful, and yet strong.
OBP => You decide to survey all the current line managers and ask them questions about what they want from HR. They say they want interviews with better quality candidates.
NBP => You love your company but it is struggling. You know that one of the biggest problems facing it is the ability to find more great people. You have always had a talent for figuring out the essential element of a product or service and communicating it to people in a simple yet compelling way. You envision a great talent branding campaign, one that will effectively showcase your love of the company and help the right people self-select to join.
You can already see how following the “rational, analytical” guidance of the Old Business Playbook is going to end up creating two very different stories and two very different outcomes. As we add each component of the New Business Playbook we will watch this story unfold. Remember, these stories are based on real business cases of an extraordinary entrepreneur and an inventive business executive who we worked closely with over extended periods of time. We believe strongly that their success was due to their following their own internal sense of how to create value and solve problems, and their success can be directly linked to their deep understanding of their purpose and talents and their commitment to create and solve in a way that was consistent with how they saw the world.
The fact is that winning at business is rarely the likeliest outcome. People can evaluate their probability of success and determine that it won’t work out, and they’re almost certainly right. Yet there are some that look at stacked odds and feel compelled to pursue them anyway. Their specific reasons might be anything. Steve Jobs’ purpose was to create beautiful things that would “put a dent in the Universe.” Jeff Bezos’ purpose is to utterly dominate the internet retailing market. Elon Musk is passionate about a lot of things, but his overarching purpose is to upend the areas that “most affect the future of humanity.” And all these leaders envisioned opportunities that were aligned with their purpose and talents. In doing so they helped create the world we live in.
These are the people who are most likely to succeed despite the stacked odds. Not because they are more rational thinkers or because they analyzed the perfect market opportunity, but because they will persevere through hurdles and evolve quickly as they learn. In other words, because their purpose and talent are aligned with the opportunity they envision. We believe that same opportunity is available to everyone if they are willing to follow the NBP.
Envisioning has to start with you and your reality. When deciding to create something new, understanding what you are like and what drives you is far more important than understanding openings in the market. Connectivity increases complexity. Complexity can easily lead to confusion. Only when your pursuits are properly aligned with your purpose will cutting through the confusion be possible. If you centralize your envisioning process around something that is truly meaningful to you, you set yourself up to win. You will have increased resilience against the inevitable obstacles and failures. You will have clarity about what is important and be able to differentiate through excellence. In business, as in life, all acts of creation start with envisioning. The only thing that has changed is that now, it has to start with you.