Ignore Competitors When Setting Strategy
Howard Schultz, the ever present leader of the Starbucks Coffee Company, has a thing or two to say about setting strategy.
Starbucks strategy has evolved successfully while tackling a host of new competitors over four decades. Schultz believes much of the success Starbucks has achieved is due to how the company ignores the competition when crafting and revising their strategy. He teaches a lesson every leader can benefit from.
In Schultz’s view, understanding the competitive landscape is essential work for every leader and enterprise. In particular, he believes leaders must be aware and mindful of what competitors are introducing to the marketplace. Doing the homework to appreciate how the competition appeals to customers gives leaders the insight they need to chart their own course.
But when it comes to actually setting the strategy going forward, Schultz insists the competition should not have undue influence over the discussion. In his view, competitors should never be in the room when setting strategy.
The idea that has served Schultz and other leaders so well is the necessity for companies to control their own destiny. Sound strategy always lays out clearly how an enterprise will disrupt the marketplace by creating a differentiated set of services, features, benefits, or products.
Paying attention to what competitors are doing while engaged in this thinking is counterproductive. Competitor insight at the strategy table encourages leaders to second-guess how to go forward in their own way. For leaders to set down the best strategy, they must deliberately decide who they want to be without regard to what the competition thinks.
The job of strategy is to build the future. Everything else, including what competitors are doing, is a distraction. In the words of Schultz, “Great companies that build an enduring brand have an emotional relationship with customers that has no barrier.” The competition has nothing to do with that.