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”Follow the Leader” instead of creative competition

”Follow the Leader” instead of creative competitionThe market- and human resource department is out of step with the development. All too many still is running in the same old ingrained ruts with ramparts on both sides of the road. Terms like cultural know-how and scenario analysis is often recognised in theory but it is rarely guiding the day-to-day business operations. This does not comply with the complex and dynamic global environment where traditional borders means much less than before.

Qualitative analysis of competitors’ market campaigns is too often discarded. Instead of making use of competitors market communication market departments use a harm-reduction-strategy. This is common both when a competitor launches innovations as well as price campaigns. Little harshly you can say that the one, who plays the first card in the traditional market game, wins. This is what McKinsey’s global study of how businesses react on competitors’ market campaigns says. From this conclusion market departments seem to a large extent still run in the old regulated industrial society’s deep ruts, which main characteristics were standardised products that were sold via mass-marketing campaigns.

Today, in the age of customer-adaption and brand management, the key to success is to use the organisations unique qualities and knowledge-base. After a competitor launches an innovative new product or a price-campaign the new management theory claim that the organisation immediately should implement several complex analyses. The focus should be on scenario-analysis which result should work for decision-support that ideally covers all possible moves of the competitor.

The aim is to be two steps a head of the competitor regardless which market strategy it uses and at the same time start off a counter-attack. However, as said above, the response should not use “the Following the Leader”-principle because of several reasons. For instance, you will always be left behind the competitor in case you just respond to a price-reduction or develop similar products. Younger business-sectors like telecom and high-tech does differ from the others. The response is faster and the strategy is more targeted at reducing the competitors sales in favour of the own sales with a new different campaign.

Deficits in the competitor strategy also characterise human resource departments. In a study from Futureorg with 250 German-Turkish people with university-degree showed that 38% planned to move “back” to Turkey. Most of the respondents were born in Germany which means “moving back” is not the right terminology even in theory. The reason for the high percentage is that the German-Turkish population despite the fact that they often have higher formal qualifications does not get jobs they apply for. This phenomenon is significant all over EU15 despite globalisation and the knowledge society’s progress. The human resource departments seem to have got lost in the industrial society’s limited and “xenophobic” environment. In the age of globalisation the backlash is waiting around the corner since language-skills and cultural know-how is invaluable on a market.

Anglo-Saxon countries are generally better to take care of the competence of immigrants withSilicon Valleyas the most well-known example. Here non-US-citizens stay after graduation at e.g. Stanford, whileGermany,Swedenand most of the other countries in EU15 foreign students move after graduation. This leads to an accelerating brain drain in countries which greatest assets on the global market is high level of education and know-how. An asset that is drained when the intercultural dimension is moving away and it is followed by innovation. Since as we know from research on creativity, the most creative environments are the once with the most different impressions. People from different backgrounds serve as the perfect foundation to build such an environment.

The business organisations, with the studies mentioned above in mind, to a large extent seem to have got lost in the analytic methods of the industrial society’s last gasps of breath. Scenario-analysis lacking, the competitor strategy seem to result in a “Following the Leader”-game, a harm-reduction strategy to reduce the effects of the competitor’s campaigns. In the same spirit human resource departments seem to think that cultural know how means trouble despite the fact that it really is the answer to their prayers to strengthen their organisation’s competition-power.

Written by
LarsGöran Boström©

 

Sources:

How companies respond to competitors: A McKinsey Global Survey (April 2008)

Turkish-German Professionals: Young, Qualified and Unwanted by Michael Sontheimer SpiegelOnline (21 maj, 2008)

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