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5 Tips for any Business to Stay Competitive

Alcoa has just announced that it will be closing it’s Point Henry smelter and two rolling mills by the end of this year, with 980 jobs to go as a result.

Last week, Toyota announced the looming closure of their car manufacturing operations in Australia, in the wake of similar announcements by legendary Australian car manufacturers Holden and Ford. This spells the end of car manufacturing in Australia by the end of 2017, with huge flow-on effects to manufacturers/suppliers who supply components to the car makers.

Since the start of the Global Financial Crisis, Australia has lost about 150,000 manufacturing jobs or, as quoted by Sophie Mirabella on Q&A in 2013, “one manufacturing job every 19 minutes“. The Government has pumped hundred of millions of dollars into the automotive, clothing and textile industries, and yet manufacturing now accounts for 9% of GDP – in the 1960’s it peaked at 27% of GDP.

And of course these challenges don’t just apply to manufacturing. Australia has a high dollar, relatively small economy, low levels of capital investment, and restrictive tax legislation, all of which are factors that contribute to a challenging environment for most businesses.

So what do you need to do, as a business owner, to thrive and continue to be competitive in the reality of the 21st century global economy? Here are 5 tips that could make all the difference:

Innovation

  1. Differentiation – What competitive advantage can you establish based on your knowledge, innovation, and intellectual property that nobody else has or can easily imitate? If you’re doing what everybody else is doing, a company in Asia will inevitably do it cheaper than you. In fact, you’ll probably be tempted to outsource to them very soon (not just for manufacturing but also for customer service, virtual assistants, web development, IT support, or any of a number of functions you always assumed you had a monopoly on).

    Innovation is the greatest form of competitive advantage in the 21st century.

    You cannot afford to rest on your laurels and just keep doing what’s always worked for you. It is critical that you nurture a culture and a program of innovation.
    Keep learning, questioning, creating, innovating.

  2. Focus – As with competitive advantage and differentiation, the reality is that being a jack of all trades is unlikely to make you a master of any. To be an expert in your field (and you’ll need to be if you want a competitive advantage!) years of experience and practice are required. Very rarely can this be achieved if you’re too diversified and all over the shop. Steve Jobs turned Apple around by slashing the number of projects and products they were working on, believing “deciding what not to do is as important as deciding what to do.” This principle is also echoed in the fantastic book ‘Eat That Frog’ by Brian Tracy.
  3. Partnerships – At no point in human history have we been more connected than in the 21st century, and the old saying ‘No man is an island’ is more true now than it has ever been. While we’re quoting famous expressions, there is also ‘strength in numbers’. Working with other businesses can offer fantastic stimulation for idea creation, sharing of intellectual property, access to each other’s customer bases, and a whole range of other benefits. For example, if you’re maintaining your focus on your strengths (see Point 2 above!) maybe another company should be handling some of the peripheral tasks that are not part of your core strengths – IT, marketing, bookkeeping, accounting,…
  4. Surround yourself with GREAT people – if we truly believe our competitive advantage is the innovation, experience, and brilliance of our people, then surrounding yourself with a team of passionate, committed, loyal, experts should be one of our top priorities. If you can unleash the full capability of each team member, and they’re all bringing great skills and experience to the table, then you’ll have a huge competitive advantage.
    A few quick notes that directly tie into this:
    MOST teams are dysfunctional to a certain extent. Make it a priority to read ‘The 5 Dysfunctions of a Team’ by Patrick Lencioni (or listen to it on Audible) and get the most from your team.
    Staff are not commodities – you can’t simply ‘replace’ a great team member without a huge cost to the business. There are numerous ways to calculate the ‘cost’ of replacing staff, and estimates range from 20% of annual salary to 400% for some of your most highly experienced team members – but whatever the true figures, the reality is that creating a potent team of loyal, passionate ‘family’ who’d rather stay with you than go and work somewhere else for more money will definitely pay off for you.
  5. Measure. Measure. Measure – To be competitive, you need to know the facts. You need to change course when things are going off track. You need to challenge yourself to improve. And it’s not enough to rely exclusively on gut feel. Measure your marketing performance. Measure your financial performance. Measure your HR performance. Measure your efficiency and productivity. Use industry benchmarks to see how you’re going compared to others in the market. Use last years figures to see if you’re improving. Set targets and then track whether you’re achieving them. Understand your cash-flow so you can plan for the future and manage your growth effectively.

 

 

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