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To be successful at nailing and scaling your business you need repeatable business model. To develop a repeatable model, you need to differentiate; which is easier said than done.

Differentiation is the key to a great strategy, and assures you of your competitive advantage. When differentiating from your competitors look for ways to service your customers better and more profitably.

The clearer your differentiation, the greater your advantage.

A Harvard Business Review study showed, of the companies that sustained a high level of performance over many years, more than 80% of them had a well defined and easily understood differentiation at the core of their strategy.

For example:

  • Nike’s differentiation resides in the power of its brand, the company’s relationships with top athletes, and its signature performance-focused product design.
  • Singapore Air’s differentiation comes from its unique ways of providing premium service at a reasonable cost on long-haul business flights.
  • Apple’s differentiation consists of deep capabilities in writing easy-to-use software, the integrated iTunes system, and simplicity of design and product line (Apple has only about 60 main SKUs).

Every industry has leaders and laggards, and the leaders are typically the most highly differentiated.

But differentiation can wain with age. For the following reasons:

  • Your competitors will try hard to undermine or replicate it
  • The growth generated by successful differentiation brings with it complexity – complex companies tend to forget what they’re good at
  • Products multiply and dilute the differentiation
  • Acquisitions may take you away from your core
  • Front line employees can become more and more distant from the CEO’s office, lose their sense of the company’s strategic priorities – and behave in a way that it at odds with the core strategy and differentiation
  • A lack of consistency kills economies of scale and impedes the company’s ability to learn

So “reinvention” and “disruption” have become leading buzzwords; companies struggling with complexity and fading differentiation come to believe they must reimagine their entire business models quickly and dramatically or else be overwhelmed by upstarts with disruptive innovations.

Following 15 years of research into high performance, HBR conclude that most really successful companies do not reinvent themselves through periodic “binge and purge” strategies. Instead they relentlessly build on their fundamental differentiation, going from strength to strength.

  • They deliver their differentiation to all of their teams and create an organisation that lives and breathes its strategic advantages day in and day out
  • They sustain their differentiation over time through constant adaptation to changes in the market
  • They learn to resist becoming an ideas magpie better than their less-focused competitors

The result is a simple, repeatable business model that a company can apply to new products and markets over and over again to generate sustained growth. The simplicity means that everyone in the company is on the same page—and no one forgets the differentiation that sits behind their successes.

The power of a repeatable model lies in the way it turns the sources of differentiation into routines, behaviours, and activity systems – the life blood that flows through every area of your business and touch points of your customers.

How does your model look?

 

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