Saturday, November 27, 2010

Why Great Teams Create Competitive Advantage

Every business has the ability to create real competitive advantage. All you need are great teams.

I am asked constantly what it takes to create competitive advantage, and not just from clients. Just about everyone I come into contact with is looking for the elusive answer. “How can I set myself apart from my competitors? How can I take business away from them?” The answer is easy: competitive advantage is created by people. Capable people put into strong teams. The internal behaviors of your organization are how companies set themselves apart from the competition. The attitudes, the level of commitment and motivation, and the resulting culture are what create competitive advantage.

I sometimes get blank stares when I give inquirers that answer. It’s not the answer people expect, and often not the answer they want. The “people” answer involves culture, and rah-rah, and touchy-feely, and that makes many managers and business owners uncomfortable. They would rather hear that the answer is buying into new technology, or re-arranging their office or store, or changing vendors. But consider that your competitors all have the same access to technology, the same access to vendors, and the same access to facilities as you do. The only difference-maker is your people, and the team culture, and how well that culture is able to innovate and think creatively. It’s how deeply the teams are committed to push the product envelope, the quality envelope, and the customer-service envelope. It’s how well your teams are positioned to connect with the customers and the markets you compete in.

Great teams create products and services that connect to customers at an emotional level. They create products and services that exceed the expectations of the customers. Great teams will take a customer transaction and turn it into a pleasing buying experience. A customer experience that is positive in every aspect is how the organization develops a relationship with the customer, a relationship based on credibility and trust. That relationship results in a loyal customer, one that recommends your products and services to friends and family. The organization then sees customer growth, revenue growth, and long-term success.

The notion that team cultures provide competitive advantage is not new by any means. Many organizations have created exceptional success this way, such as Johnson & Johnson, Toyota, Disney, Google, McDonalds, and General Electric. These companies have achieved success by creating teams that performed at levels far beyond what is typical. This is also how small companies outgrow their competitors and become world class market leading companies. Every large Fortune 500 organization started out a small business, and created great teams that were committed to the vision and focused on creating excellence.

Are your teams committed and focused?

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