Profit Magazine: The Biggest lie in Business
By Jim McElgunn || November 2008
The trap never fails. Jaynie Smith invites the roomful of CEOs at her workshop on competitive advantage to write the answer to this question: “What’s the No. 1 reason I should do business with you rather than your competitors?” Then she asks those who wrote “Good customer service” to stand up. Next are those who wrote “quality,” then “reputation,” then “knowledgeable staff.” By now, half the CEOs are on their feet.
When Smith gets to the tenth advantage on her list, virtually every CEO is standing. They’re starting to look sheepish as the point of the exercise dawns on them: how can you claim a competitive advantage that’s the same as everyone else’s?
Smith, president of Smart Advantage Inc., a Fort Lauderdale, Fla.-based consultancy specializing in identifying and communicating competitive advantage, has set her trap more than 200 times for CEO groups and companies across North America. The outcome never varies. Almost every CEO writes down what she pointedly calls “blah blah blah” — claims so lacking in specifics that prospects tune them out. Just seven of the 3,000 chief executives she has spoken to in leadership round tables over the past four years have been able to articulate a meaningful point of differentiation, reports Smith, author of Creating Competitive Advantage. “They answer with clichés,” she says. “But if you don’t give a compelling reason why someone should do business with you, the tiebreaker falls to price. And we don’t want that.” These CEOs aren’t necessarily wrong to think that their firms have good customer service or knowledgeable staff. What they fail to see is that such fuzzy claims do nothing to make them stand out from the pack.