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Why “We Want to Be Like ‘X’ or ‘Y’ Company” Isn’t a Strategy

It’s easy to idolize successful companies and think, “If we do what they do, we’ll succeed too.” But mimicry is not the key to innovation and growth.

It’s also lazy.

Let’s dive into why copying others can actually hinder your progress, whether you’re a startup founder or a Fortune 500 CEO.


The Imitation Trap: A Case Study

Consider a mid-sized tech firm, Company A. They decided to mimic a major competitor’s products and marketing strategies. Initially promising, this strategy soon backfired:

  • Customer acquisition costs rose by 30%, straining budgets.
  • Customer retention dropped by 25%, increasing churn.
  • Employee satisfaction plummeted, with a costly turnover rate of 40%.

They lost their unique value and customer loyalty by chasing another company’s success.

The Problem with Imitation

1. Mediocrity Magnet

Copying often leads to mediocrity, keeping you reactive instead of innovative and proactive.

Be at the cause. Get my drift?

  • For startups: Pitch meetings become harder, making it challenging to secure funding.
  • For established companies: Justifying premium pricing and maintaining market share becomes difficult.

The more you look like someone else, the harder it is for your customer or user to discern between the choices. You’re on your path to becoming an undifferentiated commodity.

2. Loss of Identity

Trying to be someone else dilutes your unique strengths and culture.

  • For startups: You risk losing the passion and vision that founded the company.
  • For established companies: Long-time customers may feel alienated, affecting brand loyalty.
3. Missed Opportunities

Focusing on imitation blinds you to new market opportunities and customer needs.

  • For startups: You might miss out on creating a new market category.
  • For established companies: Potential areas for expansion or diversification could be overlooked.

Focus on Customers, Not Competition

When we obsess over competitors, we neglect our most important asset: our customers. Let’s look at two companies that prioritized customer experience over competition:

Apple

  • Strategy: User-friendly design and ecosystem integration.
  • Result: 1.8 billion active devices globally.
  • Takeaway: Prioritize user experience, whether you’re a startup or a large corporation launching new products.

Netflix

  • Strategy: Streaming and personalized content recommendations.
  • Result: 231 million paid memberships.
  • Takeaway: Use data to understand your customers’ preferences and tailor offerings accordingly.

How to Compete Differently

Instead of saying, “We want to be like ‘X’ or ‘Y’ company,” focus on giving competitors a run for their money:

1. Highlight Your Strengths
  • Conduct a SWOT analysis: Involve team members from all levels for diverse insights.
  • Identify unique capabilities: Whether it’s proprietary technology or a skilled team, leverage your strengths or turn weaknesses into them.
  • Develop tailored strategies: Prioritize technical innovation if you have a strong engineering team, or partnership-driven growth if you have industry relationships.
2. Listen to Your Customers
  • Implement feedback loops: Use tools like NPS surveys and customer interviews.
  • Analyze customer behavior: Invest in tools that track user engagement and churn.
  • Create customer advisory boards: Get direct input on product roadmaps and strategic decisions.
3. Keep Innovating
  • Allocate resources for R&D: Aim for 3-5% of revenue, even as a startup.
  • Encourage cross-functional collaboration: Host hackathons or innovation workshops.
  • Implement an idea management system: Use platforms like Aha! or IdeaScale for employee suggestions.
4. Balance Data with Intution
  • Create space for visionary thinking: Schedule regular “blue sky” brainstorming sessions
  • Trust your expertise: Recognize that intuition often stems from deep industry knowledge
  • Test intuitive ideas rapidly: Use lean methodologies to prototype and validate hunches quickly

Balancing Data with Intuition: The Power of Visionary Thinking

While data is invaluable, it’s crucial to remember that it represents the past. True innovation often comes from intuition, vision, and a deep understanding of human needs that may not yet be articulated. As Steve Jobs famously said, “People don’t know what they want until you show it to them.”

The Limitations of Data-Only Decisions
  • Data can’t predict paradigm shifts or disruptive innovations
  • Overreliance on data can lead to incremental improvements rather than breakthrough ideas
  • Historical data may not apply in rapidly changing markets or unprecedented situations
The Role of Intuition in Business Success
  1. Spotting Emerging Trends
    • Trust your instincts when you notice patterns or shifts in customer behavior
    • Example: Netflix’s decision to invest heavily in original content was based on intuition about the future of streaming, not just existing data
  2. Making Bold Moves
    • Sometimes, the riskiest move is not taking a risk at all
    • For startups: Your gut feeling might lead you to pivot your business model before data suggests it’s necessary
    • For established companies: Intuition might guide you to enter a new market or discontinue a profitable but outdated product line
  3. Connecting Disparate Ideas
    • Innovation often comes from combining concepts in unexpected ways
    • Encourage “what if” thinking sessions that go beyond current market data
Striking the Right Balance
  1. Use Data to Inform, Not Dictate
    • Let data provide context and background, but don’t let it constrain your thinking
    • Example: Amazon’s decision to launch AWS was based on intuition about the potential of cloud computing, supported by their internal infrastructure needs
  2. Create Space for Visionary Thinking
    • Allocate time for “blue sky” brainstorming sessions free from data constraints
    • Encourage team members to share hunches and gut feelings alongside data-driven insights
  3. Test Intuitive Ideas Rapidly
    • Use lean startup methodologies to quickly prototype and test intuitive concepts
    • For larger companies: Create “skunkworks” teams that can operate outside normal data-driven processes
  4. Develop and Trust Your Expertise
    • Intuition is often the result of deep experience and knowledge
    • Invest in continuous learning and diverse experiences to sharpen your intuitive skills
Case Study: Apple’s iPhone

When Apple introduced the iPhone in 2007, market data suggested that smartphones with keyboards were the future. However, Steve Jobs and his team trusted their intuition about the potential of touchscreen technology and user-friendly interfaces. This intuitive leap, combined with technical expertise, led to a product that redefined the entire mobile industry.

Building Your Own Strategy

1. Define Your Vision
  • Create an inspiring vision statement: Make it ambitious yet achievable, like becoming the most trusted financial partner for small businesses by 2030.
  • Align departments: Ensure every team’s objectives tie back to this vision.
2. Set Unique Goals
  • Use the OKR framework: Set key objectives with measurable results.
  • Focus on your strengths and market position: Prioritize rapid user acquisition for startups or market expansion for established companies.
3. Create Value for Customers
  • Develop a unique value proposition: Clearly state why customers should choose you.
  • Solve specific customer pain points: Identify top challenges and build solutions.
  • Continuously improve based on feedback: Test and iterate on new features.
4. Incorporate Intuitive Thinking
  • For Startups: Encourage founders to articulate and defend their vision, even if early data is inconclusive
  • For Established Companies: Implement “intuition workshops” where executives practice making decisions with limited data
  • Reward innovative thinking: Recognize and reward team members who successfully champion intuitive projects, not just those who meet data-driven KPIs

Benefits of Customer-Centric Focus

BenefitStatisticsApplication
Customer LoyaltyLoyal customers are 5x more likely to repurchase and 4x more likely to referImplement referral programs and upselling strategies
Long-Term SuccessCompanies with superior customer experience bring in 5.7 times more revenueInvest in customer success teams
Standing Out86% of buyers will pay more for better customer experienceJustify premium pricing through exceptional service

Potential Challenges and Solutions

1. Resistance to Change
  • Solution: Implement change management strategies.
  • Startups: One-on-one discussions with team members.
  • Large companies: Create a task force with representatives from each department.
2. Short-Term Thinking
  • Solution: Align incentives with long-term goals.
  • Startups: Tie equity vesting to long-term milestones.
  • Large companies: Implement long-term incentive plans for executives.
3. Resource Constraints
  • Solution: Prioritize high-impact initiatives.
  • Startups: Focus on a key differentiator before expanding.
  • Large companies: Create an internal venture fund for innovative projects.
4. Overreliance on Data
  • Solution: Create a culture that values both data-driven decisions and intuitive leaps
  • For startups: Encourage founders to trust their vision while validating assumptions quickly
  • For large companies: Establish innovation labs or incubators where ideas can be explored without immediate data validation

Conclusion

While imitating successful companies might seem like a shortcut, true business success comes from understanding your customers, leveraging your unique strengths, and continually innovating. By focusing on what makes you different, delivering exceptional value, and balancing data with intuition, you don’t just compete – you make the competition irrelevant. This applies whether you’re a two-person startup working out of a garage or a multinational corporation with thousands of employees.

Call to Action

  1. Conduct a strategy audit: Are you focusing more on competitors or customers? Analyze the motivation behind your last five major decisions.
  2. Survey your customers: What do they value most about your products? Aim for at least 100 responses for startups, 1000+ for larger companies.
  3. Hold a brainstorming session: Involve team members from different departments to solve customer problems in unique ways.
  4. Develop an action plan: Outline steps to shift towards a more customer-centric, innovative strategy, including timelines and success metrics.
  5. Practice intuitive thinking: Set aside time each week to contemplate your industry’s future without relying on current data. Journal your ideas and revisit them regularly to refine your intuitive skills.

Remember, your unique journey is your greatest asset. Embrace it, trust your instincts, and let them guide you to true differentiation and success, whether you’re preparing for a seed round pitch or presenting to the board of a Fortune 500 company.

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Stop Listening to Your Clients: The Case for Gut Instincts in Business

We’ve all been told that the customer is always right and client feedback is the holy grail of business success. But what if we’ve been getting it wrong? What if, sometimes, the best way to innovate and drive your business forward is to stop listening to your clients and start trusting your gut instincts?

The Limitations of Client Feedback

While client surveys can offer valuable insights, they have limitations. Customers often don’t know what they want until they see it. Henry Ford famously said, “If I had asked people what they wanted, they would have said faster horses.” This highlights a crucial point: customer feedback is often rooted in current experiences and limitations, not future possibilities.

As behavioural economists like Daniel Kahneman and Amos Tversky have shown, people often don’t act rationally or predictably. Surveys can help you understand these nuances in your customers’ decision-making processes, but relying solely on this feedback can limit your innovation.

The Power of Gut Instincts

Gut instincts are driven by intuition and a deep-seated understanding of your industry, market, and product. Successful entrepreneurs like Steve Jobs and Elon Musk have shown that relying on intuition can lead to groundbreaking innovations. Jobs didn’t rely on focus groups to design the iPhone; he trusted his vision of a user-friendly, revolutionary device.

Case Study: Apple’s Intuition-Driven Innovation

When Apple was developing the first iPod, traditional market research and customer feedback didn’t play a major role. Instead, Steve Jobs and his team trusted their instincts about what would revolutionize the music industry. Their intuition proved correct, and the iPod became a massive success, transforming how we consume music.

Why Client Feedback Can Be Misleading

Clients often provide feedback based on their current experiences and frustrations, which can lead to incremental improvements but rarely results in disruptive innovation. For instance, customers might ask for a slightly better version of an existing product, not realizing the potential for a completely new approach.

According to Michael Porter, understanding competitive forces and customer needs is vital. However, balancing this with visionary thinking allows businesses to break free from the constraints of current market expectations.

Balancing Intuition and Data

While it’s important not to disregard client feedback entirely, balancing it with gut instincts and visionary thinking is crucial. Use client surveys to identify immediate pain points and preferences, but don’t let them stifle your creativity and long-term vision.

Implementing a Gut-Driven Strategy

  1. Cultivate Deep Industry Knowledge: The more you understand your industry, the more reliable your gut instincts will be. Dive deep into market trends, technological advancements, and competitor strategies.
  2. Embrace Risk and Uncertainty: Trusting your gut often means taking risks and venturing into the unknown. Embrace this uncertainty as a necessary component of innovation.
  3. Foster a Visionary Culture: Encourage your team to think beyond current client demands and envision the future of your industry. This mindset can lead to breakthrough ideas and products.
  4. Test Bold Ideas: Don’t be afraid to prototype and test radical ideas. Use feedback as a secondary measure to refine these innovations, not as the primary driver of your strategy.

Success Stories

Many successful companies have thrived by balancing intuition with customer feedback. Netflix, for example, took a risk by moving from DVD rentals to streaming based on a visionary understanding of where the market was heading, despite customer feedback indicating satisfaction with the status quo.

The Takeaway? Trust Yourself

In conclusion, while client surveys and feedback are valuable tools, they should not be the sole drivers of your business strategy. Trust your gut instincts, embrace your vision, and don’t fear taking bold risks. You can achieve truly transformative results by balancing client feedback with intuitive decision-making.

Simon Sinek and John Kotter emphasize the importance of leading with a clear vision and adapting to change. Leveraging client survey data can inform your strategic direction and ensure your team is aligned and responsive to customer needs.

P.S. If you’re curious about balancing client feedback with gut instincts, plenty of resources are available. Let me know in the comments if you’d like some recommendations!

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The Big Short Explains Why Smart People Act Stupid in Business

Last night, I rewatched “The Big Short (TBS),” a film that brilliantly dissects the 2008 financial crisis. As I watched, it struck me how this movie perfectly illustrates why even the smartest people in large organizations can make disastrously poor decisions. Let’s take a look at the systemic, cultural, and psychological factors at play.


1. Cognitive Biases and Conformity

In TBS, we see highly intelligent individuals like investment bankers and financial analysts succumbing to cognitive biases. Richard Thaler and Daniel Kahneman, who both appear briefly in the film, have extensively studied these biases.

Overconfidence, anchoring, and groupthink clouded the judgment of the financial experts. The film’s protagonists, who spotted the housing bubble, faced ridicule and disbelief—classic symptoms of groupthink and conformity.

Remember how Michael Burry, played by Christian Bale, identified the housing market’s fragility? Despite his accurate analysis, he faced enormous pushback because his conclusions deviated from the group consensus.

Takeaway: Encourage open dialogue and dissenting opinions during meetings. Consider anonymous feedback tools to gather honest input.


2. Bureaucracy and Siloed Thinking

TBS also highlights how bureaucratic structures and siloed departments can stifle innovation and slow down decision-making. Roger L. Martin’s concept of integrative thinking is crucial here. In the film, various departments within financial institutions operated in isolation, failing to see the interconnected risks.

When Mark Baum’s team, portrayed by Steve Carell, tried to expose the flaws in mortgage-backed securities, they encountered resistance from different sectors of the financial system, each operating in its bubble.

Takeaway: Facilitate cross-departmental collaboration through regular interdepartmental meetings and collaborative projects.


3. Short-term Focus and Incentive Misalignment

Corporate environments often prioritize short-term gains over long-term stability, a theme painfully evident in TBS. The financial crisis was exacerbated by incentive structures that rewarded immediate profits, regardless of long-term consequences. Naseem Taleb’s idea of antifragility suggests that systems should be built to withstand and benefit from shocks and stresses, not crumble under them.

Wall Street’s obsession with short-term profits led to reckless behavior, like selling risky mortgages bundled into seemingly safe securities. This short-term focus compromised future stability and led to catastrophic losses.

Takeaway: Align incentive structures with long-term goals and innovation. Reward risk-taking and learning from failures.


4. Resistance to Change and Hierarchical Culture

John P. Kotter’s principles of change management are vividly illustrated in the film. The entrenched, hierarchical culture of the financial sector resisted any suggestion that the housing market was in trouble. Those who tried to raise alarms were often dismissed or silenced.

Jared Vennett, played by Ryan Gosling, faced skepticism and resistance when he tried to pitch the idea of shorting the housing market. The hierarchical structure of the banks made it difficult for radical ideas to be heard and acted upon.

Takeaway: Create a safe environment for employees to voice concerns. Implement regular feedback sessions and anonymous suggestion boxes.


5. The Power of Narrative and Storytelling

Malcolm Gladwell and David Ogilvy emphasize storytelling’s power in changing culture and aligning incentives. TBS itself is a masterclass in storytelling, using humor and accessible explanations to convey complex financial concepts. This approach can be a powerful tool within organizations.

We’re talking about it now in this post, right?

The film’s use of celebrity cameos to explain financial jargon in layman’s terms made the story engaging and memorable, helping audiences understand the gravity of the situation.

Takeaway: Use storytelling to highlight successes and lessons learned. Share these stories in company newsletters and meetings.


6. Aligning Organizational Goals with Personal Fulfillment

Naval Ravikant’s ideas about aligning organizational goals with personal fulfillment are relevant here. When individuals see their work as meaningful and aligned with broader goals, they are more engaged and motivated. The protagonists in TBS were driven not just by profit but by a desire to expose the truth and prevent a catastrophe.

The team at Cornwall Capital, led by Charlie Geller and Jamie Shipley, pursued their shorting strategy because they believed in its correctness, despite facing ridicule and isolation.

Takeaway: Encourage employees to pursue passion projects that align with organizational goals. Offer professional development opportunities that support their growth.


7. Navigating Corporate Politics

Robert Greene’s insights on power dynamics and strategy are crucial for understanding internal machinations. The film portrays the complex political landscape within financial institutions, where navigating alliances and power plays was essential for getting things done.

Ben Rickert, played by Brad Pitt, used his connections and understanding of corporate politics to help Charlie and Jamie execute their trades successfully, despite the industry’s opposition.

Takeaway: Train employees in strategic networking and influence techniques. Encourage cross-departmental alliances and collaboration.


Here’s a holistic approach to address poor decision-making in large organizations:

  • Bias Awareness Training: Regularly train employees on cognitive biases and decision-making traps.
  • Change Coalition: Form a guiding coalition of influential leaders to drive cultural change and effectively communicate the vision.
  • Integrative Thinking Sessions: Organize cross-functional brainstorming sessions to foster innovative problem-solving.
  • Compelling Narratives: Use storytelling to highlight successful decision-making examples and inspire cultural shifts.
  • Flexible Frameworks: Develop adaptable decision-making frameworks that encourage experimentation and learning.
  • Personal Growth Programs: Implement programs supporting employee autonomy, mastery, and purpose.
  • Strategic Networking: Train employees in strategic networking and influence techniques to navigate corporate politics effectively.

By addressing these systemic issues, through a comprehensive approach that addresses cognitive biases, bureaucratic structures, incentive misalignment, and more, organizations can foster a culture of smarter decision-making.


Here are some book recommendations that provide a comprehensive understanding of the systemic, cultural, and psychological factors that influence decision-making in large organizations, offering practical insights and strategies to improve organizational effectiveness.

Cognitive Biases and Decision-Making

1. “Thinking, Fast and Slow” by Daniel Kahneman

– Explores the two systems of thought and how cognitive biases influence decision-making.

2. “Nudge: Improving Decisions About Health, Wealth, and Happiness” by Richard Thaler and Cass Sunstein

– Discusses how small changes in choice architecture can significantly impact behavior.

Bureaucracy and Integrative Thinking

3. “The Opposable Mind: Winning Through Integrative Thinking” by Roger L. Martin

– Introduces the concept of integrative thinking and how leaders can synthesize opposing ideas.

4. “Reinventing Organizations: A Guide to Creating Organizations Inspired by the Next Stage in Human Consciousness” by Frédéric Laloux

– Explores new organizational models that break away from traditional bureaucratic structures.

Short-term Focus and Incentive Alignment

5. “Antifragile: Things That Gain from Disorder” by Nassim Nicholas Taleb

– Explains how systems can benefit from volatility, uncertainty, and stress.

6. “The Innovator’s Dilemma: When New Technologies Cause Great Firms to Fail” by Clayton M. Christensen

– Examines why large companies fail to innovate and how to overcome these challenges.

Change Management and Hierarchical Culture

7. “Leading Change” by John P. Kotter

– Provides a comprehensive framework for leading successful organizational change.

8. “Drive: The Surprising Truth About What Motivates Us” by Daniel H. Pink

– Explores the elements of true motivation and how they apply in the workplace.

Power of Narrative and Storytelling

9. “The Tipping Point: How Little Things Can Make a Big Difference” by Malcolm Gladwell

– Discusses how small changes can create tipping points that lead to significant impacts.

10. “Confessions of an Advertising Man” by David Ogilvy

– Shares insights and stories from one of the most influential advertising men, emphasizing the power of storytelling.

Aligning Organizational Goals with Personal Fulfillment

11. “The Almanack of Naval Ravikant: A Guide to Wealth and Happiness” by Eric Jorgenson

– Compiles the wisdom of Naval Ravikant on pursuing personal fulfillment and aligning it with professional goals.

12. “Flow: The Psychology of Optimal Experience” by Mihaly Csikszentmihalyi

– Explores the concept of flow and how it leads to happiness and fulfillment in both personal and professional life.

Navigating Corporate Politics

13. “The 48 Laws of Power” by Robert Greene

– Offers insights into power dynamics and strategies for navigating corporate politics.

14. “Influence: The Psychology of Persuasion” by Robert B. Cialdini

– Discusses the principles of persuasion and how they can be applied effectively in business.


IQ, meet EQ.

Ultimately, “The Big Short” serves as a stark reminder that intelligence alone isn’t enough to prevent disastrous decisions. It’s about fostering a culture that values critical thinking, collaboration, and resilience. Only then can we avoid the pitfalls that even the brightest minds fall into.