Competition spurs innovation, right? When you think of competition, what is the first thing that comes to mind?
I’m betting it’s not a novel service delivery model, nor is it unconventional hiring practices, or a radical job training approach. Competition = price in nearly all instances. If a competitor competes with you and gets the business, the natural instinct is to question your pricing.
If only we could reduce our costs. The good news is that you can reduce your prices. It’s easy really. Here are some ideas: (You can pay me with the money you saved, later, if you’re still in business.)
- Hire less well paid employees
- Provide less services
- Hire cheaper subcontractors
- Reduce supervision
Each of these has it’s negative consequences. If they are not disastrous in their initial application, they will be in the long run.
Or there is the option of consciously reducing your fees while tasking those responsible for delivering the service to increase the profit. There are many ways of doing this also. If you haven’t thought about these, here are a few commonly applied techniques: (As before, you can pay me for these ideas later, if you’re still around.)
- Track and charge for every change in service
- Track and claim for anything looking like a delay
- Overcharge for additional services while under contract
- Charge for items not required, nor provided, but which sound plausible
- Negotiate, force, subtrades to include work not bid on
- Charge trades for services provided, even those paid for by the Client
- Obtain work access fees from Subtrades
How many of these wonderful methods lead to long term relationship building, development of trust or value added?
Sure we can blame the system for forcing us to resort to such means and methods. It’s the Client’s fault for forcing us to compete on a non-level paying field. It’s costs what it costs to deliver the level of service expected. If they won’t pay upfront, we’ll get it later, thank you very much.
All of the things mentioned so far can be categorized as innovation. I would call them negative innovation. These techniques reduce the pie. The ball is not moved forward, and things are not being done in a better way. It’s just a scratching the surface way of responding to the pressures of competition.
Innovation can be defined as doing the same thing in a different way. Innovation is hard. We’ve all heard it before. But true innovation, the kind that betters the way things were always done, is what competition is meant to drive. And competition, aka market pressures,will force each and everyone of to do so in varying degrees.
The only way to beat the competition is to make them irrelevant. One way to distance yourself from the others and competition is provide greater value to the Client. Here are some examples: (You can pay me if they work for you, and they will.)
- Design the delivery of your services in a way that others have not thought about, and are not likely to think about. At least not for a while.
- Adopt an unassailable code of conduct, and rigorously enforce it.
- Hire for attitude, adaptability and creativity.
- Constantly evaluate everything, inform and adjust as required.
- Operate in an open and transparent fashion.
- Continually think of ways of adding value and disseminate within the company.
- Act differently in all your encounters.
While these ideas sound easy, they are tough to implement. But they are complimentary and additive. Meaning each one builds on the other and enforces the whole.
The other way is to form an oligarchy or monopoly. There may be techniques for this strategy, but are infinitely harder to pull off.
