Traditionally, a competitive advantage is defined as a situation in which a business entity is able to offer a consumer greater value than competitors, either by means of lower cost (price advantage) or by providing greater benefits and/or service (differentiation advantage). A competitive advantage identifies the manner in which a business entity differentiates itself within the market in which it competes. The concept is usually applied to businesses and professionals, but it can also be applied to individual employees within an organization (see "Your Personal Competitive Advantage" below).

A business that adopts a price advantage strategy focuses on minimizing costs so as to be able to achieve a selling price at least equal to the average for the market. This strategy is usually associated with large-scale businesses offering "standard" products with relatively little differentiation that are perfectly acceptable to the majority of customers. Occasionally, a low-cost leader will also discount its product or service to maximize sales, particularly if it has a significant cost advantage over the competition and, in doing so, it can further increase its market share.

Differentiation oriented organizations adopt a premium price for their products and services, often to reflect the higher production costs and extra value-added features provided for the consumer. Differentiation strategies focus on charging a price that more than covers the additional production costs and on giving customers clear reasons to prefer their product or services over other less differentiated and perhaps, lower cost competitive offerings.

Business managers and professional practitioners understand that to grow their enterprises, they must continually focus on defining, developing and promoting their competitive advantages to current and future customers in order to maintain and grow their organizations. To accomplish this, firms must manage their resources and develop their capabilities in ways that make them superior to those of their competitors. Otherwise, competitors would simply copy what a business was doing and thereby minimize or eliminate whatever competitive advantage existed.

Resources

Resources describe the assets a business makes use of to create a price or differentiation advantage that competitors would find difficult to duplicate. Such resources would include intellectual capital such as patents, trademarks and copyrights; proprietary technology; brand equity; business reputation; human capital (employee expertise); and customer loyalty.

Capabilities

Capabilities describe a business's ability to use its resources in an effective manner. Capabilities are generally the result of a unique combination of organizational resources and are usually difficult for competitors to copy. Examples of operational capabilities would be the ability to minimize production defects and to provide faster and better service than competitors.

Together, resources and capabilities enable innovation, efficiency, quality and customer satisfaction, which can then be leveraged to create a lower cost structure or differentiated product or service which a business can use to develop a competitive strategy for positioning  itself within a marketplace.

Your Personal Competitive Advantage

In a previous edition of Insights, we discussed the importance of the attribute of self-awareness to personal success (see September 2011 Insights). By applying the concept of competitive advantage to our roles as employees, we can gain additional insights about ourselves that can be extremely valuable in regard to how we can best position ourselves for maximum success in our work. In this context, personal competitive advantages relates to how we differentiate ourselves with regard to our own personal knowledge, skills, experiences, attitudes, abilities and personality.

The notion of generating consumer value applies as much to an individual employee as it does to a business, except that in the case of an employee the consumer is the actual organization for a person works. As in a business, we as individuals also possess resources and capabilities that we can harness and direct to provide value to our employers, and which we can use to distinguish ourselves from others in regard to compensation, advancement as well as in selection and hiring.

The one major difference in the employee analogy is that the positioning strategy with regard to competitors (i.e., other employees or potential hires) must focus entirely on a differentiation advantage rather than a on a price advantage since virtually no one ever seeks to be hired or promoted on the basis of accepting lower pay than another actual or potential employee. This means that to get hired or promoted, candidates must demonstrate that their resources (experience, skills, etc.) and capabilities (demonstrated by their results) provide sufficient superior value to an organization that it will, therefore, select them over other applicants for a certain position.

Take some time to reflect on your personal competitive advantage. Is it as strong as you would like it to be? If not, are you willing to take action to improve it? If so, what will be your development plan? (more on personal development)

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The importance of interpersonal effectiveness to a person's overall success and happiness in work and in life cannot be overstated. Clearly each of us is responsible for creating our own life vision (how we see our life unfolding) and determining our personal mission (how we will achieve our life vision).

However, except possibly for total hermits, none of us leads a purely solitary existence. Most of us are continually surrounded by other people with whom we are required to interact on a daily basis. We can accomplish little in the realm of personal fulfillment or professional success without the assistance and cooperation of other people, and our success in generating such assistance and cooperation depends principally on our ability to positively influence other people's thoughts and actions. It logically follows then, that it is in our general best interest for us to make the most out of our personal interaction opportunities.

Interpersonal effectiveness has to do with a person's ability to interact positively with other people in professional, social and family environments. However, it can be interpreted to mean different things by different people. Some may view the concept of interpersonal effectiveness simply as a process of getting along with people or getting others to like and respect us. Others may see it primarily as an ability to motivate others to follow our wishes and directives in a diligent and productive manner. At its core however, the term usually conveys a meaning of motivating others to do what we want them to do, whether it be for our own personal benefit or for the accomplishment of organizational goals.

There are several approaches we can use to get others to cooperate with us. One way is to use incentives to get other people's help and support. This can work so long as we have the necessary rewards to offer and those with whom we are interacting are truly motivated by those rewards. Another way is to use fear by communicating some kind of negative consequence, either explicitly or implied. Both of the above approaches are often used by ineffective managers to motivate subordinate with usually less than optimum outcomes. The same can probably also be said for ineffective parents.

Neither of these approaches usually works very well because people respond to them only because they feel they have to in order to either experience some kind of gain or to avoid a loss. Furthermore, under such conditions, people usually do only the minimum required in a situation and nothing more. This really isn't interpersonal effectiveness at all, but rather more like using intimidation or manipulation to achieve results.

Getting Others to WANT to Help You

True interpersonal effectiveness involves more than simply having the power to coerce others to cooperate with us in accomplishing what we want to get done. It reflects a sense of being able to interact harmoniously with other people and to work with them in a positive, pleasant and mutually satisfying manner. It has to do with getting others to voluntarily and sincerely want to work with us in ways we may not have expressly focused on or perhaps, even have thought of.

Regardless of our type of work, social environment or personal relationship status, every day we interact with an assortment of different people who can have varying degrees of influence on our success and happiness. The potential impact of individuals such as a boss, mentor, teacher, influential friend or relative, subordinate or client is pretty obvious, but we don't often think much beyond this rather narrow scope. The truth is that most anyone we encounter during the course of our daily activities may have the potential to have a positive impact on us.

Connecting with Others

The term connect is used frequently today in networking to describe a process of being personally associated with another person no matter how trivial or superficial the association might be. In the context of interpersonal effectiveness, however, connecting means developing at least one (preferably several) unique meaningful, positive emotional link between yourself and another person that has the potential to increase your personal success and happiness. Unique means that each connection is like no other. This is not to say that a person cannot have very similar connections with different people, but every person is a unique being and, therefore, each connection is also unique.

According to author John C. Maxwell, "Only one thing stands between you and success. It isn't experience or talent. To be successful, you must learn how to really connect with people. And while it may seem like some folks are just born with it, the fact is anyone can learn how to make every communication an opportunity for a powerful connection."

The following are some ways to form personal connections that can help you improve your interpersonal effectiveness:

• Really get to know people
  Try to learn what those who are important to you feel and think. You may discover commonalities that may create a personal connection that would otherwise not exist. Additionally, showing interest in others helps to generate rapport which can form a powerful foundation for enhancing interpersonal effectiveness. Opt for face-to-face or telephone interactions over email whenever practical.



• Show that you care
  When you are trying to connect with people, remember that it's about them, not about you. Focus more on their needs and desires, not yours. Ask if there is anything you can do to help them and then be sure to follow through. Do nice things for others voluntarily. They will feel inclined to reciprocate.



• Respect everyone
  There are many ways to demonstrate respect. Listen attentively when speaking with others to show that their thoughts and opinions are important to you. This makes them feel valued. Never dismiss another's ideas as being silly. Don't discourage people. People will not always remember what you said or did, but they will always remember how you made them feel.



• Stay positive
  People like to associate and work with others who are upbeat and positive. They tend to avoid those that are negative. Certainly be realistic about situations, but try to avoid complaining or making derogatory comments. Look for opportunities to acknowledge and congratulate people. Avoid unnecessary criticism of others or situations. Your positive attitude will rub off on others and will increase their desire to work and cooperate with you.



• Be enthusiastic
  Being enthusiastic about life will instantly make people gravitate to you and want to connect with you. Practice smiling and acting enthusiastically around others and exhibit excitement about life. You don't have to come off phony, just be energized about what you do and the information you share with others.




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People often associate the topic of persuasion primarily with the concept of selling, but the importance of effective persuasion skills really pertains to every one of us regardless of our individual vocation. Every day each of us is involved to some degree in influencing the thoughts and actions of others. In fact, the path to success in life lies to a very large extent in gaining the cooperation of others. In this edition of Insights, we continue with our ongoing segment dedicated to the topic of persuasion.

 

Using "Verbal Judo" in Dealing with Objections

Judo is a sport and method of physical training developed in Japan in the late 19th century, which uses principles of balance and leverage to subdue and overcome an opponent. Judo techniques enable a weak and small person to overcome a larger and stronger one by effectively using an opponent's superior strength and power against him. The basic rule of Judo is never to oppose strength with strength for the stronger person will inevitably win. However, by putting an opponent of balance while maintaining his, a Judo practitioner can throw an opponent to the ground and remain standing, thereby gaining a competitive advantage.

Here are some ways in which Judo principles can be applied to the art of persuasion (verbal judo) to make you more successful in getting others to accept your ideas.

Bring it Up First

If you have prepared properly for a presentation either to a single person or to a group, you should have a pretty good idea of the main objections that others would be likely to raise to your idea or proposal. An effective approach to dealing with an objection is to use verbal judo and raise the objection first. This puts your listener off balance because your listener may have been focusing extensively on this concern and may have been waiting for just the right time to drop it on you.

By bringing it up first and handling it, you will have diminished the power of the objection (and the objector) and gained the upper hand. For example, you might say something like: "If I were in your position, I would be concerned about "X", and then explain why such an objection is unfounded. By bringing up an expected objection first, you demonstrate that you really know your stuff and, this helps you gain trust and credibility with your audience.

Often times a person will raise a bogus or smokescreen objection in an attempt to find a way not to have to make a decision in your favor. What he or she really wants to do is to get rid of you, do something else, or simply test you. The other person may be thinking "This worked the last time I tried it so I'll use it again." By anticipating the smokescreen objection and then bringing it up first and answering it effectively, you take the steam out of the anticipated objection and remove it from play in the discussion.

Any listeners who may have been contemplating raising the objection will likely lose interest in pursuing it because they can see that it won't have its intended impact. Raising the objection first also demonstrates your high self-confidence and conveys the idea that you have heard it all many times before and that you are a professional who should be taken seriously.

What If They Bring It Up First?

Clearly it isn't always possible to anticipate objections and raise the issue first to disarm it. When a listener raises an objection first, don't show any hesitation, displeasure or fear and don't push back by arguing the validity of the objection whether genuine or artificial. If you do, you will be perceived as being defensive, and this runs contrary to the principles of Judo. One of the first things that highly successful people say in such a situation is something like "I'm glad you brought that up," "That's music to my ears," "Thanks for asking that." Smile and appear glad the listener brought up the objection.

Such a response quickly diffuses the impact of the objection, because it communicates that you are prepared and confident in handling it and that you are actually looking forward to the opportunity to address it. Again, in Judo fashion, the objection and objector are not confronted directly, but rather, put off balance so that they can be more easily subdued and overcome. The result will be that the questioner will likely not raise the objection because it will become evident that it won't have the significance or impact that he or she believed it would have. Of course it goes without saying that you must be able to effectively handle the objection even in its diminished condition.

"Feel, Felt, Found"

An approach that many excellent persuaders find to be effective in overcoming objections, especially in a sales environment is the "Feel, Felt, Found" technique. It works like this. Let's say that a potential customer tells you that a piece of equipment you are attempting to sell is too expensive to operate because it uses more electricity. You would reply thusly, "I can certainly understand that you would feel that way. In fact many of my most successful customers who use this equipment felt exactly as you do before they purchased it. However, when they factored in the costs of routine maintenance and parts, they found that net operation costs per month were actually less than competitive products."  

When you use this approach, you immediately compliment your prospect's intelligence by indicating that he or she asked the same question that many of your most successful clients have previously asked. You are also implying that since so many other smart clients who felt as your prospect currently does were then able to come to the decision to buy, your prospect should purchase as well.

 

Ask us a question about persuasiveness.