Stop Competing to Be the Best

Joan Magretta

Here is an excerpt from an article written by Joan Magretta for the Harvard Business Review blog. To read the complete article, check out the wealth of free resources, and sign up for a subscription to HBR email alerts, please click here.

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With Cyber Monday, the tablet wars kicked into full swing. Which one is the best? Is it the iPad? The Kindle? Who has the best technology? The best distribution? Who’s the best overall? For most people, “being the best” is what competition is all about. So General Motors CEO Dan Akerson was simply echoing popular sentiment when, on the day the new GM went public, he threw down the gauntlet: “May the best car win!” he told reporters. The phrase reflects an underlying belief about the nature of competition that feels so intuitively correct that it is almost never examined or questioned.

But if you want to win, says Michael Porter, this is absolutely the wrong way to think about competition. In fact, it’s practically a guarantee of mediocre performance. The first problem with the competition-to-be-the-best mindset is that, in the vast majority of businesses, there is simply no such thing as “the best.”

Consider a business as prosaic as seating for airport waiting areas. You would think that there would be a “best” here — standardized, functional seating. Well you would be wrong. Different airports have different needs. Some want waiting passengers to shop. They don’t want seats that are too comfortable. Some need the flexibility to reconfigure waiting areas. They don’t want long rows of fixed seats. Many airports have to watch their spending. But others — airports in the Middle East, for example — have snapped up luxury designs. Some airports value seats built to take extraordinary abuse. London-based OMK makes “prison-worthy” seating, the industry’s highest standard, using self-sealing polyurethane that can withstand a stabbing without showing the knife scar.

If there is no “best” airport seat, now think about all of the industries in the economy. In how many does the idea of “being the best” make real sense? The best hotel for one customer is not the best for another. The best sales encounter for one customer is not the best for another. There is no best car. There is no best art museum. No one best way to promote environmental sustainability.

Yet, it’s a pervasive idea. Management writers — and leaders seeking to inspire — regularly reinforce it by using colorful metaphors from warfare and sports. These lend emotion and drama to business competition. But, they are misleading.

In war, there can be only one winner. Not so in business, where companies like WalMart and Target can thrive and co-exist, each offering a different kind of value to its customers. In sports, there is just one contest with one set of rules. Not so in business, which is more complex and open-ended. Within an industry, there can be multiple contests, not just one, based on which needs are to be served. McDonald’s is a winner in fast food, specifically fast burgers. But In-N-Out Burger thrives on slow burgers. Its customers are happy to wait ten minutes or more (an eternity by McDonald’s stopwatch) for non-processed, fresh burgers cooked to order.

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To read the complete article, please click here.

Joan Magretta is a senior associate at the Institute for Strategy and Competitivenes at Harvard Business School. She is the author of What Management Is and the forthcoming Understanding Michael Porter: The Essential Guide to Competition and Strategy.

 

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