Posted by Tom Grant on May 14, 2009
Phil Montgomery's recent post, "Hatred Is A Bad Business Driver," is definitely worth reading and taking to heart. Here's the money quote from Phil's post:
I remember being at Novell in the late 90's and feeling absolute hate emanating towards Microsoft. This was despite us all using many of their products internally - including Windows - Microsoft has some extremely good products (Excel is a case in point). Novell's hatred of Microsoft caused them to go on an irrational buying binge to assemble products (Wordperfect, DR DOS et al) and compete head-on with Microsoft. As we know, this didn't work - nobody can beat a bigger adversary by attacking them head on. Hatred created a flawed strategy that led to failure.
Of course you have to observe your competitors carefully. Frequently, you'll need to react to what they're doing. However, that's not the same thing as shadowing their every move.
Tribes go to war
Usually, companies kick off these "Kill [Insert Competitor]" campaigns for internal reasons. They need to rally their organization around an initiative that's easy to understand, and plays to their employees' competitive instincts. The academic term for this behavior is negative solidarity, which all societies, from the most tribal to the most advanced, depend on to some degree to define and maintain their boundaries, and to motivate their members to defend the larger group.
Not surprisingly, negative solidarity is only useful to a point. While it's easy to define whom you're against, what exactly are you for? When the stakes are trivial, such as a soccer game or the Miss Universe competition, rooting for yourself against others seems pretty harmless. When you invade another country to distract the citizenry from the problems within your own borders, negative solidarity gets pretty nasty.
PMs get trampled
Since I've been interviewing product managers and product marketers for Forrester, I've seen a definite pattern. The more these groups focus on the competition to the exclusion of their customers, the weaker the PM group, and the less effective the PMs are in doing their jobs. Here's why:
- Competitors are easy to figure out. For technology companies, the competition is the point of reference in the market most like themselves. Understanding the feature list of a competitor's product is far easier than understanding the behaviors, attitudes, and quirks of users. Competitors are people like you; users live very different lives than software and hardware engineers.
- PMs have less to offer for competitive analysis. That's not to say that there's no value in having someone approach the task of competitive analysis professionally. It's also worth having people who dedicate themselves to staying on top of the market. However, competitive intelligence is relatively easy to collect, and easy for Development and other groups to interpret. Therefore, PMs primarily act as a collector of competitive data, not as an interpreter of what it means.
- Competitors can distract from the problems with your own strategy. Any reasonably clever simian can craft a product strategy based on matching the competition step by step. However, that approach makes two courageous and often dangerous assumptions: (1) The competition is following an intelligent product strategy; (2) However good or bad that strategy is, it works for your company.
- Excessive competitive focus undermines PM's ability to say no. For PMs to craft product strategy, they need to be able to veto ideas that don't contribute to that strategy. When the company gets too fixated on competitors, PMs get into a situation that resembles an argument with a Roomba over the finer points of cleaning your living room: It's programmed to respond to particular cues, impervious to whatever logic you try to apply.
This unhealthy dynamic undermines PMs role in the organization, which is a good measure of how well or poorly the company is responding to its customers. Competitive analysis is critical, but it's not a replacement for your own company and product strategy.
On a personal note, Phil's post caught my eye in part because I worked at a company that tried a "Kill Novell" strategy for a while. The source was the salesforce, which was complaining that they were running into Novell's file management products in their accounts. At one quarterly sales meeting, the salespeople were eager to get as much competitive data, plus our responses to the competitive threat, as we could provide.
Three months later, at the next sales meeting, Novell had disappeared from the radar. Meanwhile, we were the same company, slogging through the same sales process with the same products, and often the same customers.
[Cross-posted at The Heretech.]