Saturday, June 23, 2012

Business Can Be War But It Doesn't Have To Be

There are alot of similarities between sports and business.  Football, for example, is a scaled down form of war with less stakes and less consequences.  If you're not trying to physically dominant your opponent in football then you're probably not in the profession.  On the contrary, business has some important differences from war.

When people define business as war, they're illustrating their belief that your goal in business should be to win the game or dominate your competitor.  Implicitly this means that everyone is playing the same game with the same rules and competitors.  Similar to war, there are alot of competitive forces and strategic decisions involved in business.  But that's where the analogy should stop.  The implicit assumption that businesses are always playing by the same rules and with the same competitors, as is the case in sports and war, is false and extremely dangerous in business.

The video below highlights the modern departure from the "business is war" mentality by Sara Blakely, billionaire and founder of Spanx.

http://video.cnbc.com/gallery/?video=3000097262

Unlike sports and war, businesses aren't necessarily bound by the same rules and competitors, nor do opponents share the same battlefield.  In business you are rewarded handsomely for your ability to change the rules/competitive forces, redefine the battlefield/industry and find new customers, consumers and competitors. 

Apple, a traditional computer company, found a way to compete in the MP3 device industry with itunes by rethinking computer hardware and software and its applicability to other industries. Southwest found a way to compete differently in the airline industry by modifying their business enough to lower their airfare prices, enticing price conscious customers to consider flying rather than driving.   Spanx redefined the pantyhose by eliminating the foot bottoms, making the experience much more comfortable for women and adding other features that women used to have purchase separate products for.

Business can be war, but it doesn't have to be.  It takes much more effort to dominate your competitors by competing with them for the same customers in the same industry, than it does to enter different industries, or create new industries, and discover customers, or convert non-customers, that competitors have yet to serve.



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