Once you could succeed by competing effectively on two out of three factors: speed, quality, and price. Now, says thought leader Peter Sheahan, add a fourth factor: story.
Companies that offer a narrative that appeals to customers will gain competitive advantage, Sheahan, said during the keynote address at the WERC Conference in Anaheim, Calif. Sheahan, author of Fl!p: How to Turn Everything You Know on its Head and Succeed Beyond Your Wildest Imaginings, believes that supply chain and logistics can contribute substantially to creating those narratives. Take the example of a banana distributor that gained market share by promoting the freshness of the product, said Sheahan. "The trend now is for products to be differentiated on warehousing and logistics because companies see compressed time to store as a competitive advantage. That advantage comes from you doing what you do very well," he said.
But "doing what you do well" is getting tougher. It's no longer enough to excel at two of the four performance factors, you now have to "pick three." "Businesses are going to increasingly ask how can we do what we do better, how can we position ourselves differently, and how can we find new markets," said Sheahan.
Furthermore, better performance does not just come from focusing on innovation alone, Sheahan asserted. He used as an example Apple's success with the iPod. "The real question about iPod is why didn't Sony do it?" he said. The underlying technology was not new when Apple launched the product. Instead its success was built on the accompanying suite of products like iTunes, he argued. "Money gets made in the cracks, he explained. "You can extract value from existing processes."
For more insights from Sheahan, see DC Velocity's interview with him, "For competitive edge, try 'flipping' your thinking."