How often we find two organizations within the same sector with similar offerings see different results. Why some of these smaller organizations manage to be successful even in adversity while some others struggle even under favorable conditions. Why Ford decided to shut shop (though there would be small presence) while Hyundai (entered India at the same time) is thriving.
We could understand this through the Resource based view(RBV) which provides sustained competitive advantage. It talks about Valuable, Rare, Inimitable and Organized (VRIO) resources to build sustained competitive advantage. While the first three are understood very easily, the last one “Organized” is not well understood and hence highly under utilized. This results in unused competitive advantage.
I would like to explain as to how you could build strategic advantage by focusing on Organization that integrates the Valuable, Rare and Inimitable resources.
Grameen bank, founded by MR Muhammad Yunus gives credit only to those who don’t have any credit history and can’t provide collaterals. Sounds weird? Yes they do this and even give loans to beggars. You might be thinking they would be bleeding money with piling NPA (like most of our PSU banks). But this is a bank with sound financials with on time payments exceeding 98%. They have stopped taking donations as their business is strong. What they have done is to build social collateral, where they create mutual pressure amongst borrowers to pay their dues on time. They don’t measure success of a branch based on NPA, growth in business but through the development of their clients. Some measures are the client’s children are studying, they have toilet at home. Their employees are expected to have real understanding of their customers (don’t confuse this with Kyc) and develop a relationship with them. They have rigorous selection, training, performance management and reward process. Employees are bound together by a larger purpose. The bank and it’s founder bagged Nobel peace prize in 2002 for their work.
How often have you heard excuses like “high price”, “heavy competition”, “customer not convinced”, “no credit” for closing sale. Root cause for these could be traced to basic issues like lack of planning (pre call, post call), not targeting the right prospect, not meeting the right person(who makes the decision) and the vital lack of professional relationship. This is the reason we find differential performance within the organization between different HQs. I am witness to a drastic sales transformation where proper usage of CRM and selling to market rather than budget made organization hugely successful.
As business leaders we need to pay lot of attention to these people processes so that the organization is able to make full use of its competitive advantage. Key here is not just having good systems but how well it is understood and implemented in letter and spirit, that is “When the rubber hits the road”. Leaders might need some help that could make them think beyond what is possible today, have a vision and be in a position to inspire others. Meaningful interventions like Coaching, continuing education and challenging roles would help them accomplish these goals.
Noted American author, sales person and motivational speaker Hilary Hinton “Zig” Ziglar says “It’s not what you’ve got, it’s what you use that makes a difference”. Tap the human potential and unlock your unused competitive advantage.
About author: Mr. Pattabiraman Nagarajan is a HR professional, Consultant, trainer and an ICF certified coach. Has managed organization change and aligned HR practices to ensure business growth. He holds master degree in Social work and a PG Diploma in Business Management from IIM Trichy. He could be reached at npattabiraman@relyonus.in
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