You spend your evenings scouring industry journals and websites and flatter yourself with the satisfaction of knowing your market inside and out. You keynote regularly at trade shows and are the first to buy a table at large industry conferences. If there’s a competitor in the wings, waiting to chew off some of your business, you’ll be ready to flatten them — right?
Not so fast. The days of tracking competition by immersing yourself in your own industry are gone. These days, the competition can come from anywhere — most likely from outside your industry — and can blindside you before you’re even aware it exists. We live in transformative times, and we can thank exponentially powerful technology for this development. It makes it possible for highly innovative companies, like software and synthetic biology businesses, to emerge against traditional leaders in fields as diverse as healthcare, education, manufacturing and energy.
The lesson for executives: Your competition is not who you think it is. If you persist in ignoring what’s happening beyond the narrow confines of your industry, your company could end up on the endangered species list.
Several months ago, I chaired a panel discussion of CEOs who were speaking on the future of their respective industries. I brought up 3-D printing, a technology that allows for the creation of product parts in record time, thereby revolutionizing manufacturing. I asked my fellow panelists how this disruptive development would change their businesses.
The awkward pause told me all I needed to know. I have seen this same response too often. Most business leaders aren’t taking a far, wide and deep enough view of the competitive landscape. In this case, 3-D printing, which collapses product development and manufacturing timeframes, has become a disruptive technology.
Another example of competition coming from unexpected places is in the pharmaceutical industry. Who in the pharmaceutical business would have guessed that their competition would come from a company like Google? Traditionally, companies that conduct healthcare or medical research have considered biotech firms as their competition. However, software companies, not biotech businesses, are the ones that keep pharma executives awake at night. Healthcare research has become an information-gathering challenge, and this is where software companies — and more specifically, companies with expertise in managing large databases of information — have an advantage.
Groupon, the online couponing website, is another company that has seemingly come from nowhere to clobber a more traditional industry. In this case, the Yellow Pages and other phone directories have enjoyed a leadership position since the dawn of the telephone.
In contrast to paging through a dense book of offers, Groupon conveniently sends real-time discounts directly to your email inbox. Members are free to decide what services they want to use and when — at zero delivery cost. Yellow Pages companies, whose coupons and special offers turn up in a big fat book that hits your doorstep a few times a year, could never have imagined that a startup like Groupon and a high-tech company like Google might herald their downfall.
If your leisure time is spent reading trade journals and attending industry conferences, you may have a woefully incomplete picture of your competitive future. You may not see the stealth innovators who are quietly harnessing technologies to displace your business.
When the X Prize Foundation (where I serve as chairman of the education and global development) ran a competition last year to develop street-ready vehicles that would average more than 100 miles on a gallon of gas, not one of the prize finalists came from the traditional auto industry. A group of Philadelphia high-school students came close to the finals, with a modified Ford Focus using lithium-ion batteries. The lesson: don’t underestimate who competitors are and where they’ll come from, and don’t get too comfortable about your ability to out-innovate your traditional competitors.
Here are three steps to take to break out of the executive comfort zone:
1) Expand the circle of events you attend, or experts you consult, far outside your market space. When you listen to the buzz only within your industry, you tend to hear about the same businesses and innovations over and over again. You’re not stretching your worldview by staying in the industry box.
2) Go to visionary events that look at innovation from many different angles, and don’t restrict the discussion to a specific industry. The venues I like are the Exponential Technologies Executive Program at Singularity University (I sit on SU’s board), which is dedicated to teaching executives about exponentially growing technology; The Economist’s Ideas Economy: Innovation conference; the WIRED Disruptive by Design conference; and the TED events.
3) Expose yourself to new concepts and, when you do, think hard about how you can make them work for you. Could these innovations apply to your business and make it better, or can you envision how an upstart company could use them against you?
Opening your mind to new ideas for evolving your business makes you realize that you are more vulnerable to competition than you think. This realization will propel you to embrace game-changing business concepts that may not have occurred to you a decade ago. In short: stay curious, stay open-minded and stay alert. And remember that your competitors may be hiding in plain sight.