One of the things I try to convey when I work with management teams is that organizations must constantly question what they are doing. I put a lot of emphasis on questioning and I don’t say change for the sake of change.

To survive, you have to innovate.

When we talk about innovation, there are a number of beliefs that I believe, although not wrong, are too biased. We tend to believe that innovation means doing different things, that it only occurs in technology and product and that only large companies can innovate; of course doing different things is innovation and of course innovating in technology and product is innovation. But you realize that in the end, in the vast majority of cases, innovation is not doing different things, but doing the same thing in a different way, and that the most radical innovations occur in business models, which is within the reach of any company and often does not cost money.

In today’s markets, there are a number of unstoppable trends that every organization must manage, including “insatiable competition”.

Markets are a relentless war. Our competitors will try to take market share from us and we will try to take it from them.

And in this reflection appears the dilemma Productivity vs Competitiveness.

Productivity vs. Competitiveness.

The main objective of a company is competitiveness. Productivity is a very important factor, but it is not enough. Productivity is the internal look of the company, but the fundamental thing, where we play our destiny will be in the external look, that is to say when the market compares us with our competitors and decides who to buy. Unfortunately, many organizations are only focused on productivity and cost reduction and end up being “anorexic” organizations, unable to compete.

Competitiveness is much more than operational efficiency (good product, right price, efficient distribution). Competitiveness is the result of the sum of two variables: “operational efficiency” and “perceived differentiation”, the image conveyed, i.e. perceived positioning.

Of course, “that perception” must be confirmed with products or services that meet, or much better, exceed expectations.

There are a number of factors involved in competitiveness in all organizations. We could say that “the recipe” is unique, but what changes radically is the specific weight, the weighting of each of them. Every company must define the balance it wishes to achieve, because without this definition, it will be extremely difficult to align all decisions with the desired objectives.

It is necessary to start from the idea that if normality is understood as stability, it does not exist and will not exist.

Companies tend to pay much more for the decisions they do not make than for any erroneous decision. When a company makes a decision, even if that decision can be considered wrong, it always contains a learning experience, yes, always. When I don’t make a decision, apart from the fact that there is no learning, someone else ends up making it for me. Who? My customers and my competitors. The market is sure to continue making decisions, so it is better for me to make my decisions than for someone else to make them for me. In the end, either you invent your future or someone else will invent it for you.

In this environment that has now become so fashionable and that we call VUCA, a concept that came from the military world and that has now been reconverted to the business world, in which the initials correspond to (Volatily, Uncertainty, Complexity, Ambiguity), it is very difficult to have all the information to be able to make decisions. If we wait until we have all the information, it will be too late. We have to find a balance between speed in decision making and of course getting it right, what I have called “uncertain knowledge, right decisions“. But it’s not easy, because in the world of business and strategy, unlike in other worlds, you don’t play alone. You can make your strategic decisions, but every time you do, the market responds and acts, there is always action-reaction, and this forces us to be permanently on the move.

There are limits, but they are never the first visualization we have of them and impossible is only an opinion.