The Decisive Advantage

In any kind of high stakes competition, whether for your clients or for your own career, it's VITAL to have a decisive advantage over the competition. Warren Buffet calls in the Durable Competitive Advantage. Michael Porter calls it Competitive Advantage. Regardless of the phrasing, the concept is the same:

NEVER compete in a competition where you don't have a major advantage over the competition.

(I suggest re-reading that last sentence 3 times.... most people, including most CEOs I know, do not grasp that point)

Having taught this point to thousands of CEOs across the United States and to tens of thousands of aspiring management consultants, the most common question I get asked is, "How do I figure out what's my decisive advantage?"

This is THE critical question.

Before I answer this, let me review WHY determining your decisive advantage is so important. It determines two factors in any effort: 1) the amount of effort required, 2) the likelihood of a positive outcome.

When you have a decisive advantage, the amount of work required drops substantially and the likelihood of success goes up considerably.

Yet despite this common sense rule of thumb, few people actually consider whether or not they possess a decisive advantage in deciding whether or not to compete or deciding how to compete.

One reason for this is many people are simply unaware of their own decisive advantage.

So let me address HOW you can figure out what your advantage is over everyone else.

To start, it's actually very hard for you to notice your own unique talent, gift or ability that's the underlying basis for your distinctive advantage. A part of the problem is most people take for granted their gifts... because often you've never known life without it!

For example, if someone told you that you're a gifted listener. If you're like most people, you won't think of this is as a gift or an advantage over other people because you've never known what it was like to NOT be such a good listener. You're just too accustomed to your own gifts.

The key to discovering your own gift is to realize you need to see yourself through the eyes of the people around you.

For managing your own career, this means asking friends, families and colleagues what makes you special or different from others? It means asking your boss, why did you hire me vs everyone else?

It means asking your parents, what were the 1 or 2 things you did as a child that was unique or better than other kids of the same age?

I often encourage my corporate clients to under a similar self assessment -- to determine what they're company's decisive advantage in the marketplace. I have them call up their top 10 clients and ask them a simple, but revealing question.

WHY do you continue to do business with us?

If all 10 clients give the same reason, THAT is the company's decisive advantage in that market.

You would think that most companies would naturally know the answer to this question. But in many cases they don't. That's because a decisive advantage is a RELATIVE comparison.

Even if you know your own abilities at an absolute level, you don't always have a clear sense of the abilities of your competition. Without the benchmark, it's hard to figure out your relative advantage or disadvantage.

What I find interesting about one's decisive advantage is that it's fairly persistent through time. For example, about 4 years ago I worked with a friend and colleague of mine Rob Berkley, an executive coach, to figure out my own gifts and talents.

He had me ask my friends, families and co-workers many of the questions I've outlined above. In total, I asked 10 people to describe what they thought my #1 talents or gifts were.

The two themes that came up over and over again were:

  1. Clarity of Thought
  2. Good at explaining / teaching things

I had a few reactions:

  1. It was surprising to me that other people thought my thinking was particularly clear. I mean my thinking is just my thinking. My thinking has been clear to me, but I just assumed everyone else's thinking was just as clear. But, it turns out all of my family, friends and former co-workers disagree. While I don't think my own thinking is that clear, apparently on a relative basis it is.
  2. I never saw myself as a teacher. Yet, everyone else did. In high school, I was always the guy helping everyone else pass their college entrance. (They all did well!). In college, I was teaching financial planning and retirement planning to my friends studying sciences. I even help them setup their retirement accounts at the age of 19 years old. It didn't seem like that big a deal to me at the time, but apparently to others this was not the norm.
  3. Finally, 100% of the replies were more or less IDENTICAL. In short, everybody I asked thought "clarity" and "teaching" were my gifts... EXCEPT ME!

So here I was truly shocked by the answer, and all of my friends are shocked that I'm shocked.

I get a lot of emails from my readers about Case Interviews that are very consistent with the feedback from my friends. So even though at some level I don't quite believe, the qualitative data strongly suggests that I'm a clear thinker that can teach.

It's a hypothesis I try to, but can't seem to, disprove, and thus I reluctantly accept it as true even though it contradicts my historical self image.

So the way to identify YOUR gifts and talents... which in turn is the source of your decisive advantage... is to ask OTHER PEOPLE what they think is your gift or talent.

The next step in the process is to have the COURAGE to avoid competitions where you have no advantage, and to pursue competitions where you DO have a DECISIVE ADVANTAGE.

For example, as a small business owner and a consultant that works with other small businesses, I come across a LOT of opportunities for investment, markets to get into, etc. It seems with every speech or article I write, someone suggests a business opportunity tied to that.

I have created a rule for myself. It is the same rule I apply to my corporate clients when advising them on company strategy.

Here's the general rule of thumb, followed by how I apply it to my own career.


The Corollary is:

Get OUT of any market that you're ALREADY in,
where you have no decisive advantage

(Note: This is very hard to do emotionally)

As it applies to myself, I turn down ALL business, investment, product-extension, and customer segment opportunities where my ability to have clear thinking and be a good teacher is not relevant and doesn't provide an edge in serving customers.

For example, I would never operate a McDonalds franchise because my talents in clear thinking and teaching provide very little competitive advantage. It's unlikely that a McDonalds restaurant in my control would be dramatically more successful than one run by someone else.

Another example, I realize one of my competitive disadvantages is that I'm not particularly creative or inventive. I'm a much better improver than I am an inventor. So I stay away from opportunities where inventiveness is the key to success.

Again, my strengths in clarity and teaching don't provide any edge. It took my several years and huge financial losses to learn this lesson the hard way. That being said, I often work with clients that are great inventors and innovators -- forcing them to have clarity in which market segment to focus on or teaching them how to build a business around a core invention or innovation.

I do consider accepting invitations to join the boards of directors -- because my strong suit in clarity is useful here. But there are many roles in charities that I decline because I'm not very well suited for -- namely anything involving lots of details, extensive coordination, complex scheduling, etc.

It is for the same reason that most of the people I do hire are very good at details--precisely because I'm not, and I know I'm not.

As you can see, seeing your own career and the world around you through the lens of distinctive advantage leads you to make different strategic decisions -- about your life, your career (and the businesses of your clients).

It's a useful perspective to keep in mind and one that I encourage you to adopt.

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23 comments… add one
  • Shim Jul 5, 2012, 12:28 pm

    Seems to me that “Decisive Advantage” could result from innate abilities (hence asking parents for feedback ), or maybe learned competencies ( the ten thousand hour advantage of early starters ). But at what level should one be looking to identify these ? – Personality aspects, thinking styles, decision making approaches, physical capabilities (sports), other talents or specific skills/abilities picked up through education+practice ( ex: accounting knowledge, programming skill in Java, six sigma statistics, powerpoint presentation making ) ? Is there a good place to pick up a comprehensive but mutually exclusive list of abilities/competencies to correctly ascertain one’s decisive advantage ?

    • Victor Cheng Jul 5, 2012, 1:00 pm


      I don’t know of a comprehensive list. A good place to get some, but by no means complete, set of data points is the books Strengths Finder 2.0. It includes an online assessment. Generally most people, myself included, find the results of strengths finders 2.0 correlates with their ultimate “ah ha” discovery of their own talents, but often that alone isn’t enough to spark the insight.

      Also, I find innate ability and 10,000 hours learned abilities are often correlated. If one has perfect pitch hearing, chances are higher that as a child one might learn to play an instrument because its comparatively easy relative to other kids.

      In terms of timing, it’s never too early to start looking for signs. I’m observing my 8 year old daughter and I find that she’s very creative both from a design/creation standpoint and from a solving life problems standpoint. She grasps complex concepts (business ones) very easily and her logical reasoning is very sharp (which does not make my wife happy in an argument with her). But her math computation is much, much weaker by comparison. As parents, that observation is very much influencing what we expose her to. For example, I plan to take her to an invention fair to see mechanical inventions. But, I probably wont be taking her to math olympics.

      Also, if you’re fairly early in your career, you might not discover THE big insight initially. But, you should still make every effort to try and see what you come up with. Perhaps you won’t have enough firm data to come to a solid conclusion, but you might have enough to have strong hypotheses… that might get proven out over the next few years.

      If you have the thought that X MIGHT be your strong suit, that observation helps you look for confirming signs of this over the next few years.

      If you don’t do this, what more commonly happens is people obsess over their weaknesses. For example, if a student in school gets 4 F grades (50%) and 1 A grade (90%+), most parents and most kids think I’m a loser.

      I think, well thank goodness there’s at least ONE thing the kid is good at. So what did he or she get the A in.

      Same idea for those in the working world.

      If you get a review that says you’re lousy at X… the more important question is what is (1 – X)? Or the part you were exceptional at? Pay Attention to THAT… especially if THAT matches your strong working hypothesis of what you suspect your strong suit is.

      Finally, I would say the to look for a decisive advantage, look one layer beneath the job skills level. So if you’re strong in Java programming, you want to go one layer deeper and ask yourself WHY are you good in Java programming.

      For example, most exceptional Java developers I know if you give them 3 – 6 months, they can be exceptional C++ developers too. There is an UNDERLYING skill that makes mastering programming EASY… THAT underlying skill is the one you want to grasp, not only how that talent is currently MANIFESTED.

      The reason why this is important is because those underlying skills can often by manifested in other, less common, less obvious, ways. If you think Java is your talent, it won’t prompt you to consider what other fields or career options exist that use the UNDERLYING skills set that makes Java easy for you.


  • Yify Jun 19, 2012, 6:03 pm

    Thanks Victor!

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