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
  • Francisco May 2, 2012, 8:01 pm

    I think the decisive advantage goes along with the learning process each individual faces in the pursuit of a professional carreer and a better life. Perhaps, the decisive advantage concept can be correlated with Steve Jobs´famous quote and speech at Leland Stanford Jr. University :” you can’t connect the dots looking forward; you can only connect them looking backwards. So you have to trust that the dots will somehow connect in your future. You have to trust in something – your gut, destiny, life, karma, whatever. This approach has never let me down, and it has made all the difference in my life”
    Steve Jobs 2005

  • Adam May 2, 2012, 7:18 am

    “However, there are switching costs involved. Once you go down a path, it is much harder to exit the path than to avoid it in the first place. For example, once you attend medical school, it’s very hard to avoid becoming a doctor.”

    I completely agree with this. Having bachelors and masters degrees completed in business information technology and various industry certifications it is very difficult to avoid the path of going on to become an IT Director or senior IT Director. The financial switching costs would not be the most significant but rather it would be the time. I have a decisive advantage in my field in so far as my experience and qualifications and education allows me, in comparison to my competition at any one point in time. Providing I advance my core knowledge, experience, and skill set at a faster rate that my competitors in any one business period (cycle) my decisive advantage should be improving continually over time. In a field such as this shifts in technology can however erode one advantages quickly from a professional skill set perspective. Personal aptitudes for technology and business excellence however is a decisive advantage which should remain constant as in Victor’s example above over time. Great article!

  • Victor Cheng May 1, 2012, 11:07 pm

    Vinod – working outside your comfort zone is how you grow your skills or the magnitude of your advantage. However, it makes sense to focus on a line of work where you already have an advantage.

    Sylvia – I tend to disagree. It’s best if your advantage is the MOST critically needed skill or talent for the job, not the least required skill. If you have super human patience, then you want to work with people who are entirely unreasonable – because you can handle it (toddlers, felons, the mentally challenge). Its impossible to do those jobs without exceptional patience. I’m not suggesting you actually do that, just trying to illustrate te point.

    Even if you don’t have a decisive advantage, it can still make sense to work in a field temporarily. A lot of people work in consulting fully realizing they don’t have a good long term fit. The key is to avoid wasting time when the fit is poor. If the fit is reasonable but not exceptional, then you might adjust your time in that field accordingly.

    However, there are switching costs involved. Once you go down a path, it is much harder to exit the path than to avoid it in the first place. For example, once you attend medical school, it’s very hard to avoid becoming a doctor.

  • Sylvia May 1, 2012, 8:24 pm

    Hey, Victor! Upon receiving this article, I immediately forwarded it to some of my close friends asking them about my competitive edge. Actually I got the same answer as you: clear logic, nice teaching skill, plus the appearance (I don’t want to bring this up but it ended up ranking first on the list…). I am now a junior majoring in accounting, and the reason that I chose accounting is not I am good at doing it. Instead, my character has nothing to do with a patience and good self-control. But my definition of competitive edge is somewhat different: I think competitive edge should be those skills not required by the job. So other than facing the harsh competition on hard skill directly, you have something that is really special standing out from the crowd. What do you think of it?

  • Marina May 1, 2012, 3:24 am

    three words: become good listener

  • Vinod May 1, 2012, 3:12 am

    As usual, another great article Victor!
    I have a question though. How will you differentiate between decisive advantage and comfort zone? It is always suggested to break out of comfort zone. How both these apparently contradictory statements can be true at the same time?

  • aditi May 1, 2012, 1:07 am

    V well put. Though its a very theoretil thing but you have actually shown how to use it in reality.thanks

  • Nthabiseng May 1, 2012, 1:05 am

    Wow! What an eye opener. Thank you for sharing this with me. It comes at the right time where I am thinking of changing careers.
    Nthabiseng – South Africa

  • jorge May 1, 2012, 12:22 am

    Thank you for sharing wisdom! Many young people like me reading your emails are trying to find out how to best contribute to the world while making a living. It is the most difficult question to answer and it takes years to answer and re-answer.

  • Ravi Apr 30, 2012, 8:39 pm

    Very nice article. I guess in a corporate ladder, it gets difficult to perform self-evaluation, especially at senior positions. But I absolutely agree with getting out of non-Decisive Advantage situation.

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