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August 1, 2017

You Can’t Out-Bama Bama or Out-Amazon Amazon … or Can You?

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“Who’s going to finish second this year?” is a regular conversation in my world. Why? It’s because I live in a college town with a football team stuck with Alabama on the schedule every year. I also co-own a sports content marketing company called Sport & Story so I hear a lot of running comparisons to Alabama.

I also live where the worldwide headquarters of Walmart and fifteen hundred vendor teams are daily scrambling to figure out the ecommerce tsunami hitting the world of retail. This article is from 2014, but outlines the strategies different companies are taking to compete with Amazon.

Every week it seems that I hear some version of “You can’t out-Bama Bama” (or out-Google Google or out-Amazon Amazon or out-Lego Lego). One hundred years ago it would have been “You can’t out-U.S. Steel U. S. Steel.” It’s a statement on competition and winning when being compared to an industry titan. It means that a particular institution has climbed to the top of the field and sat there for so long that they seem untouchable, and their name has become synonymous with the unbeatable top of the mountain.

Take Alabama. In the past ten years, Alabama has lost 13 games. They’ve won 126. In the past 3 years, they’ve won 42 and lost 3. They are a perennial leader in moving players into early draft position.

Every year, teams line up to try and beat Alabama … and they fail. The commentators say the same things over and over again—Alabama has the best talent and the best coaches. You line up against them and they just beat you. Alabama coaches call it “The Process” and it’s a system built from the ground up on running power football and a lockdown impenetrable defense.

Take that idea to any industry—retail, financial analysis, non-profits, even the local doughnut shop. Years ago, Tom Peters said, “The thing that keeps a business ahead of the competition is excellence in execution.” If an organization has the best people, and those people are managed to consistently make the right decision, they can’t be beat. Or can they?

Every organization is perfectly designed to get the results it gets, but there is always an opportunity for a company to reinvent itself and jump the S curve. This 2011 Harvard Business Review article notes that you need to look for what’s hidden—in yourself and in the market, and focus on your talent—are the right people on top? Are you empowering people all throughout the organization?

But that’s for reinventing yourself. Do you want to do that and beat the invincible? Here are six ingredients:

  1. It takes leadership —A courageous vision leader (which is not the same as a mature company leader) is vital. You can have a core team but usually, you need one person to demand and inspire change with steel in their vision.
  1. It takes innovation—Wayne Gretzky said, “I skate to where the puck is going to be, not where it has been.” That quote was a guiding idea for Steve Jobs at Apple, one of the best examples of a company that is an unqualified king of the mountain but not long ago was looking up (at the time at Microsoft).
  1. It takes strategy—Those who beat the giants create a market and have great timing. They create a flywheel of success and effectiveness and then make the right S curve jumps most of the time. On a football level, that’s knowing when to settle for the three-yard gain and when to call a trick play and throw it deep. On a business level, it’s making the key hires and keeping them from leaving. And it’s Uber or Lyft figuring out a financial model that works for drivers and for riders in order to compete with taxis.
  1. It takes risk—Big results take big swings and there is always some measure of risk. In every story of defeating the seemingly invincible, leadership took some big risks and more turned out positive than negative.
  1. It takes pivoting—You must try, fail and pivot. Strategy today (what I call Strategy 3.0) demands pivoting above all else. Netflix is a case study in how to beat a giant—Blockbuster at the time—and their story includes pivots. One of those pivots was when Netflix reduced their price because Blockbuster launched a competing monthly service, for example. And of course, their biggest pivot, which came later—moving away from DVD by mail to online streaming.
  1. It takes luck—Intentional strategy is always mixed with good luck and chance timing. In other words, the ball has to bounce our way, like this key play from an Ole Miss victory over Alabama a couple years ago.

Here’s the big idea, though: It is way easier and less risky (in the short term) to mimic someone else than create your own formula card of success. But the great companies’ creators are not mimickers. Read the story of Sam Walton or Steve Jobs some time. Or start subscribing to the podcast, “How I Built This.

Steve Jobs said, “You can’t look at the competition and say you’re going to do it better. You have to look at the competition and say you’re going to do it differently.”

The reality is Alabama and Amazon (and all the others out there in this category) were not trying to replicate someone else. Sure, they might use some inspirational benchmarks and best practices but they cut their own path.

Simply replicating what the market leader is doing won’t work. The industry leader has more knowledge, experience, and resources at doing what you’re trying to do. Their challenge is that they’re so big, their inertia can make it difficult for them to innovate at a high level or scale improvement.

Can you beat Bama? Sure. Can Amazon be beat? Absolutely. You can beat them, but don’t try and beat them at their own game. Learn from them, but don’t simply mimic their formula. You don’t beat Alabama by running power football straight at them. In the last few years, you beat them with a running quarterback—a Johnny Manziel—or a new scheme—Gus Malzahn and Auburn.

You’ve got to do something different with the financials or the customer or the offering. This is how AirBnB found its place and beat the hotel industry—they figured out how to offer non-discriminating travelers cheaper prices. It’s how your local coffee shop (there’s one in every town) fought back against Starbucks—unable to compete on the financials, it offers a local experience as part of an offering.

You figure out a niche or an angle and press in for a while.

 

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