Why Having Strong Competitors is Good

I am a native Floridian, and while I have visited all fifty states and over 110 countries, I have never lived outside of our beautiful state. So, I find what we Floridians are experiencing now in our capital, Tallahassee, both new and interesting.

Politically, Florida is a solid red state, and for global readers, that does not mean communist; it means deep Republican. However, it’s been quite a transition for our state to get there; I can remember when Florida was a solid blue state, then purple, and then pink before becoming red.

Florida Republicans have a supermajority in the state legislature, the biggest in the State’s history, and a Republican Governor. So, if you are a Republican legislator or the Governor, that would make things easy, right? Well, not so much. After recently being part of separate meetings with our House Speaker and Governor, just hours apart, you would think they were from different planets. Both seem to be good guys, but their lack of political competition, or a common opponent, has resulted in them turning on each other. I’ll spare you the details, but it’s not pretty.

The political situation in Florida makes me wonder about the ways an organization can be hurt without competition. The business landscape is littered with examples.

Myspace, Kodak, BlackBerry, Blockbuster, Internet Explorer, and Nokia were all products or brands arguably hurt by a lack of competition. All were positioned as clear market leaders but failed to innovate in a way that allowed them to retain their leadership position. Each of them had the resources and talent necessary to remain the market leader through innovation, but they didn’t feel that pressure.

Competition forces organizations to improve, and that is good, very good. Competition drives innovation, new products, and improved customer service while catalyzing efficiency and learning.

People often think competition lowers prices, but that is not always the case. Interestingly, competition in our company’s industry, recreational boating, does not lower prices; in fact, it raises them. While all boaters would like to pay less for boats, what drives boat sales are new features and benefits, things that actually add to the cost of the boat. This drive for new features and benefits has driven an advancement in recreational boats over the last couple of decades that has been both dramatic and impressive, all driven by intense competition.

Like competition, pretty much all tough times make us better. Over a forty-year career, I have experienced a lot of good times and tough times, but without exception, the biggest learnings and improvements have come out of the tough times. I have led organizations through the early 1990s recession and luxury tax, the dotcom bust, 9-11, organizational turnarounds, the Great Recession, the initial panic and plant closings of COVID, and these were all very difficult times. In the long run, they made us better.

Despite needing to lead during some very stressful times, in every case, the seeds of our team’s future success were sown during those struggles. In fact, it would be easy to conclude that the future success we enjoyed at companies I have led would not have been possible without those struggles.

Somewhat related, I am far from a gemologist but do understand that diamonds are considered by many to be our most precious gem. That’s why they are symbolic of very special occasions, like engagements. I also know that diamonds are formed under extreme pressure. And like diamonds, leaders become much better and more valuable, after undergoing extreme pressure.

So, if competition and even tough times are good, who should read this article and be nervous?  Be extra concerned if you fall into one of these three groups:

• You are dominant in your market: Above, I gave several examples of companies that were dominant in their market and, for a time, seemed invincible, but they all failed. It is super easy and dangerous to get complacent when you dominate a market. Kodak, a market leader and inventor of the digital camera, was put into bankruptcy by failing to commercialize the technology they invented; they were complacent. Blockbuster, a dominant market player, was put out of business by a company, Netflix, that they could have bought for relative pennies, but the Blockbuster team couldn’t see the threat. The more dominant a company is in a market, the more concerned its leaders should be.
• You are a young leader: Young leaders bring energy and fresh thinking into an organization, but they don’t bring decades of experience and often have not benefited from the extreme pressure that forges great leaders. I often tell young leaders that they need to experience some tough times, and they usually look at me like I am crazy. They don’t get it. If you are a young leader and have not managed through a severe crisis, that’s not your fault. However, you need enough self-awareness to understand the experience you lack and value the perspective of leaders who have more experience.
• Everything you do goes well: Leaders who have seen everything they touch go well should be worried. First, they lack the experience of either a tough time or bad luck, both of which are hard at the time but make them much more valuable in the long run. Second, they can be victims of pride. At the root of almost every derailment of a business leader is pride. Humility is a good thing, and it is often a result of challenges.

It is odd that the experiences that are most often the best for us are the experiences we try the hardest to avoid. I understand that, very few like pain. However, when going through those tough experiences, the best leaders view them as opportunities and look for lessons to learn.

So, whether it is tough competition or just tough times, be like a diamond. Allow the pressure to make you better and more valuable. The benefits of that mindset are huge.

Written by Bill Yeargin.
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