As a former business professor at a major university, I always considered strategy to be the most challenging task facing managers.
While implementation can be challenging, it’s simply the allocation of resources most efficiently and effectively to execute a strategy.
It’s the strategy that determines whether or not the product or service can achieve a temporary or long-lasting competitive advantage in the market. Competitive advantage boils down to a unique competitive product positioning that draws enough customers to generate net gain over total costs.
Simple and straightforward, isn’t it?
Far from it. It doesn’t matter if it’s a $100 billion company’s strategy, a two-person startup, or a product line: Successful strategies don’t have a set formula.
Attempts to post-hoc characterize successful strategies in generalized terms (“close to the customer”, “empowering decisions” and so on) were debunked by research, despite the popular appeal of such attempts.
If the strategy was easy, 80-95% of new products wouldn’t fail and 90% of startup failures would be avoided. Creating a competitive advantage in a highly contested market is the foremost critical factor in a company’s success.
And it is exceedingly hard.
But managers make it harder by glossing over the second most critical factor which makes strategies succeed or fail.
According to the PMI and Economist Intelligence Unit’s survey from 2017, the overriding reason for failures is…
Unexpected market developments.
While market research attempts to predict customers’ reactions to marketing campaigns and product launches, market research can’t predict how customers react if other players counter the launch. That’s beyond the scope of the quantitative techniques available to market researchers.
The result? Your product marketing strategy may fail due to moves by a host of high-impact players, from governments, competitors, regulators, activist groups, disruptive alternatives, and so on.
And in the midst of this failure is, inevitably, the product marketer.
In this article, I'll focus on a variety of topics, including:
- The essence of competing
- Whether predicting others’ moves/countermoves a skill or an innate talent/capability
- Whether AI's a threat to product marketers
- The role of AI in competitive intelligence
- The first step to competing
Playing poker with your career?
Of all the corporate functions dealing with strategies, product marketers have the hardest task. That’s because they’ve little control over what cards they’re dealt. It’s like fencing with their hands tied behind their back.
Product marketers have a choice: play five cards draw poker where you have no effect on what cards you were dealt, have no idea what your competitors’ cards (moves and countermoves) look like, and hope to create the impression that your cards are better. Or, alternatively, consider Go, a Chinese game with simple rules and 2.1×10exp170 possible positions.
Competing in a market is closer to Go than to poker, in that a few simple rules (legal framework for business) allow for a huge number of possibilities. Unlike poker in Go, one must think through what others will do.
The essence of competing
Though most marketers understand how impact others' moves and countermoves can have on the success of their plans, the vast majority pay “lip service” to predicting these moves so that the plan is more robust.
Implicitly, often subconsciously, many rely on luck (they call it timing, as they keep their “fingers crossed.”)
No one plans to fail. However, that differs from planning to succeed. Planning to succeed implies skillful reckoning with the most likely moves/countermoves of third parties who play a role in one’s success.
No matter how good your plan is, no matter how confident you are that it is infallible, no one is immune to the effect of competition. Ignoring other players is a recipe for failure.
Competing is the art and science of accounting for reactions to one’s moves. It must be incorporated into the strategy itself. It’s not an afterthought, nor a “check the box” corporate practice. Many product marketers learned a painful lesson when they ignored this simple second most critical component in competing.
Is predicting others’ moves/countermoves a skill or an innate talent/capability?
Both. Some aspects of the ability to “read other parties’ minds” are based on biology.
For example, research relating to neuroimaging has revealed that in relationships, females use more areas of the brain containing mirror neurons when processing emotions than males. Mirror neurons allow us to experience the world from other people’s perspectives and to understand their actions and intentions.
We can hypothesize that the same natural inclination applies to interpreting the behaviors of competitors, customers, regulators, and other parties. The prevalence of women in both market research and competitive intelligence roles might be related to this ability.
As a skill, competing is an ill-defined area, and business degrees do not confer a “competing skill.” Instead, business degrees equip students with tools to evaluate decisions in rational, economic-based reasoning. But the decision itself- the strategy created by the manager- is outside the realm of rational cost-benefit analysis.
While training the mind to entertain multiple perspectives isn’t as straightforward as learning to use Excel sheets or run factor analysis on big data, our experience shows it can be done.
The first step is for product marketers to reckon with the fundamental difference between true competitive intelligence and what’s “sold” to them today as competitive intelligence by vendors.
Is AI a threat to product marketers?
Every product marketer is somewhat familiar with the term “competitive intelligence.”
Unfortunately, the practice of CI in the vast majority of companies boils down to a misconception of CI being competitive information or data.
This misconception is then translated into “training” which involves “tricks” of how to gather information on third parties (competitors mostly) and monitor market developments.
That fallacy is further reinforced by so-called “platforms” that use the term to “sell” vast access to information across the internet, using algorithms. These days, it’s started to be farmed out to AI (ChatGPT., etc.)
If competitive intelligence is merely information about the competition, the dire predictions about job losses regarding some professions, including product marketers, will come true as AI can gather and synthesize (or “analyze”- another misconception) way more information than a product marketer and then write a report in a fraction of the time.
Initially, the use of AI will simply create more reports. Then, over time, some companies will realize there’s no need to have so many marketers just doing what AI can do.
Therefore, confusing competitive intelligence with competitive information isn’t just an exotic nomenclature issue. It has dire consequences for product marketers.
The role of AI in competitive intelligence
Competitive intelligence is the tiny part of available information relevant to the question of how to compete successfully. That tiny portion is known as “competitive insight.” Replace the terminology and watch your mindset changes with it.
AI cannot generate insight.
If you’re looking for competitive insight, several rigorous frameworks help the filtering of information noise, such as those developed by Michael Porter.
But insight implies finding a strategy that’s hard for other players to disrupt and easy for customers to prefer vis-a-vis alternatives. That’s where the skill of correctly anticipating other players’ moves comes into full play.
Let’s call it somewhat poetically “shapeshifting.”
“Shapeshifting” into the third party you’re trying to understand and predict involves a behavioral economic approach looking for both economic (financial) and behavioral (psychological, sociological, anthropological) clues about how that party sees the world (and your company).
It involves fleshing out internal assumptions and pitting them against market realities that are possibly indicative of that party’s probability of success or failure (“blindspots.”)
The above is a trait you can learn yourself, yet many organizations fail to equip their product marketers with this skill.
A simple first step
Undoubtedly, numerous corporations create a culture that encourages team members to be competitive but does little to upskill product marketers in the art of competing.
This excuse aside, many product marketers are “happy” to follow a set of activities expected as a “standard playbook” without stopping to ask: how will high-impact players going to respond? What’re other players in my market doing that can derail my infallible marketing plan?
One of the most effective tools to “shapeshift” and augment or develop marketing strategies capable of withstanding market developments is war gaming, where teams role-play high-impact parties, and marketing plans and messages are pressure-tested.
War games became popular in the past decade, especially in Pharmaceutical and Defense companies where market battles carry very high stakes, but they can and should become a staple for every product marketer.
If you like to gamble, don’t worry about what others will do. But remember, the odds favor the House, not you.