Don't set standards by competition

Most successful entrepreneurs perform market research before launching a new venture. That research often leads the aspiring entrepreneur to think that success is dependent only upon being better than the competition rather than upon satisfying the basic needs of the market.

Some years ago Roger Smith, who was then the chairman of the board at General Motors, told the following story that is relevant in today's marketplace: "Two men were being chased by a bear. One stopped to put on his tennis shoes so he could run faster. The other said, 'You must be crazy! You can't outrun the bear!' The first man replied: 'I don't have to outrun the bear, I just have to outrun you!' "

Sometimes we get confused about who the competition really is. Smith indicated that GM was not competing with Ford, Chrysler and Toyota but with something much more basic. He was pursuing industry "best practices." As a result, GM literally revolutionized the way it was doing business. Their vision and foresight led to the development of the Saturn automobile, which is one of the most successful new car introductions in the history of the automotive industry.

Some years ago I saw this same concept applied to the computer industry. I was working for Control Data Corp., trying to sell a $5 million supercomputer to McDonnell Douglas. We had completed the field sales process, and we were taking a group of their executives to Minneapolis to meet with our executives. The highlight of the trip, however, was a meeting with Seymour Cray, the designer of five consecutive generations of supercomputers that were truly the largest and fastest in the world.

Following a 30-minute presentation from Cray on his vision of the next generation of computers, the McDonnell Douglas executives were asked if they had any questions. At first, they were a little intimidated by the genius of the man before them. But finally one of them asked: "Are you worried about competition from IBM?"

It wasn't an unreasonable question, but it obviously didn't set too well with Cray. With a sour look on his face, he leaned back in his chair and put his hands behind his head. After a long moment, he responded: "I'm not competing with IBM. I'm competing with nature."

Cray's message was the same as Smith's: If your only goal is to beat the next guy, you may win for a time. But eventually someone will come along to beat you, and then where will you be?

As an entrepreneur, your goal must be to be the best you can be at whatever you are doing, not just better than the next person. Treat customers the way they ought to be treated, not just better than your competitor treats his customers. Produce the best quality products you can possibly produce, not just products that are better than the competition. Cultivate and train the most professional sales staff, not just a staff that is superior to someone else's. Don't judge yourself and your business by someone else's standard or performance; set the standard. Establish the pattern. Become the measuring stick. Don't settle for someone else's idea of excellence; create your own, and practice it for its own sake, not for the sake of being better than someone else.

The ability to do these things right will set you apart from your competition and will build customer loyalty that leads to long-term revenue growth. This loyalty will enable you to retain your customers -- even if someone else comes along with a better product.

David M. Brown is associated with the BYU Center for Entrepreneurship. He can be contacted via e-mail at cfe@byu.edu.

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