Expertise Marketplace - Professional Service Firm Marketing Blog

Mischief and Diabolical Moves

Guy Kawasaki's blog post on The Art of Driving Your Competition Crazy brings up thought-provoking  and timely questions for professional service firms -- especially if the PSF marketplace hits another economic downturn.  Below is my version of a point - counterpoint. 

• Kawasaki says, "Before you can drive your competition crazy, you have to understand what your company stands for. Otherwise, you'll only succeed in driving yourself crazy." This sounds too one-step, two-step to me.  First, how can a firm know what it "stands for" in a vacuum?   I admit I love his simple challenge to figure out the core of our firms.  He uses Apple as an example -- it stands for "cool technology."  But, quick, can you sum up your professional service firm that easily?   And really, can any firm do that without a competitive context?  SO, why do our firms spend so much time trying to figure out who they are and how they are different?  How come they don't already know this? 
• He says, "You cannot drive your competition crazy unless you understand their strengths and weaknesses. You should become your competition's customer by buying their products and services."  Most PSFs literally can't buy their competitors' services, but Kawasaki's implied point is still valid.  For the sake of this discussion, let's assume most PSFs do a good job of understanding their competitors (they don't, but bear with me).  Kawasaki calls on us to drive our competition crazy.  Come on, does any professional firm think this way - even if it's a great idea?   The answer is NO for most, because it requires a healthy dose of marketplace confidence, a dash of strategic vision, and a dollop of proactivity. In fact, there's way too much competitive passivity and reactionism in professional service firms.  (And I don't agree that merging with and acquiring smaller foes is necessarily strong evidence of competitive savvy)  Admit it, marketers:  how many times have you been frustrated because your firm dragged its feet just a little too long on announcing that new study, or that new senior hire, or that new thought leadership seminar, only to see your rival announce something so similar as to make your firm look like an also-ran?  SO, why aren't more professional firms taking more proactive steps to address their competition?  Why are so many so passive? 
• Kawasaki urges us to "have some fun with your competition--that is, to intentionally play with their minds."  Some of his examples recount delightfully diabolical moves -- like the Korean War U. S. Army dropping "extra large" condoms on the Communist Chinese but labeling them "medium."   But, geez, if PSFs were to do this, they'd have to know who their firms really are and who their foes really are.  (And of course, they'd have to be mindful of the ethical boundaries and possible outcome of their actions if they planned to mess with their competitors' minds like this.)  But let's be honest:  most large professional firms cross-pollinate themselves so deeply with the talent from their competitors that it waters down the distinctions between them.  And the rest aren't nearly as confident as they should be about what makes their competitors tick to able to get under their skin.  SO, why aren't more professional firms capable of this level of mischief proactivity? 

A new focus on Game Theory

In the fall of 2005 it was announced that the Nobel Prize in economics had been awarded to two academics for their work in using game theory to understand competition and conflict.  This news stimulated McKinsey & Company to reissue an article published originally in a 1997 issue of World Economic Affairs by Hugh G. Courtney.  It's entitled "Games managers should play," and it's available to subscribers only. 

For many professional service firms, new to the realm of competitive intelligence, this article offers a straightforward outline of how marketing strategists can get inside the heads of their competitors to understand their economic incentives and likely behavior.  It features a game theory process (McKinsey's?) that was applied successfully in more than 100 company situations from 1995 to 2000.  The steps include:

1. Define the strategic issue and how it relates to other strategic decisions being made in your market.      
2. Determine the relevant players and which will have the greatest impact on the success of your strategy.  Do not assume that all of your strategic games are played against competitors (some may be suppliers, or providers of complementary goods and services) and that there is always a winner and a loser. 
3. Identify each player's strategic objectives.  Don't assume that other players always have rational, profit-maximizing objectives. 
4. Identify the potential actions for each player.  Like in a chess game, "look forward and reason backward."
5. Determine the likely structure of the game.  Courtney writes, "Will decisions be made simultaneously, in isolation, or sequentially, over time?  If sequentially, who is likely to lead and to follow?  Will this be a one-shot decision, or will it be repeated?"

Courtney provides an example, but of course not from the professional services arena.  I skipped it.