Editor’s Note: The following article is part of a series written in connection with the American Express OPEN “Adventures in Entrepreneurship” event, featuring Richard Branson. The event includes an online “panel discussion” around certain questions posed by Clay Shirky, our Facilitator.I and two other blogger panelists have been asked to write about business topics posed by the Facilitator. The following is the first question.
Question: What strategies can a nimble business employ to compete against a larger one?
Response: Given enough time, I could write a short book about this subject. But I have a better idea. I will answer this question by referring back to the words and ideas of Sir Richard Branson, billionaire founder of Virgin Companies. He made some of the following points during the American Express OPEN Adventures in Entrepreneurship event and also in his book, “Losing My Virginity” (trust me, despite the title it is a business book).
Branson throughout his illustrious career demonstrates at least three strategies for being nimble and beating the established players at their own game:
1) Do what others are NOT doing – Branson spoke at the Adventures event about his mobile phone company, Virgin Mobile. He said that people wondered why on earth anyone would start a telecommunications company in this day and age. To him, though, the reason was quite clear. All the cellular phone companies in Great Britain were requiring long contracts. Yet consumers did not want contracts. He saw an opportunity to deliver something different, that was not being done.
The same lesson can apply to just about any situation. For instance, I know one retailer faced with competition from retail giant Wal-Mart. Simply put, his strategy is to not do what Wal-Mart does. He literally walks the aisles of Wal-Mart to see what the retail giant is not carrying on its shelves. Usually that means that his merchandise fills narrow niche needs. Wal-Mart supplies the mass market, not the narrow niches.
This particular small retailer also provides a far wider selection of merchandise within those niches. In other words, he goes narrow and deep, instead of shallow and wide. At the same time, because he goes after such narrow niches, he recognizes that he has to reach out beyond his local area in order to get enough customers. So he operates an active online sales outreach. His approach takes constant monitoring and adjustment. He is constantly looking at product selection. But it is why he can compete with a giant.
2) Listen carefully and pay attention to detail – We don’t normally associate attention to detail with being nimble. But it is clear that Richard Branson takes careful listening to a level few of us match. His ability to take in large amounts of data, process it, and then act on it, gives him an uncanny ability to identify new opportunities and jump on them with firm, confident decisions. By the time he makes a decision, he has already amassed a large amount of data and had time to digest it.
In his book, Branson gives a clue to just how detail-oriented he really is. He writes, “As anyone in my office knows when I’ve lost it, my most essential possession is a standard-sized school notebook, which can be bought at any stationery shop on any high street across the country. I carry this everywhere and write down comments made to me by Virgin staff and anyone else I meet. I make notes of all telephone conversations and all meetings, and I draft out letters to send and lists of telephone calls to make. Over the years I have worked my way through a bookcase of them, and the discipline of writing everything down ensures that I have to listen to people carefully.”
3) Have courage … and hedge your bets - Branson cultivates an image of a wild risk-taker who laughs in the face of death. I maintain this is all a public relations act, designed to promote his companies. One of the most striking themes that comes through in his talk at the Adventures event and also throughout his book, is how little appetite for business risk he really has.Branson makes bold moves in business, but they are carefully calculated risks. He always takes steps to minimize the risk. For instance, when he started Virgin Atlantic Airlines — with just one plane! — and took on the industry giants, he was careful to lease (not purchase) a jumbo jet. He also set up a separate company in order to protect the assets of his other business interests.
His words are filled with references such as “managing cash closely” and “protected the downside – always my first concern.” Those are not the words of a devil-may-care risk taker.
It may seem counter-intuitive, but moderating your risk can position you to be more nimble. It is a lot easier to reinvent your business again and again, adding new ventures, if you know the core business is protected and secure. It’s when you put it all on the line, without protecting anything, that you may be forced to forego opportunities.
What do you think? What strategies can companies adopt to be nimble? Read what Rob the BusinessPundit, and Dane at the Business Opportunities Weblog, have written on this question. Then please come back and leave a comment below with your thoughts.