One day in 2005, the top two stories in THE WALL STREET JOURNAL were: 1) “The U.S. economy appears to have lost steam,” and 2) “Apple’s profit surges more than sixfold.” The message was crystal clear to any CEO who happened to glance at the headlines that day: To succeed in a competitive business climate, you have to innovate. Apple’s philosophy of “Think different” may turn out to be the mantra for 21st century business.
Differentiation, the art of standing out from the competition, is not front-page news. What IS front-page news, in a world of extreme clutter, is that you need more than differentiation. You need RADICAL differentiation.
The new rule: When everybody zigs, zag. Traditional differentiation is an uphill battle in which companies lavish too much effort on too few competitive advantages: the latest feature, a new color, a lower price, a higher speed. Radical differentiation, on the other hand, is about finding a whole new market space you can own and defend, thereby delivering profits over years instead of months.
Think of radical differentiation as the engine for a high-performance brand. It gets you on the fast track to having more people buy more stuff for more years at a higher price. It creates a strategic filter for questions such as “What should we do?” “What should we make?” “Who should we make it for?” “Who should we hire?” and “How should we behave?” With a zag, you can start a new category that your customers, your employees, your partners—even your competitors—will help you build. Without a zag, you could easily end up in the fossil layers of market clutter.
To deploy radical differentiation, you’ll need to master four disciplines:
Ready?