Don’t Have a Competitor? Invent One

George E. Danner

May 2, 2022

Day to day life inside a corporation can be insular. The energy and focus is on the latest operational challenge, the budget cycle, capital projects, COVID protocols, or org structure. We spend far too little time thinking—in a healthy way—about our adversaries and what they are up to. Yet in doing so we allow ourselves a very powerful lens to look at our operations that we would not otherwise have. Are you in an industry where your competitors are not very strong or sophisticated or are much smaller than you? Are you in an industry where the concept of competition is a bit foreign? Well, perhaps it’s time to invent a competitor to do the job.

What I am talking about here is a sandbox simulation exercise on-paper. Here’s how it works: invite your suppliers and partners or even your most closely aligned customers to sit down and describe a competitor to the home organization. Perhaps it’s a bit smaller and more nimble? Perhaps it has a wider distribution network? A different product line? Perhaps its supply chains are completely different from yours? One whose business model is as different from yours as night and day? This is a fun, creative exercise that allows people from across your ecosystem to express principles of the business and then codify those concepts on paper. Take turns drawing and critiquing the Value Chain of the business and its key attributes. Some of your most valuable people likely used to work for competitors and their voice is crucial in this arena.

After the exercise is complete and you have all of the ingredients of the competition nicely organized on paper, hold that competitor up (maybe literally?) against your own company and then ask yourself: how would you compete against such a company?

This should in turn spawn numerous conversations and debates around the company—the right kinds of debates that require formal, well-reasoned answers. The more discomfort and disagreement across the company the better—that is the best metric to show that the exercise is working. Engineering intelligent counterdefenses makes you a better, stronger, more robust company no matter what the market throws at you.

I have even seen a few firms create digital twins of their hypothetical competitors so that they could model moves and countermoves using the science of Game Theory. You would not have to go that far for this exercise to be useful, but you should know that there are degrees of sophistication that can be put to the challenge of competing in a complicated, volatile world.

Customers genuinely appreciate that you are involving them and doing your homework to ensure that you are the best solution to their needs, not just in words but in actual, data-driven deeds. The last thing any customer wants is a fat-and-happy supplier that never bothers to evolve.

Military units and sports teams do this all the time—sometimes under the language of red/blue teams. They invent synthetic offenses that they seek to counter. They create their own surprises as a means to test their readiness for the upcoming competition. I have seen this work firsthand to rejuvenate companies out of their complacent, monotonous safe houses.

Competing against a formidable albeit imaginary enemy is just the kind of creative tension that most companies need.

Good luck… you will need it.