Trade-Offs

I have always been fascinated with the question “if being different/better than ones competitors is so desirable why do so few companies ever achieve it?”. Kevin Maney in his book Trade-Off (Broadway Books, NY 2009) provides at least a partial answer to the question. Maney, a former writer on technology for the USA Today, makes insightful observations on the reasons behind some of the classic examples of the successes and failures in becoming uncommon.

Maney’s proposition is that it is all about trade-offs. It is about picking how you are going to be different and sticking to that difference. He suggests that there are fundamentally two positioning that matter—fidelity and convenience. Fidelity, he defines, as the total experience that a customer has with a company’s product or service. Companies that choose Fidelity deliver an experience that is superior to their competition. The second positioning, Convenience, is about making it easy to get something. A company that chooses Convenience makes their products/services easier to get, easier to use,etc. The best positioned companies pick one of these--Fidelity or Convenience.

Maney also explains the two common mistakes that most companies make in trying to become uncommon. The first mistake is what he calls landing in the “fidelity belly”. This positioning is neither fish (fidelity) nor fowl (convenience). I find that the majority of companies fall here. They do not do what it takes to be different. They are happy to go along in the pack. Their results tend to be at the industry average or slightly below average. The second mistake is what Maney calls the “fidelity illusion”. Here companies try to be both high fidelity and convenient. I have always argued that attempting this fails because the there are never enough resources to pull off both. Maney argues an additional point that attempting both results in an undermining of the both. Companies that have a fidelity positioning to start with undermine the uniqueness of their positioning when the experience becomes ubiquitous.

Making trade-offs is tough. If it wasn’t then everyone would be doing it. But for those leaders that have the courage to make the trade-offs the rewards are great for their business. I agree with Maney that this is one of the keys to long term success and growth for companies.