Stating your competitive advantage succinctly
Let's go back to the fictitious networking event from the beginning. I said you needed to be able to answer the question "What is your company best at" within 30 seconds. It's time to try it again using the formula below.

FORMULA FOR A COMPETITIVE ADVANTAGE
A statement that explains what your company is best at.
Your business name + What you are best at + Why

Honda...is best at developing precision engines and power trains ...because its products are the leaders in reliability and technological advancement.

Bikram Yoga...is best at productizing the yoga experience and practice...because it is packaged for franchising.

Google...is best at optimizing searches for any type of information ...because it continues to innovate and push technology past what was thought possible.

Now it's your turn...

My company, __________, is best at ____________ because ___________.

What do you do with it?
Now that you have figured it out, what do you do with it? When you really have it nailed down, it will help you and your staff know:

• Which opportunities to pursue and which to pass by
• Where to allocate resources and where to cut back
• How to do what you already do well, better
• Know the difference between an opportunity versus a distraction
• When to outsource (to another department or externally) and when to keep it in house

You can run your business without a clear understanding of your competitive advantage, but it will be for not. Why? Because mission, vision, goals, and objectives tend to change and shift over time. Your competitive advantages, when you have identified them, will endure and grow stronger. You may choose to use them in different ways, which is why the other elements of your plan tend to morph. But what makes your company unique will stay constant.
The leading organizations in this world have a razor sharp understanding of their competitive advantage.

Everything they do builds and nurtures their DNA. You don't have to be a Fortune 100 company to be that effective and that good. Running your business on the basis of your competitive advantages is the most important thing you can do as a leader of your organization or department. (It's especially important if Buffett stops by.)

_____________________________

Erica Olsen (Erica@m3planning.com) is a principal of M3 Planning, making strategy a reality for growth-oriented organizations. Her company runs MyStrategicPlan, online strategic planning software for business owners, executive directors, and department managers. She is also the author of Strategic Planning For Dummies.