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Success goes to firms that dare to be different.

Success goes to firms that dare to be different

Ask 20 business people to list a dozen companies that stand out from the crowd, and it is likely that they would broadly agree on around half of them.

In the world of information technology, Apple and Google would almost certainly be on everyone's list. Tesco, despite its recent stumble, along with Amazon, would probably be there to represent retailing. And most would agree that Rolls-Royce stands out in the world of engineering.

What makes companies like this so different from their competitors? Although leadership, culture and core competencies can play key roles, in the Spring 2012 issue of MIT Sloan Management Review, Jules Goddard, Julian Birkinshaw and Tony Eccles suggest that such firms stand out because they dare to be different. The authors argue that, in the end, a company's beliefs - or what the authors refer to as its 'uncommon sense' - are often the most critical source of differentiation.

The authors argue that many companies rely on frameworks and models such as industry analysis, market segmentation, benchmarking and outsourcing. 'As a result,' say the authors, 'they miss out on finding new insights into the preferences or behaviours of current or potential customers.' It is the distinctive beliefs, not the shared ones, which account for a company's success or failure.

They argue that becoming distinctive is not only about coming up with novel beliefs and enlarging the size of one's domain; it is also about undermining the competitive positions of competitors.

The authors advise companies to: discover new truths that customers and employees value; discard old truths that are no longer valid; maroon competitors within an outdated way of working; and neutralize the distinctive beliefs of the most dangerous competitors.

Jin Zhiguo [she-GOO], chairman of China's Tsingtao [sing-TAW] Brewery, employed precisely such methods when put in charge of Hans Brewery, a fresh Tsingtao acquisition, as detailed in the April 2012 issue of Harvard Business Review. Zhiguo set out to revolutionize the brewery's culture over the next five years, partly in response to aggressive market competition from Western brands.

Among his first actions was to sit in restaurants and talk with customers about beer. What he learned led to a more popular product and better distribution.

Within a year, production rose from 1,000 to 790,000 bottles a day. Hans became Tsingtao's best-performing brewery. Its finances were transformed from annual losses of 25 million yuan to revenues of 50 million yuan.

In contrast, there remains much work to do at Canada's largest technology company, Research in Motion. In Bloomsberg Business Week from the 9th to the 15th of April 2012, Felix Gillette explains that its BlackBerry devices have been losing market share in the US to Apple's iPhone and to devices running Google's Android software. Plunging US sales have left RIM's share of the global smart-phone market at 8.2%, down from 14% a year earlier.

An element of complacency was partly responsible. Thorsten Heins, the company's new chief executive, admits that the firm failed to learn the necessary lessons when some of its core white-collar customers began replacing their corporate-distributed BlackBerries with Apple and Android-powered smart-phones from home.

Felix Gillette reports that, as the introduction of the BlackBerry 10 approaches, Research in Motion will be working with enterprise customers to upgrade their employees' BlackBerrys with newer, more nimble models.

Ten years ago, Research in Motion would probably have been on many people's list of most admired companies. Its fall from grace – through failing to react to fundamental changes in the market – has been quite rapid. How many of the current top 20 companies will still be among the most admired in another five years?