Subscribe to our newsletters

Do You Need a Rival to be Successful in Business?

Part 1: How Drake impacts HCM (no, really).

I start most mornings with a generally set routine of trying to work out, periodically being successful at doing so, writing some stuff, doing some work, making coffee, making food that involves a combination of stuff already in my fridge, feeding my dog, and then reading social/news sites for a hot second. Somewhere on the back end of that, after my girlfriend has gone to work and I still have about 45 minutes before I need to leave, I watch a bunch of YouTube.

My dog is a fan of Drake’s song “Energy,” which features this familiar (to some) lyric:

I got enemies, got a lot of enemies
Got a lot of people tryin’ to drain me of my energy

Personally, I don’t feel this way about my own life. I grew up pretty privileged in Manhattan and have a solid job at The Starr Conspiracy. I don’t have many enemies. But, as my dog jives and moves and wags to this jam, I always think about business. Does that make me weird? Probably, yeah. But let me explain.

Part 2: Must you have an enemy?

A couple of years ago, The New Yorker did a nice deep dive on American gun violence post-Orlando nightclub shooting. You probably wouldn’t expect a reporter from The New Yorker to spend much time at an NRA convention, but lo and behold, this one did. And here’s a nugget I always come back to; it’s from a section about one of the presenters at the conference:

For several years, Schmidt had a sideline in packaging his sales techniques. He calls the approach “tribal marketing.” It’s based on generating revenue by emphasizing the boundaries of a community. “We all have the need to belong,” he wrote in a presentation entitled “How to Turn One of Mankind’s Deepest Needs Into Cold, Hard Cash.” In a section called “How Do You Create Belief & Belonging?,” he explained, “You cannot have a yin without a yang. Must have an enemy.”

Must have an enemy.

I started thinking about this more and more. So many places I’ve worked, and my friends and family have worked, they define so much in terms of their rivals. They worry about what their rivals are doing. When it feels like their rivals did something stupid, they gloat internally. When it feels like their rivals are onto something, they worry internally — then often rush to copy what their rival just did.

Remember about a year ago when Instagram straight-up copied Snapchat feature-wise, then explained it by saying, “that’s how the tech industry works”? Well, you see it in HCM too. We’ve had clients  who want to define their archetypal legacy as “the alternative to {another brand}.” We’ve done business-planning sessions with HCM companies who spent most of the meeting discussing the branding messages and color palette choices of different rivals.

A lot of attention is paid to rivals and enemies. But how important is that, really?

Option 1: It’s very important.

This NRA guy’s previously mentioned slide deck has massive kernels of truth. Much of human existence is organized around “in-group” vs. “out-group,” and it helps people organize their thoughts on a specific topic. It’s connected to a broader messaging strategy of piling on the pain for an emotional connection, which you may remember from the 2016 U.S. presidential election. If your rival is doing something positive, that can become a pain point to rally your people. Defining around rivals can bring you focus. Focus is a great thing in business, generally speaking.

Option 2: It can derail you.

When you worry too much about rivals, you can end up copying them. Walmart has been doing this for years. Now, they’ve been making money, so that’s a good thing for them. But if your focus on rivals leads to copying them, isn’t that ultimately a race to the bottom for the end customer?

A good example of this in HCM right now is AI. AI is this big, breathless thing in many ways — everyone seems to have it, or be claiming they have it. It’s gotten to the point where our own Jonathan Goodman, managing director of the San Francisco office, is calling it “table stakes.” When Company 1 got AI, and then Company 2 followed, and then 3, 4, 5, and so on — is the AI in these solutions impactful, or simply a rushed product road map item because of an over-focus on what rivals are doing? Vendors might claim it’s game-changing. Would every consumer of an HCM suite with AI? Doubtful.

The Impact on Marketing Strategy

There’s kind of two main avenues in how most companies look at marketing. First is going for market share — which would be closely tied to this idea of bashing rivals in the mouth. Second option is usually going for profit, which is more tied to understanding how much money is currently swimming around in HCM and going after your slice of that pie without worrying as much about rivals. We actually did a whole little ditty on budgeting, market share, and profit strategy this past fall. Check it out. It’s got some good charts and graphs to inform how you think about your own money.

Bottom line: The role of rivals is a nuanced issue.

Human psychology won’t allow us to stop focusing on rivals and completely stay within our lanes. Our brains are wired to predict threats, and rivals are an inherent threat. But would focusing on your own customers, knowing their needs, knowing their pain points, and talking and listening to them be a better long-term play?

It very well might.