DVP is a business school term that I vowed to use only on special occasions. Most of the time I simply ask, “What makes your company different or better than competitors?”
I am not sure which amazes me more; business owners not having an answer, or owners who say ‘their people’ are the difference.
In theory, having ‘people’ be your differentiating competitive advantage is an ideal situation. But in practice, this is almost never the case.
1. Do you attract the best talent?
We are not just talking about the best talent you can afford; the best talent in your region; or the best available Thanks to technology on every smartphone and laptop, there is often little difference between working with a busy professional across the hallway, across town, always on the run, or somewhere on the other side of the planet.
Your talent pool just got infinitely large! Also thanks to many of those same technological advantages, great talent is often able to juggle multiple gigs on a permanent part-time basis. For some this might seem like a conflict of interest, but it brings plenty of advantages for everyone involved and it is similar to a department juggling a heavy project load.
2. Do you lead better than competitors or outside benchmarks?
Great talent demands great leadership. Great leadership is diverse – operating fairly rather than equally. Competition for talent in leadership goes far beyond geography and even industry. In order to make ‘your people’ a sustainable advantage, you must make sure you can continuously inspire them (note, this is very different than motivating them).
Research by Gallup Organization reveals that upwards of 70% of employee turnover is based on managers. Their famous saying is, “People don’t leave or stay with companies. They leave or stay with managers.”
Great leaders throughout the organization make decisions to help achieve a greater purpose – not just quarterly profits.
3. Do you meticulously build/maintain/defend strong culture?
Employers used to offer pensions, retirement plans and bonuses based on performance and longevity. As pension funds are drying at alarming rates, such perks are not offered much any more.
You don’t need to act like a technology upstart to offer a great working environment as a way to attract and retain their people. It is not about the Ping-Pong table, napping rooms, or open floor concepts, per-se. It is about creating a culture where your people feel physically, mentally, and emotionally comfortable to perform their best.
Building this environment is only half of the equation. Maintaining, and protecting this culture is the other half. Research shows that intent and consistency often brings better results than flashy or grandiose promises.
4. What growth opportunities do you offer?
Many companies do attract great talent, strong and personable leadership, and maintain a healthy work environment; but they don’t have much opportunity to grow. I call these the ‘nice places’ because they are tend to be pleasant places to be. They have little turnover among people or customers.
This might sound like a good situation until you look at what happens to a body of water that doesn’t circulate. It slowly shifts from a great place to be towards a stagnant or suffocating environment.
Great leaders build organizations that attract and retain top talent by offering opportunities for growth.
In answering these simple questions, you can be assured that ‘your people’ actually ARE a sustainable competitive advantage for your business.