In a talk earlier this year to employees, Nokia CEO Stephen Elop asked a question that many were probably afraid to answer truthfully, given how Nokia is struggling to combat the iPhone. As BusinessWeek described it:
"When he asks how many people in the crowd use an iPhone or Android device, few hands go up. "That upsets me, not because some of you are using iPhones, but because only a small number of people are using iPhones. I'd rather people have the intellectual curiosity to understand what we're up against."
This is refreshing statement; many executives would have berated their employees for not keeping the faith while a company faced its biggest crisis.
Don't Enforce a Monoculture
One of the surest ways of losing touch with real customers' needs and getting outsmarted by competitors is to enforce a monoculture in your organization, where competitive products are banned and employees only come into contact with your own offerings.
My first job out of college was at Sun Microsystems, and in those days (early 90's) it was forbidden to have any competitive products, whether they were from Microsoft, Silicon Graphics, Apple, or Dell. Since Sun made hardware and software, only Sun machines running the Sun operating system were allowed. (In the design group we did have a couple of Macs as the software we needed wasn't available for Sun's OS, but they had to be kept hidden away and bought and maintained clandestinely.)
As a result, every Sun employee lived in a Sun monoculture. This was unlike the environment most Sun customers inhabited, where there was a mix of hardware, software, and platforms from a variety of different vendors. Customers had to deal with integration issues that were never felt by Sun staff. Furthermore, Sun employees were "shielded" from understanding what competitive products could really do, or from gaining insights into how they might be falling short, or actually meeting customer needs better in some ways than Sun's products.
I remember when we were starting a new project that we had to visit the nearby Oracle headquarters (ironically, now Sun's owner) to get our hands on a wide variety of competitive hardware, as Oracle had to test its software on all platforms and manufacturers. We learned more in those few hours of hands-on tire-kicking than we would have been able to in weeks of desk research.
Encourage Competitive Use, Don't Punish It
Too often, buying and trying competitive products is frowned upon and even seen as a moral weakness. As I wrote about in Innovation X, when the team developing the second-generation Ford Taurus bought a Toyota Camry (with great difficulty) to try it out, it brought to light critical quality factors that significantly changed how the team approached its work. In her exhaustive book about this project, Mary Walton describes how buying competitive cars, especially Japanese ones, was seen as practically treasonous at Ford in the 1980's.
This attitude is not healthy. You should encourage people at all levels — starting at the top — to be immersed in your competitors' offerings, just as they should be immersed in understanding your customers' lives. Without a clear-eyed, honest perspective about how you are superior and where you are falling short, you will fall into a falsely narrow view of the world.
Walton also noted how Ford executives (as is the case at most car companies) were regularly given new cars, and all servicing was handled by in-house technicians. They never had to deal with oil changes, indifferent dealerships, older cars starting to wear out (since they got replaced so frequently), or any of the other annoyances that can come from car ownership. They lived in a perfect bubble that hid the quality advances their Japanese competitors were making in strides.
Don't just encourage competitive usage, but make it policy. It's not always easy to do in some B2B cases, but for almost any consumer product or service there's really no reason why this can't become a regular practice.
Pay for products and services out of the company purse. Don't rely on people to pay it for themselves (because many won't, or will resent having to). Invest in paying for dummy or shadow service accounts, such as wireless or entertainment subscriptions, even insurance policies. Just because you may offer employees a discount on your own products or services doesn't mean that they can't also be encouraged to try out the competition.
Think like a library and make sure competitive offerings get passed around to different employees, and aren't just used by one person. Maximize the exposure and therefore the learning.
Hire curious people who seek out competitors and venture to the edges of your business to find the potential disruptors, trying out products and services that you may not see as current competitors but who may become ones in the future.
Have people formally or informally report on what they find so that others can gain the insights even if they didn't use the competitors firsthand (this becomes a type of pre-emptive knowledge management).
Backed up by concrete actions such as these, you can establish a culture where trying competitive products is not seen as the height of treason, but as loyalty.