Leadership: The Ultimate Competitive Advantage

Competitive advantage. Anyone who is living in the world of business is aware that the concept of competitive advantage has been a hot topic in the corporate world for years. Competitive advantage is what separates, or differentiates, a business from its competition.  It is the reason why people would prefer to do business with you, rather than choosing to do business with your competition. What is it about your business that sets your business apart from those you compete against in the marketplace? The issue of competitive advantage is relevant to the long-term success of any business. In light of the current unpredictable business climate, every business should be clear about its competitive advantage in the marketplace. The common approach to the topic of competitive advantage is to focus on issues like price, quality, service, availability of products, and delivery time. As important as these factors are in any discussion of competitive advantage, none of these issues are the ultimate competitive advantage for a business.

I believe that the ultimate competitive advantage in any business is the quality of leadership that exists in a business. To my surprise, in the many years I have listened to others discuss competitive advantage, no one has ever concluded that leadership is the ultimate competitive advantage in a company. This is rather amazing to me because the quality of leadership in every business impacts everything that occurs in a business. I do not want to minimize the value of price, quality, service, availability of products or delivery time. As important as these factors are in a discussion of competitive advantage, not one of them, or all of them combined, are as influential as leadership. My point is proven by simply observing how often replacing incompetent leaders with competent leaders has led to dramatic improvements in so many organizations, businesses, and departments.  

Why should any of us conclude that leadership is the ultimate competitive advantage in any organization? The answer to this question takes us back to the role of leadership. Leaders are primarily visionaries who are consumed with the purpose and mission of their organizations. They bring clear direction to their people. As leaders, they see what is possible with a long-range view, when others simply see the immediate with a short-range view. In this rapidly changing and highly competitive world, courageous leaders are not afraid of change. They confront reality, challenge the status quo, and make strategic adjustments when it is necessary.

Leadership is the ultimate competitive advantage because effective leaders understand that leadership is about achieving results through people. As influencers, leaders connect relationally with their people. They possess the ability to inspire and motivate others. As people-oriented leaders, they increase the profitability of their businesses by increasing the productivity of their people. To think clearly about competitive advantage is to conclude that those who possess the best leaders, are those who possess the competitive advantage in their marketplace. Your performance as a leader is either your company’s competitive advantage or your company’s competitive disadvantage. What a challenging thought to consider for those of us who are leaders!