Distinction and Differentiation

Oftentimes you'll hear business executives exhort their employees to work towards creating differentiation for the organization in the market. They direct people to find ways to "separate the company from the rest." This is well and good. I think some customers are inclined more to pick a product or service that is distinct in one way than choose based on a generic table of standards.

The more commodified a product or service is, the providers must find ways to distinguish themselves or else price will become the primary decision point - which almost always works against profit.

What I find funny in these efforts to differentiate, if they can be called efforts, is that oftentimes there is no systematic assessment of the competition. In one case there's this company who declared their strategy of differentiation is to invest in their employees through training. The message was well-recieved by the employee audience, but the strategy utterly fails to take into account that the market leaders invest thousands of percent more on wholesale training for their employees compared to them.

As such, in this case, the company has already differentiated itself by not investing in training at all.

While I have nothing against investing in training (I am also a trainer by profession), this as a strategy for differentiation in this case is absurd. At best the company will (barely) keep up with the Joneses, wasting money on "quick and dirty" training interventions just to be able to demonstrate a commitment to training and development, or, more specifically, malasakit (Tagalog for care) for their employees.

Hollow and foolish. There is a host of other places to start with if the goal is to demonstrate malasakit for the employees. If training was indeed so important, can the company establish a direct correlation between job satisfaction of employees and high investment in training among the market leaders.

And even if there were, investing in training is still the inappropriate strategy towards the goal of differentiation. Haphazard strategic management like this leads to differentiation by happenstance. Enjoy the examples found here.