Business owners express concern that developing an ownership mindset in their employees might result in their employees becoming their competitors. While that is a possibility, the probability is very low. To understand why, we need to define the difference between ownership and entrepreneurship:
Ownership
The vast majority of people have no desire to create a business. The challenges in doing so feels overwhelming to them…plus it’s not what they want out of life. However, given the opportunity to own a portion, or all, of what they helped create has a lot of appeal.
Entrepreneurial
Contrast the ownership mindset with the small minority who are excited by the prospect of seeing how far they can take their idea. Entrepreneurs are driven by a passion for solving a problem…so driven that they can’t resist establishing a business or charitable organization to solve the problem.
Possibility implications
Let’s examine the implications of the possibility of an employee becoming a competitor. Here are some of the challenges they face in competing with your organization. They have to:
- Develop a compelling differentiation from what you offer.
- Create a memorable brand from that differentiation.
- Develop delivery processes.
- Find funding.
- Hire and develop staff to compete with your organization.
This is just the tip of the iceberg. Let’s examine these challenges in more detail.
Compelling differentiation
In many startup businesses, the owners choose to differentiate on price because it’s easy. They have lower overhead so they can offer lower prices. That differentiation isn’t sustainable.
Let’s assume that they are successful at generating sales at the lower price. As demand grows so do their infrastructure requirements. As their infrastructure grows so do their costs. Now, they’re in the position of having to raise prices.
Since their differentiator was price and, as a result, they’ve attracted price buyers, they’re likely to lose a significant portion of their customer base to the price increase. In essence, they have to find a new way to differentiate or they’ll be forever trapped into the low-price-buyer market.
While they’re doing this, your organization’s ownership mindset is continuously creating new and exciting ways of serving your customers…customers who value what you offer over price.
As a result, your organization continues to attract the creme de la creme of your market which dramatically increases profitability, cash flow and bankability for your business. Succinctly, the new “competitor” you created is constantly playing catch up.
Successful differentiation
In the rare instances in which a competitor surpasses the company that created it, it’s because the leadership of the original company became rigid in their thinking. They became complacent in their success and, consequently, stopped listening to their customers and employees.
That doesn’t occur in company’s that develop an ownership mindset in their employees. The employees enjoy being a part of something bigger than themselves, something that they know they helped create, something that enables them to find pride and joy in outperforming other companies in their industry.
It is precisely this environment that assures that competitors, whether existing or of your making, are always playing catch up.
Takeaway
While I could go into a lot more detail, I think that it’s obvious that the probability of creating a competitor for your business is very, very low.
Developing an ownership mindset within your organization not only affords you a potential buyer for your business, at your price, when you choose to leave, it increases the likelihood that you’ll be the envy of your competitors.
Resources
Making the EXCEPTIONAL Normal program helps you identify and nurture emerging leaders who elevate all around them to higher levels of performance and greater job enjoyment.
Financial Awareness & Strategy program where employees learn to identify opportunities to improve financial results and prioritize these opportunities on the basis of which produces the greatest impact with the least effort. Greater financial awareness = Better decisions.
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