Want To Be a Winner? Play Hardball

by James T. Berger , May 2006

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When it comes to competitive advantage, “playing hardball is not an option, it is a requirement for winning,” according to George Stalk Jr. and Rob Lachenauer, two Boston Consulting Group executives who authored “Hardball: Are You Playing to Play or Playing to Win.”

Stalk and Lachenauer provide a remarkable perspective on competitive advantage. In a short article for Harvard Business School Working Knowledge (July 19, 2004), they write:

“The history of business is littered with the remains of companies whose competitive advantages, once robust, simply withered away. Hardball players, by contrast, strive to widen the performance gap between themselves and competitors. They are not satisfied with today’s competitive advantage – they want tomorrow’s.

“To hardball players, there’s something far more important than competitive advantage. It is, in effect, extreme competitive advantage…the ultimate endgame. Unlike plain old competitive advantage, which can be fleeting, this is something that puts you out of the reach of your competitors…no matter how hard they try, they cannot match it….”

Wal-Mart, Toyota and Southwest Airlines

Stalk and Lachenauer single out three highly successful examples of “hardball” players — Wal-Mart, Toyota and Southwest Airlines.

In commenting about Wal-Mart, they write: “Companies that relentless pursue competitive advantage are wonders to behold. Wal-Mart is first and foremost a logistics company, and it established its competitive advantage in discount retailing in the 1970s with a network of ‘cross-docking’ warehouses….But Wal-Mart didn’t stop with this drastic reduction in transportation costs. It went to ‘everyday low prices’ to stabilize demand and thereby further reduce costs.”

In discussing Toyota’s “hardball” strategy, they write, “Toyota’s production system, for example, is so much better than any other automaker’s that the company practically flaunts it. The system lets Toyota produce, at both high and low volumes, a great variety of high-quality vehicles at very low cost. Toyota is so confident that its system cannot be replicated that it has welcomed competitors into its factories.”

Southwest’s “hardball” strategy focused on attacking an industry paradigm and forcing competitors to try to play Southwest’s game. Stalk and Lachenauer call it the “indirect attack” and this is one of the fundamentals of “hardball.” They write:

“Southwest Airlines’ unusual but highly successful route strategy is a classic indirect attack. Traditional airlines built huge competitive strengths in their hubs; for example, United has nearly 1,000 flights in and out of Chicago’s O’Hare airport every day. Southwest chose not to attack the major airlines on their well-defended turf. Instead, it opened operations in small, out-of-the-way airports….Once Southwest was established in smaller airports, the major carriers faced a dilemma. How could they respond to Southwest’s small-airport success without stepping out of their well-protected foxholes at the major airports? Should they compete directly with Southwest in smaller airports where Southwest had built a competitive advantage? Or should they create their own non-hub-based airlines to compete with Southwest? With either response, the major carriers would be playing into Southwest’s game.”

Five Principles of Hardball Players

According to Stalk and Lachenauer, hardball winners employ five basic principles:

1. Focus Relentlessly on Competitive Advantage. “Competitive advantage is something I have that you don’t,” writes Stalk in the Ivy Business Journal (November/December, 2004). “Too bad for you….When I have the advantage, you are forced to accept defeat or find a way around my advantage to build your own.”
2. Strive to Convert Competitive Advantage into Decisive Advantage. “Hardball players seek to put themselves out of reach of their competition by building their competitive advantage into decisive or unassailable, advantage.”
3. Employ the Indirect Attack. “An indirect attack means that you surprise a competitor with your actions, and apply resources where the opponent is least able to defend themselves.”
4. Exploit Their Employee’s Will to Win. “To achieve competitive advantage, people must be action-oriented and always impatient with the status quo. The will to win can be fostered; softball players can be transformed to hardball players.”
5. Draw a Bright Line at the Edge of the Caution Zone. “To play hardball means to be aware of when you are entering the “caution zone” — that area so rich in possibility that lies between the place where society clearly says you can play the game of business and the place where society clearly says you can’t.”

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Author
James T. Berger, Managing Editor of The Wiglaf Journal, specializes in both finance and marketing and has spent a number in both the investor relations field as well as an account manager and officer at several Chicago advertising agencies.

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