This past year, Verizon’s familiar ‘Can you hear me now?’ guy, Paul Marcarelli, began to appear in advertisements for Sprint. Though he served as the Verizon spokesperson for nearly a decade, his allegiance to the company was not strong enough to dissuade him from engaging in an enticing competitor contract. According to Paul, “guess what, it’s 2016, and every network is great.”
This story occurs again and again. According to Bureau of Labor Statistics, the average employee stays at his or her job for 4.4 years. The average millennial (categorized as workers between ages 20 and 35) remains in his or her position for just over two years. On average, companies turn over 15% of their workforce each year. The workforce is transforming into a jumble of job-hopping. While the impact of this trend will reveal itself in the coming years, one thing is inevitable- companies cannot rely on employees as the source of competitive advantage.
People Drive Competitive Advantage
At its essence, competitive advantage is defined as above industry average profits. Employees contribute to competitive advantage. According to the Boston Consulting Group, “people” companies, categorized as those that measure engagement and seek feedback to enhance it, perform far better than companies without effective people practices. People should remain a focus of the business. That being said, in and of themselves, people are not the competitive advantage.
In most cases, customers do not care who delivers products or services, as long as they do it well. Unless you have very specific circumstances, you don’t book your flight because of the pilot. You don’t choose a fast-food restaurant for the person who cooks your burger. And you aren’t loyal to a cell provider because of the actor in the commercials.
In the rare case that an employee or group of employees is the competitive advantage- IE: The George Foreman Grill- the strategy is unsustainable and lacks scalability. If George Foreman turned his back on the grill, would the company still exist?
We need accountable employees who can execute and provide quality customer service. Competent employees, however, are the expectation in business, not the competitive advantage. As companies continue to define strategy in the modern era, they must consider repeatable best practices to educate and motivate employees to deliver the competitive advantage.