Introduction

In good times you should never blindly follow the herd. But this is even more relevant during bad times. As Albert Einstein famously said, "the definition of insanity is doing the same thing over and over again and expecting a different result". To develop lasting competitive advantages and provide new, unexpected value for your customers, it is critical to think and act differently from your competitors. You have to reinvent the game.

A contrarian is someone who does not mindlessly imitate the competition or follows popular opinion or practice. A contrarian challenges the conventional wisdom and "zigs when others zag". It cannot be emphasized how important it is to have a contrarian mindset to succeed in business by confusing competitors and exciting customers.

Stop copying and following your competitors. Rethink how you think. Avoid the habit of conducting the same promotions at the same time, every year. Stop introducing products at the same time every year. The only way to stand out from the crowd and provide new, better value to customers is to be creative, unique, and innovative.

Experiment

You cannot just decide to think differently and leave it at that. Contrarians carefully analyze what others do, both within and outside their industry. They then develop new ways to create value that differentiates them from the competition. However, you should not just blindly throw caution to the wind and make changes without ensuring your new ideas work. You need to conduct simple, small experiments to test your ideas.
With more business being conducted online, it is easy to conduct simple experiments online. From A/B tests which allow you to test multiple items and see which engage the highest, or using open innovation methods to get direct feedback from consumers, there are countless ways to perform simple, inexpensive and fast experiments. Avoid the status quo, and internal and external dogmas. Try new, crazy ideas and see what sticks.

The only way you will know if your new ideas will work, is to test them in the real world. You cannot just develop new ideas in a vacuum (i.e., your office) and think they will work. Why risk everything by launching a new idea nationally before testing it in a small region. Balance risk and reward. Go slow to go fast.
You probably don’t know your customers as much as you think. The only way to know what customers value is test in the real world. Test those new ideas; learn, fail, adapt, and try again. There is a reason pencils have erasers.

Maneuver

Business needs to take best practices from multiple sources. A great place to start is the military. The basic tenets of business were derived from military strategy. A powerful military theory that has been used successfully within business, is maneuver warfare.

Maneuver warfare is based on speed, surprise, and deception. It is about gaining advantageous positions against your competitors. It is about moving faster than your competitor. The higher speed (and tempo) causes you to surprise your competitors and keep them guessing and confused (deception). Maneuver warfare is about using orthodox and unorthodox methods to create confusion.

Most business practitioners use a form of attrition warfare; head-to-head battle to destroy the enemy. Think about Ford vs. GM, Coke vs. Pepsi, Honda vs. Yamaha, or McDonalds vs. Burger King. They solely focused on one another and often ignored the customer. The more they battled, the more they became the same. These battles wasted resources and stifled creativity. Maneuver warfare is about avoiding head-to-head battles, and win by attacking weaknesses.

Think about how Walmart avoided head-to-head battles with the retail incumbents (Sears Roebuck, K-Mart, Woolworths, etc.). Walmart focused on rural markets where they developed their strengths (incredible distribution network, strong partners, etc.). Once Walmart was ready to compete against the industry incumbents, they emerged like the Mongol hordes attacking cities. The incumbents did not see Walmart coming and did not have the business models to compete. They were too busy concentrating on one another and unwilling to change. They never saw the change that was on the horizon. Arrogance resulted in most of these legendary companies being destroyed.

Another key tenet of maneuver warfare is the notion of combined arms. Combined arms are about integrating all areas of the business to support and compliment one another. It is about ensuring that everyone is working towards the same goals. Is marketing supporting sales? Is marketing supporting the corporate identity? Do customer service reps understand the positioning of new products and are able to explain those key areas to consumers?

And combined arms are not just about support. It is about using all areas to simultaneously attack and weaken competitors. For example, you focus on a single region and stagger a continuous cycle of marketing, sales, and service activities to capture local market share and drive increased sales. You quickly learn and communicate to the entire team what is working and what to avoid. Then, you launch a similar chain of events in another markets, in a never-ending cycle of attacks (hit and runs). Your competitors will get demoralized, not understanding how you can keep up such an attack in multiple areas, and try and compete as you keep moving and changing and evolving. They will be caught in a never-ending game of catch-up while you keep learning and evolving.

Adopting principles of maneuver warfare will move you beyond the traditional business of competing head-to-head in a no-win situation. Focus on identifying competitor weaknesses and things consumers value (and are not currently being provided). Then move quickly to attack the weaknesses by providing continuous value to your consumers so competitors cannot catch-up.

Study History

Another important place to learn what to do and what not to do, is studying history. Learning from history will provide you with new ways to think, and avoid mindlessly following competitors. You should make a habit to study your industry and business in general. Understand how organizations survived crisis and became stronger. Most importantly, study your organization’s history.

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What worked in the past that you don’t do anymore? What failed in the past and understand why? Can you try it again but differently, or should you ensure you do not repeat the same mistakes? The best way to avoid making mistakes is to study the past. And a great way to learn new ways of doing business is to learn from what others have done in similar circumstances.

The world is a constant cycle. Go back and see what happened in past economic downturns and note how consumer habits changed. What industries recovered the quickest or slowest, and why? Keep learning to develop new ways to move forward and succeed. This takes a lot of work, but success does not come to the lazy. But as you find new ways to conduct business, you will be creating further differentiation from your competitors. As you think differently, you will act differently.

Second -Order Thinking

Noted investor Howard Marks. Marks notes the difference between first-order thinking and second-order thinking. First-order thinking is the process of considering the intended and perhaps obvious implications of a business decision or policy change. It is looking at things simplistically, at the surface level. Focusing on the tip of the iceberg and not going below the water line to understand the entire structure.
Second-order thinking is about going deeper, below the surface. It is about understanding the impacts of the first-order thinking. Second-order thinkers are skeptical about what they hear, and ask lots of questions and put in the work to uncover the truths. Second-order thinking takes a lot of work but the results are often worth the effort.

Second-order thinking is important in business. Too often people just focus on the obvious, not taking the next steps to understand things fully. For example, when comparing and analyzing the competitive market a first-order product manager focuses on the obvious. He compares pricing, product specifications, and length of warranty when developing a new product.
In contrast, a product manager who uses second-order thinking, studies the pricing, specifications, and warranty lengths. But she also visits retailers, talks to customers, tries the competitor products, and studies the competitor’s annual reports. She develops a strong sense of the total environment to develop a product that provides multiple levels of value; creating a higher probability of success.

Conclusion

Too many organizations just follow the herd. One company makes slick videos, then everyone makes slick videos. Home delivery is offered, then everyone starts offering home delivery. Warranties are lengthened, then everyone develops extended warranties. Following what your competitors do is lazy.

Today more than ever you need to stand out from the crowd. You need to develop new creative ideas to engage with consumers and provide increasing amounts of value. You must understand what your customers value and develop new ways to deliver what they desire. Thinking and acting like a contrarian takes a lot of work, especially if you want to succeed. Just thinking or acting differently is easy. Thinking and acting differently to win, takes a lot of hard effort.

Successful business is about hard work and creativity. It is not about just matching what your competitors do. Being a true contrarian is about studying your market and developing new ways to completely avoid your competitors. Avoid competing head-on. Find your competitor’s weaknesses and attack those areas. Create a legal monopoly by developing ever-increasing levels of value that customers love.

As Warren Buffet noted, “build a wide moat full of piranhas and crocodiles” – make it extremely difficult for your competitors to compete. It’s time to rethink how you think. It’s time to rethink how you conduct business. It is time to think differently and become a true contrarian. The world has rapidly changed since COVID-19. This is the time to prepare for what happens after restrictions are lifted. Create loyal customers, so when the economy turns around, your customers remember you and ignore your competitors. Become a true contrarian.