Finding The X-Factor For Your Business
The X-Factor is a powerful component of your business strategy.
Essentially, the X-Factor is an exponential advantage you can use in a key area to exploit your advantage in the marketplace and use it to dominate your industry.
It’s the piece of strategy that has powered companies like Starbucks, Netflix, Tesla, ROKU and others. When we work with clients, we make it a top priority over the engagement to locate the X-Factor and put it to work for them. When you can’t establish this differentiating edge in your business, you are in danger of heavy attack. At the same time, when you can locate it and put it to work for you, it’s very deadly and powerful.
Right now, Amazon is crushing the retail sector. What is the X-Factor that is currently allowing them to dominate? The primary guesses might be Prime membership and shipping, AI technology like Alexa, or others. While I don’t pretend to have the insider information to know exactly what it is, I would venture a guess that it is cheap capital. Since 2009, money has been cheap to get. Interest rates have been so low for so long, it has provided unique and once-in-a-lifetime opportunities for those who were both paying attention to take advantage of it and being in the right stage of their growth to really use cheap capital as a business accelerator. Available cash can be key constraint to growth or it can be a deadly weapon. I believe for Amazon and some other tech monsters (the usual suspects) it’s currently a very effective weapon in the marketplace. High growth companies come to realize sooner or later that the growth they are experiencing sucks cash through the company like a prime Hoover vacuum cleaner. Having access to abundant amount of cash, especially at cheap rates, can be very effective growth fuel.
The Container Store is also thriving because its executives discovered their own X-Factor—one that’s altogether different from any others. The Dallas-based chain, which sells items to help people organize their homes and offices, gives its employees 10 times more training than the typical retailer in order to stay ahead of competitors across the country. It currently offers new full-time salespeople a whopping 235 hours of preparation, compared to the 23 hours typical in the retail industry. They made the strategic decision to have their employees the most knowledgeable about every aspect that affects their customers’ lives regarding their needs and how they solve their storage problems.
**Copy Disclaimer: It seems like I am constantly making this disclaimer but you have to. You cannot copy someone else’s X-Factor. It has to be relevant to your business in a strategic way, which has the potential to give you 2X to 10X the advantage in the marketplace. Therefore, it does take some work and serious thinking to discover it.
The Three Basic Growth Constraints To Any Business:
1. The Leadership 2. Systems, Processes & Structures 3. The Market Dynamics
This gives you at least a few clues as to good places to look to start to uncover your X-Factor.
John D. Rockefeller, possibly the most fantastic business moneymaker of all economic times, discovered that his X-Factor in the oil business was in the process of shipping. He made several strategic moves regarding shipping. One of them was in railroad shipping when he decided to purchase the tanker cars needed to ship his product. In another instance, when railroads became an issue for him, he was the first to ship oil by pipeline.
One word of caution. If you do locate your X-Factor for your business, keep it under wraps. Keep it very, very secret. Don’t openly share your secret sauce to growth. Remember, your X-Factor is one of the components, which makes your business very difficult to copy or imitate.
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