Why being unpredictable is a bad strategy

by Mark Chussil

January 9, 2017 | 10:23 am
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My clients and students assume that competitors should surprise one another with their strategies. Your competitors, they think, should have no idea what you’re going to do. I predict many of you will say: “Of course. Being unpredictable is a competitive advantage.”

Not so fast.

Keeping secrets can protect competitive advantage. Imagine the D-Day invasion of Normandy if the Allies had announced dates and locations. Ask Coca-Cola for its secret recipe and listen to a whole corporation laugh.

But secrecy is not the same thing as unpredictability. Secrecy creates an incentive to invest in assets, especially intellectual ones. Unpredictability bluffs, postures and palters to gain advantage through uncertainty and misdirection. Unpredictability can put another party off-balance. It can confuse them, cloud their thinking, cause them to waste time and effort, and trick them into making a mistake.

There are times when, at least in theory, the potential benefits of unpredictability can exceed its costs. But in my experience with competitive strategy in the real world, they aren’t common.

Unpredictability in competitive strategy is expensive. You don’t build a fake factory or release a fake product. You don’t suddenly pop out of one market and pop into another. (Guess what your shareholders would say.) Moreover, you don’t implement competitive strategy behind closed doors. Behaving unpredictably with one group — customers, employees, competitors, suppliers, etc. — means exposing your unpredictability to all. That doesn’t build trust.

Some people think unpredictability works in competitive strategy. I’ve seen it in my Top Pricer Tournament, a simulation I’ve run with over 1,000 people that allows participants to try different pricing strategies in three generic industries. In the tournament, participants who selected “be unpredictable” as their pricing strategy caused their prices to randomly rise, hold or fall in each simulated quarter.

“Be unpredictable” clearly underperformed other tournament strategies. It also had a broader range of results in millions of what-if scenarios. Occasionally, unpredictability led to joy, but usually it led to woe.

But why did unpredictability underperform? Because becoming unpredictable required abandoning a major opportunity: the opportunity to lead.

I don’t mean “lead” in the follow-me sense, especially because I doubt many people would flock to a leadership message of “Keep ‘Em Guessing!”

Rather, I mean “lead” in the sense of shaping events, of taking initiative, of showing commitment. You lead by influencing others, even, maybe especially, if they are not your friends. You may lead well or you may lead badly, but unpredictability does not lead at all.

Leadership lets you choose the game to play and shape how you play it. If you don’t, someone else will.

by Mark Chussil

January 9, 2017 | 10:23 am
  |     |     |   Start Conversation

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