Getting unstuck in the middle

This is the first in a short series on moving your service business up-market through marketing strategy.

If the Ever Given container ship fiasco taught us anything, it’s that getting stuck is a lot easier than getting unstuck.

One theory on what made dislodging it so difficult blames its “bulbous bow”—the bow protrusion just below the water line. Because it jutted out from the rest of the ship, it became stuck in the sand, surrounded by intense pressure on all sides.

According to the theory, the Ever Given put itself into “a gigantic finger trap toy.” Any movement of the ship would lead to the sand “essentially clamping down harder on the bulbous bow.”

Isn’t it true that, sometimes, the more we try to back away, the more difficult it becomes?

In our business, we can start to feel like the secret to alleviating our entrepreneurial stress is to back away, and to work “on our business instead of in it,” as the saying goes.

But for many business owners, every time they step away, they get pulled back in.

Clients negotiate their prices down so they can’t delegate or outsource. They want to hire but they don’t have the capacity to find and train great people. Or sales simply stall and they feel like they need to get more involved to get the proverbial ship moving again.

They want to back away and gain some breathing room, but they don’t have enough margin in their business to make it work for very long.

In essence, they feel stuck.

The strategy industry’s term for it, as coined by Michael E. Porter, is being “stuck in the middle.”

We struggle with delegation because we struggle with profit margin. And as Porter says, we struggle with profit margin because “a firm that is stuck in the middle will compete at a disadvantage because the cost leader, differentiators, or focusers, will be better positioned to compete in any segment.”

The lowest cost provider has better scale, so to keep up with them on price we have to sacrifice our margin. And because we’re not differentiated or focused, we have to spend more and more on sales and marketing to attract new business, driving up our costs and taking up all our time.

And all of that requires us to stay in the business, running the show, selling the work and hustling, just to keep it going.

But though we may feel stuck, we do have options.

The answer to reducing that stress isn’t always to pull back, leaving the decisions to someone else. The answer may not be to step away.

Like a finger trap toy, sometimes the right way out is by stepping back in.

Take a moment to remember the “Job to Be Done” that you started the business in the first place to accomplish. What was the problem you were trying to solve? What was the struggle your clients faced, and how were you especially well-suited to help them overcome it?

And then determine whether you’re currently doing that job in the most effective and efficient way, or simply the way everyone else does it. Do you still have a unique approach to how you accomplish that job for your customers, or are you following the industry scripts?

As Roger Martin warned in Playing to Win, there are only two ways to profit—becoming the biggest and cheapest and making it up on volume, or setting yourself apart from the pack by differentiating.

A profitable business can’t look, run, and feel like everyone else’s. It can’t operate in the identical ways. That only wins us the race to the middle.

Instead, we need to have a clear, reinforceable market position that sets us apart. We need to have a specific customer set we’re best suited to help. And we need a unique approach to how we do our work that works especially well for those best customers.

Are we over-committed to benchmarks and copying from the leaders, or are we carving out our own path?

Does our marketing and advertising reinforce a unique position, or does it blend in with everyone else?

Are all of those dashboards and tools we got sold directly contributing to the growth of our business, or are they just growing our stress?

And do those extra services we added to our offering actually gain us profitable work, or are they only there to keep up with our competition?

The pioneers of the concept of marketing positions warned against the “Forgot What Made Them Successful Trap”. As our business grows, we can make it less distinctive, less us, less focused on what it does best.

And we can drift toward the average—in both services and price.

We work hard to build our business, and then we work hard to get out of it, which pulls us right back in.

But being “in” your business is a lot more fun when you feel like you’re leading it instead of being dragged along.

A distinctive, well-positioned business can build margin. And with margin, you can make better decisions, you can be choiceful about the work you take on, and you can grow toward selling, delegating, or stepping away from your business—if you want to.

But a business that does something unique and valuable—and markets that position effectively—can choose its customers. It can choose its projects. It can choose its path forward, over obstacles and toward goals.

It can be fun.

So it’s always possible that, when your business is doing great work for great clients for great prices, you may want to spend more time “in” it anyway.

But as Clayton Christensen wrote, “In practice, it is a company’s customers who effectively control what it can and cannot do.”

So in the next post in this series, we’ll talk about the decisions you can make to build profit in your business without losing business.