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While focusing on competitors may provide some short-term growth, I contend that a better growth strategy is to focus on how you could make the pie bigger.

When consulting with business owners, I'm often asked if I have any new ideas for helping them grow their business. Upon reviewing their current strategies for growth, I notice that they have gathered a lot of information and done a lot of analysis on their competitors. The problem with only focusing on beating competitors is that if you're successful, you'll only end up with a bigger piece of the same size pie. Today's marketplace is littered with companies who have won the battle against a competitor only to lose the war with end-use customers. While focusing on competitors may provide some short-term growth, I contend that a better growth strategy is to focus on how you could make the pie bigger. A few years ago, I came across such an idea that has really paid dividends for the companies that have included it in their growth strategy.

So what's this great idea? Complementors. What's a complementor? A complementor is defined as a company that produces a product/service that, when matched with your product/service, increases the value of your product/service to an end-user. The idea of identifying complementors was originally proposed in the book Co-opetition, written by Adam Brandenburger (Harvard Business School) and Barry Nalebuff (Yale School of Management) in 1996. A classic example of identifying and using complementors to grow a business can be found in why automobile manufacturers such as GM and Ford got into the financing business. Better and cheaper access to credit enables people to buy more cars. Microsoft and Intel are also examples of complementors. You can't build sophisticated software without the microprocessor power to run it and what good is microprocessor power without the sophisticated software programs that utilize it? Notice that complementors are always reciprocal, win-win, value-adding relationships. Does this explain why tire manufacturer Michelin is in the business of producing travel guides? And the booming iPod accessory industry?

As an added bonus, there are two other areas where the identification of complementors can benefit your business - on the supply side and in the merger/acquisition arena. The business landscape is littered with many unsuccessful mergers caused by the inability to integrate complimentary relationships. Despite the many benefits of a growth strategy that identifies and utilizes complementors, the failure to recognize a complementor could be harmful to your business. Take the case of the Sony Betamax videocassette recorder. Though many thought it was a better technology than VHS, Sony's failure to convince Hollywood of this and the resultant lack of rental movies in the Betamax format ultimately doomed the technology in 2002.

As proof that the idea of complementors has survived the test of time, the September 2006 issue of the Harvard Business Review contains the article With Friends Like These: The Art of Managing Complementors. I would encourage you to consider incorporating the idea of complementors in your next business strategy session. The new economy is offering many opportunities to grow your business by making the pie bigger.

Bob Jewell is the founder and Chief Excellence Officer of the Omega Leadership Group in West Chester, Ohio. Bob's mission in work and life is to teach and inspire a passion for excellence. He helps clients improve the leadership skills of their managers, successfully manage projects and develop effective growth strategies.

© 2006 Omega Leadership Group - All rights reserved.

OMEGA founder and CEO (Chief Excellence Officer) Bob Jewell has more than 17 years of experience at the executive level as a practicing manager, coach, and leader. His responsibilities have included engineering, operations, and business development. Bob's extensive real-world experiences combined with his strong communication, facilitation, and presentation skills create a dynamic and enjoyable learning environment. Bob also is a popular presenter with executive education programs at the University of Kentucky, Kent State University, and The Ohio State University, as well as guest instructor with Xavier University's MBA Program.
Bob has an Engineering Degree from The Ohio State University

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