When you run a business you are always looking for ways to differentiate from your competition. It can be in small ways or with “Big Ideas”, it can be based on product, service, price or any combination thereof. I recently read an article from Harvard Business review that actually articulated very well the issue of differentiation in a “commoditized” market.
The article was called Hustle as a Strategy and the author was Amar Bhide. It can be purchased from the Harvard Business Review, or you could subscribe for regular copies of their articles.
The article focused in on the Financial Services industry and there a number of remarkable similarities to the staffing industry. Conventional wisdom suggests that industries where there are low barriers to entry, and where competitive advantage can be quickly copied, the returns will be low. Yet, the financial services industry fits these criteria and continually we read about record profits in this industry … go figure! Warren Buffet even agrees with Bhide in describing the sector …”Major sustainable competitive advantages are almost non-existent in the field of financial services”.
Bhide proffers his “hustle as a strategy” theory as a reason why those companies do well, suggesting that companies with superior execution can differentiate and achieve success. Thus the successful “hustler” companies will articulate a clear vision, hire great people, engage their staff in that vision, train them well, establish great process and deliver for their clients.
All of this holds true for the staffing industry too … I have not yet seen superior execution garner better margins in this industry, but if those financial services companies can do it why shouldn’t the staffing industry? The reality is that there is no more important industry today, without the right people no company could be successful … and our core business is finding the right people for our clients.
Got to run … need to go and figure how to raise margins!