I have talked before about the loneliness of the leader. You feel it most strongly when things are going badly.
The entrepreneur, in particular, owns the company and carries the ultimate responsibility. I am reminded of ship captains in the age of sail. They were responsible for getting their passengers and cargo safely to the destination while dealing with terrible weather and even worse pirates.
The modern company captain faces different dangers, but the responsibility is just as real. People's livelihoods depend on the decisions we make. Get things badly wrong and we can bankrupt the company or become vulnerable to a takeover that destroys what we have built.
When a powerful competitor appears, though, there is another way to look at the situation.
That rival may actually become one of the leader's most useful tools.
Why can a strong competitor actually help a leader?
A powerful external competitor can give the team a common enemy, creating greater unity, urgency and commitment around winning in the marketplace. Instead of allowing the rival to generate fear, the leader can use the competitive threat as a rallying cry.
This becomes particularly important when industries are disrupted.
The Covid years damaged long-established companies across sectors affected by lockdowns, government restrictions, declining customer demand and supply-chain problems. M&A activity followed and, in many cases, the strong devoured the weak.
Perhaps your company survived.
Great.
But now you may be facing larger, better-funded competitors with greater resources.
That can be terrifying.
Or it can provide the team with a clear external challenge around which everyone can unite.
The leader's job is to convert anxiety into purposeful action.
Do now: When a powerful competitor appears, don't communicate only the danger. Frame the challenge around what the team can collectively do to win.
Why are internal enemies so destructive to organisations?
Competition should be directed outside the company rather than between divisions, departments or ambitious individuals inside it. Internal rivalry consumes energy that should be directed toward winning customers and beating genuine competitors.
I have experienced this myself.
In big organisations, ambitious people sometimes eye your patch and decide they should be running it instead of you.
Before you know it, the elbows come out.
Political alliances form. People start protecting territory. Information gets withheld. The other division gradually becomes "the enemy".
This is madness.
The customer doesn't care about your internal politics. Neither does your external competitor.
While everyone inside the organisation is busy fighting over the main deck, the real pirates may be pulling alongside the ship.
Well-run companies squash destructive internal rivalry before it develops momentum.
Do now: Make it absolutely clear that the competitor is outside the organisation. Internal functions may disagree, but they should ultimately be fighting on the same side.
How should smaller companies respond to powerful competitors?
Smaller companies should resist trying to match larger rivals dollar-for-dollar or entering destructive price wars; they need to compete through differentiated value.
When a powerful competitor starts flooding the market with advertising, smaller companies can feel helpless.
Usually, we don't have unlimited financial reserves. Trying to match their advertising spend may simply burn through the cash we need elsewhere.
Price wars are equally dangerous.
They are a race to the bottom, and the bigger rival may have enough financial muscle to absorb the pain much longer than we can.
So don't fight exclusively on their terms.
Instead, ask how you can strengthen the value offering.
Perhaps the product line-up needs changing. Maybe the packaging of the offer needs adjusting. Perhaps customers need a clearer reason to choose you rather than the larger competitor.
Differentiation becomes the battlefield.
Do now: Instead of asking how you can match a larger competitor's spending or pricing, identify where your value proposition can become meaningfully different and stronger.
How can leaders persuade teams to accept competitive change?
Leaders can use the external competitive threat to explain why change is necessary, but they must create urgency without generating panic.
This is a delicate balancing act.
As with many things in Japan, adjusting to change isn't necessarily the strongest suit of every team. People may prefer the familiar processes, products and methods that have worked until now.
But tough times demand tough changes.
The external competitor can help the leader make the case.
"We aren't changing this because management suddenly became bored with the existing system. We are changing because the market has changed, our competitors have changed and we need to become stronger."
People generally don't enjoy the idea of being beaten by a rival.
Use that competitive pride.
The key is ensuring the message generates determination rather than fear.
Do now: Connect proposed changes directly to the competitive reality and show the team how those changes improve their ability to win.
Why is the organisation's WHY critical during competitive pressure?
A strong WHY gives employees a reason to believe in what they are defending and provides a North Star when competitive pressure creates uncertainty.
Leaders shouldn't rely solely on fear of the competitor.
We also need to remind people why our own organisation deserves to win.
What are we doing for customers?
Why does it matter?
What do we believe we do better?
Why should customers continue choosing us?
This is an incredibly important component of culture building.
If employees genuinely believe our WHY is stronger than the rival's, they gain confidence in what they are doing.
Customers notice that confidence.
They also notice its absence.
Fearful salespeople, in particular, can be smelt by buyers. Customers sense desperation and start wondering whether the company is stable.
That can turn fear into a self-fulfilling prophecy.
Do now: Keep returning the team to the WHY. Competitive confidence should come from believing in your own value, not merely disliking the rival.
How much bad news should leaders share with their teams?
Leaders need to communicate enough competitive danger to create urgency without spreading so much gloom that people lose confidence and give up. Increasing the intensity gradually is often safer than hitting everyone with a Big Bang of fear.
This is a tricky calculation.
The leader may know much more about the seriousness of the situation than everyone else.
Do we tell them everything?
Too much gloom can paralyse people.
Too little information means there is no urgency. Everyone continues operating exactly as before while the competitive threat grows stronger.
The better approach may be a gradual ramping up of the concern factor.
Explain the challenge.
Show the evidence.
Explain what needs to change.
Give people something practical they can do about it.
As their understanding increases, so can the intensity of the message.
Fear without action produces helplessness.
Urgency combined with direction produces movement.
Do now: Communicate competitive threats progressively and always connect the concern to concrete actions the team can take.
A Common Enemy Can Strengthen The Team
Leadership can be lonely.
When the company is under pressure, the leader may lie awake thinking about competitors, cash flow, customers, market share and the livelihoods of everyone who depends on the business.
There is a temptation to carry all of those fears alone.
But we have teams for a reason.
A powerful competitor doesn't have to be viewed solely as a destructive force sweeping everything before it.
The rival can become an aid to greater teamwork and commitment.
Use the threat carefully.
Don't manufacture fear.
Don't demonise competitors.
Don't push people into panic.
Instead, use the competitive reality to remind everyone that you are on the same side.
Move the enemy outside the organisation.
Strengthen the value proposition rather than automatically cutting prices.
Explain why change is necessary.
Keep returning to the WHY of the organisation.
Build urgency gradually and combine every warning with a clear course of action.
Most importantly, lead with conviction.
The team will be watching the leader very closely. If we communicate fear and desperation, they will absorb it. If we communicate determination, confidence and belief in our ability to succeed, that will spread too.
We don't have to do it all by ourselves.
Our people are there to fight shoulder to shoulder with us.
But the leader has to lead.
Our very essence, our ki, has to communicate the conviction that we are going to succeed.
Author Bio
Dr. Greg Story, Ph.D. in Japanese Decision-Making, is President of Dale Carnegie Tokyo Training and Adjunct Professor at Griffith University. He is a two-time winner of the Dale Carnegie "One Carnegie Award" (2018, 2021) and recipient of the Griffith University Business School Outstanding Alumnus Award (2012). As a Dale Carnegie Master Trainer, Greg is certified to deliver globally across leadership, communication, sales and presentation programmes, including Leadership Training for Results.
He has written several books, including three best-sellers — Japan Business Mastery, Japan Sales Mastery, and Japan Presentations Mastery — along with Japan Leadership Mastery and How to Stop Wasting Money on Training. His works have been translated into Japanese, including Za Eigyō (ザ営業), Purezen no Tatsujin (プレゼンの達人), Torēningu de Okane o Muda ni Suru no wa Yamemashō (トレーニングでお金を無駄にするのはやめましょう), and Gendaiban "Hito o Ugokasu" Rīdā (現代版「人を動かす」リーダー).
Greg also publishes daily business insights on LinkedIn, Facebook and Twitter, and hosts six weekly podcasts. On YouTube, he produces The Cutting Edge Japan Business Show, Japan Business Mastery, and Japan's Top Business Interviews, which are widely followed by executives seeking success strategies in Japan.
