One of greatest Union generals in the U.S. Civil war, William Tecumseh Sherman, described the goal of effective military strategy as maneuvering so that the opposing general finds himself “on the horns of dilemma.”
That means you should force your competitor to choose to defend target A by sacrificing target B or vice-versa.
General Sherman applied this strategy repeatedly throughout the Carolinas and Georgia between 1864 and 1865. He would separate his troops into two or more distant columns. Each would threaten a different target. This prevented his opponents from concentrating their forces against him. By forcing his opponents to break up and defend multiple apparent targets, his opponents found they lacked the mass to defend any.
While Ajit Prabhu, the co-founder and chief executive officer of QuEST Global, and his team may not liken their strategy to this pattern, they have brilliantly implemented this ancient principle in what they call the “global-local model.”
As Ajit describes, “The company came to be this local-global model. It comes from the realization that people don’t become smarter just by getting on a plane.”
By traveling to the United States, as Ajit did, an Indian engineer can earn many times what he would earn by doing the same work in his home country. Why does he earn more? Because he is local and this gives him certain advantages.
For example, it allows him to have face-to-face contact with his clients, which lowers the risk of miscommunication. It also allows him to collaborate more efficiently with the clients’ engineers, and this close proximity helps him understand the cultural context for the work.
While clients should pay for this additional value, Ajit didn’t think they should pay more for the engineer’s brains. So QuEST’s model is designed to optimize the workload by providing the collaborative client-facing work locally, and then producing the problem-solving abroad. This approach seems simple, but it cuts against the norms QuEST’s competitors have settled on.
Most of its peers either conceive themselves as local, high-value engineering firms or as low-cost outsourcing firms. While their web sites may tout otherwise, a dissection of their organizational and incentive structure clearly places them as either local or global, but not both.
QuEST, by contrast, conceived itself from the beginning as being not an Indian firm, nor a U.S. firm, but both.
“You have to find a global optimum. That’s not in one location,” says Ajit.
More importantly, QuEST’s management has designed its entire business around this unique conception. As a result, they have strung together a sequence of interlocking decisions in such a way that competitors cannot easily copy just one of them. Consider just a few of QuEST’s strategic decisions:
Sure, competitors can copy any one of these. But to do it well, they need to copy all of these and that takes time, money and planning. Ajit and QuEST have created a multi-front attack and competitors cannot compete on the same level without losing the ground they already have.
As Ajit says, “Our strategy is something that is easy for others to understand, but hard for someone to duplicate.”
Ask yourself the questions below to see how you can beat your competition by provide some services at reduced costs without hurting client relationships.
1. Is there a service or product that can be completed or purchased for less money?
2. Are there distributors that I haven’t considered?
3. Can I cut deeper into the supply chain to get better prices?
4. Can a select few “face” people handle the client relationships while the “hidden” majority completes the work?