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Competition and Production

Competition and Production

Companies must be both productive and competitive. Production and competition work together. Internal production makes the most of the resources you control. External competition makes the most of your production in the marketplaces that you cannot control. While internal planning requires more planning, external competition requires better decision-making reflexes.

2,500 years ago, Sun Tzu described these two opposite but complementary parts of an organization. The nation, run by the ruler and his administrators, was the productive half. The army, run by a general and his commanders, was its competitive counterpart. Survival depends on both components working together, understanding each other's role, and realize that they each work under very different rules. Managing production is very different than managing competition.

The secret is knowing when to use the methods of production when to use the methods of competition. We go into this in more detail in our training, but the chart below offers a quick summary.

 The Critical Differences

Competition Production
Exploring and experimenting Designing and organizing
External, chaotic environments Internal, controlled environments
People competing People cooperating
Anonymous, unattained resources Known, available resources
Event-based responses Predetermined steps
Factors details into larger picture Breaks processes into finer details
Unique, custom solutions Duplicate, standard products
Adjusts to environment as a whole Controls part of environment
General improvement in position Well-specified end result
   

Productive and competitive methods create the resources for each other in a constant cycle. The better our competitive skills, the more resources we capture to use productively. The better our production, the more resource we produce for use in external competition. Competition and production are closely tied to each other, but they require different skill sets. In the science of strategy, they are defined as "complementary opposites." Both are necessary. They work together. But you must understand how they are different.

The problem in recent decades is that our knowledge of production have greatly overshadowed our competitive perspective and reflexes. Fortunately, there is a growing interest in the types of strategic skills that people need on the front lines of competition. Fortunately, we have the classical strategy of Sun Tzu to guide us in building our competitive perspective and sharpening our decision-making reflexes.

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