With 2014 in full swing, you have probably already made some predictions about your competitors' business moves this year. As a leader, it's part of your job to look into your crystal ball and make some decisions based on information about trends, technology, and other influencers in your market.
But new-year predictions can be extremely damaging when they prove to be wrong. Leonard Fuld, founder and president of global consultancy Fuld & Company, writes in the Harvard Business Review about four common pitfalls he urges leaders to avoid when anticipating a rival's moves in the months ahead.
Below, read Fuld's advice on which types of predictions are the wrong ones to focus on this January.
1. Don't obsess over market leaders.
As a small business, it is natural to fear the giants. But Fuld says this is a waste of time. He writes that Samsung buys components for its products, from smartphones to industrial machines, from smaller companies. If you run one of these companies, he writes, you shouldn't worry about whether Samsung will enter your industry and make you obsolete--if that happens, there's nothing you can do. Instead, he says, "you need to ask yourself if they are even worth watching at all when you could be watching much more relevant competitors and potential competitors."
2. Don't focus only on federal regulations.
You need to watch for changes in federal regulations, but as a small company you need to watch local regulations and changes more closely. Fuld cites the recent tax on Internet sales in 16 U.S. states as a prime example. "When you watch regulations in your market remember to think local--in all geographies around the world. Far too often companies watch regulation on a national basis in their countries of operation, missing small regulatory changes occurring in a province or state," he writes. "Those regional laws can suddenly catch fire and become national or even international law, to the advantage of companies that have been paying close attention and preparing."
3. Don't focus on new products.
Fuld says not to bother to try to predict the next big product your competitor is developing. Instead, he advises focusing on market solutions. "An exciting new product can get a lot of media attention, but services are often what really sell customers on a product--more than the product itself," he writes. "When we've constructed strategy maps on Apple, comparing it to Dell, Apple's retail service offering starkly distinguishes it--in particular, its Genius Bar. Just ask members of my family who love their Apples. A lot of their 'love' has to do with how convenient it is to have a Genius Bar nearby where trained staff can diagnose a problem in person and offer a solution."
4. Don't assume a good economy will help everyone.
The economy does not necessarily affect every business in the same way. A bad economy is bad for homebuilders, for example, but may be great for demolition crews. "Many executives fail to consider how economic changes might affect their rivals unevenly," Fuld writes. "In a growing economy, a rising tide may lift all boats--but it doesn't determine the direction in which each might be steered. Similarly, receding waters could uncover various opportunities that were previously invisible for some of your competitors and that remain inaccessible to others--but perhaps not to you."