Every organization needs to establish optimal distinctiveness – a competitive position within your field, where you are similar enough to other organizations to be seen as legitimate, but different enough that you’re seen as having something unique to offer. But, optimal distinctiveness is more than being in a competitive place in your field.
Optimal distinctiveness means having a competitive position of similarity and difference that is anchored in the organization’s identity.
While optimal distinctiveness depends on knowing of your competition, it also depends on knowing your organization and what’s built in to who you are. When an organization can link its competitive positioning in the marketplace to the very features that define the organization for its members, its claims to distinctiveness are authentic.
Establishing Optimal Distinctiveness: Positioning plus Anchoring
Establishing optimal distinctiveness requires your organization to work in two directions. You must:
1. Position your organization in the marketplace
by comparing your organization to other organizations to see where you stand out, and then matching this to customer needs
2. Anchor your organizations position in your organization’s identity,
by recognizing and understanding unique characteristics that are indigenous to the organization itself, and linking these to claims of distinctiveness
Positioning: Your Place vs. Your Competition
Most people assume that you can find optimal distinctiveness simply through the process of positioning. Positioning is a marketing activity where you orchestrate perceptions of what your organization has to offer so that you occupy a valued place in the customer’s mind relative to competitive offerings. A product, service or organization can be positioned on the basis of an attribute or benefit, a user niche, class, price, quality, purpose, etc.
Positioning traditionally focuses on finding an attractive place in a competitive field. We consider what other organizations offer and what customers & clients want, and use this external information to find a definition or image for our organization that is attractive, competitive, and unique. We aim to be the one and only organization able to offer what we offer.
Positioning is not enough for optimal distinctiveness, though, because an organization needs to be able to substantiate its claims to be unique. The organization has to be able to explain where its uniqueness comes from and demonstrate that this uniqueness has a sustainable source in the organization’s core character. It has to anchor its claims in real features of the organization.
Anchoring: Grounding Optimal Distinctiveness in Organizational Identity
“Who you are” as an organization is your organizational identity. Organizational identity is the set of core, enduring and distinct attributes that define an organization for its members. The ‘core’ and ‘enduring’ elements refer to the idea that these attributes are foundational to the organization and more important than other attributes. The ‘distinctive’ element refers to the idea that this set of attributes defines one and only one organization.
To anchor any claims to be distinctive, an organization has to look deeper into itself to answer the question:
“What is indigenous to this organization that explains what we do, what we value, and what our goals are?”
These indigenous features could appear in the organization’s past, in its history, the founders’ personalities, mythical stories, and narratives. These features can appear in the present as organizational practices, routines, and capabilities, and as the organization’s perception of its best collective self. And, these features can appear in the future, in the form of the organization’s vision or aspirational ideal self.
When an organization is able to anchor its claims to be one way or another in actual features of its organizational identity, it demonstrates to its stakeholders that these claims are authentic—they have an actual source in the organization. They aren’t made up, or invented just so that the organization looks good. They are real. Anchoring claims of distinctiveness to the organization’s identity also demonstrates that this distinctiveness is sustainable. The organization controls the source of this distinctiveness and can continue to produce the same distinctiveness over and over.
Navel-gazing vs. Anchoring
Many managers think that crafting their organization’s market position is all they need to do to set their organization apart from others, to be distinctive, and to be competitive. Managers feel reasonably comfortable spending time on positioning, since everyone knows that marketing is important.
However, many managers think that focusing internally, on the organization’s indigenous characteristics, is not worth their time. It’s too touchy-feely, too much ‘navel gazing’, too much reflection.
What these managers fail to understand is that positioning an organization without anchoring that position in the organization’s actual identity ends up creating a façade—and an untrustworthy one at that.
A distinctive, competitive position in the marketplace is only “optimal” if it is authentic. To establish optimal distinctiveness, the organization’s market position must must be anchored in the organization’s core, enduring and distinctive identity.
By anchoring your organization’s position in the the marketplace in your organization’s identity, you establish an optimal distinctiveness that allows your organization to adapt to its different competitive contexts while upholding, confirming and sustaining who it is and what really makes it powerful.
See also: Can an organization be too different?: The Strategic Value of Optimal Distinctiveness
Images from Flickr: Dandelion collage from robynejay Dandelion from Anja Jonsson
I am an organizational consultant, change advocate, and organizational identity/reputation scholar with a PhD in leadership & organizations. I research, write about, and consult with organizations on the relationships between organizational identity, actions, and purpose. I teach Technology Management, part-time, at Stevens Institute of Technology.
My current research focuses on how social technologies in the workplace can drive organizational change, generate meaning, and catalyze purpose. See the 
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Well said. One of the fist steps that companies have to go through in order to line up their competitive strategy with their real identity is to come to agreement as to what that is, and to come to agreement as to what makes it distinct. This requires a large share of openness and communication.
Thanks Phil- figuring out what is really ‘core’ to the organization does require both extensive communication and openness. There’s a large literature on just what constitutes identity, how we assess it, who needs to agree, and whose definition matters — and underneath this all, a recognition that it’s better to have a rough understanding than to avoid the conversations because they are hard. Having conversations about identity not only triggers sensemaking (i.e., asks us to make sense of a lot of organizational phenomena) but also brings people together. cv
Fantastic. Positioning is hollow without the anchoring but too many companies stop once they have the marketing portion done. The magic happens when you hit the optimal distinctiveness.
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