How Accumulative Advantage is the Answer to your Business
You may or may not be familiar with the term accumulative advantage. Yet, the concept may be tied to being the answer to your business surviving and thriving, and is especially important when we're all being squeezed from every direction during the crisis. The term was coined in the 1960s by sociologist Robert Merton who illustrated that selected renowned scientists overall get the most credit for a group’s discovery.
In recent years, the term was popularized by Malcolm Gladwell in his book, Outliers. He wrote “It is those who are successful, in other words, who are most likely to be given the kinds of special opportunities that lead to further success. It’s the best students who get the best teaching and the most attention. And it’s the biggest nine/ten-year-olds who get the most coaching and practice. Success is the result of what sociologists like to call “accumulative advantage”
Think of the concept as a snowball effect where it begins small and once it accumulates it becomes greater and greater as time passes. Accumulative advantage is exactly how it sounds, what begins as a small advantage gets bigger over time and begets even more advantages.
In a business where competition is present in many aspects, every little advantage you possess in those areas is what earns rewards and produces further success. Better pricing strategies lead to increased sales, more efficient work processes lead to optimal productivity, etc. Let’s take a look at other examples of how accumulative advantage lets you stay on top of the market.
Recruiting the right candidate
At the forefront, all businesses compete to hire and recruit the best candidates. In a pool of 20 or 200 potential new hires, they each have the same chance of being chosen – but the candidate with a slight advantage from the rest is selected for the job.
Recruiters often ask the questions “Who is the right person for the job?” “What skills do they have that sets them apart from others?” and “How would they fit in with the company?” When your business selects the best candidate most fit for the role, it creates better opportunities for the team. Over time, you’ll have good ROI, improved capabilities, and increased productivity.
Take the Ordo and AccountingWEB survey on recruiting trends, designed by leader in the business market, Cranfield business school; and check out the report once it's published by AccountingWEB and Ordo for the insights Cranfield find. Put yourself ahead by making sure you have the latest intel.
Partnering with the best client
There may be numerous clients worth partnering with, but with the multitude of competitors pursuing the same talent, it’s important to have a competitive advantage. A 1% edge to offer to your clients is what ultimately leads them to partner with you.
Partnerships are important to have because they grow customer base and improve business performance. Working to build strong client relationships takes time – and it’s worth investing in to earn bigger and better rewards. Whether it’s through added projects, referrals, or reputation, being the partner of choice brings many advantages.
Employing the best business practices
What are your everyday business practices that get you ahead of competitors? By utilizing good team strategies that maximize productivity while maintaining cost effectiveness, your business can set you apart from competitors. It could come in the form of using effective communication platforms, customer management tools, or smarter payment applications.
Investing in the right tools and technology like Ordo is the slight edge you can act on. It’s a cost-effective payment method that saves on additional fees and time. With automatic reconciliation of payments and instant money transfer – your business can improve on cash flow without the hassle of delayed payment.
It all boils down to this: The Winner-Takes-All Effect
The concept of accumulative advantage is very straightforward. You only need a slight advantage or a 1% edge against others to gain the best results. Create your own accumulative advantage by consistently working to improve by just 1% each day. Be more conscious about the business decisions you make – whether it’s recruiting the right candidate, partnering with the best clients, or utilising the most efficient business practices – it’s the small efforts that return big rewards. Try Ordo for free today, it’s a 1% advantage that is totally within your control.
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