Creating a sustainable Competitive Advantage used to be the Holy Grail sought by businesses for years.
Until recently, once you had worked out both what set your business apart in your industry and what you could deliver better than anyone else, you were almost guaranteed years of success. Westpac Bank opened its doors in 1817, ANZ Bank in 1835; BHP in 1885 or AGL in 1841.
Their stories are one of competitive advantage – and other support of course!
The 21st century is certainly a little different. Competitors are able to copy products or services far faster and easier than ever before. As of course, can you.
Technology is much more than a disruptor.
Today’s technology driven market; easy access to information, product makeup and service standards are no longer as safe and secure as previously.
Hacking is a new risk which computer youngsters see as fun and entertaining with no regard for its consequences.
The consequences of hacking was apparent during the 2016 Australian Census where hacking of the federal government and IBM IT systems brought the entire Census service to a standstill. Many weeks later the service still did not work well.
Their credibility remains in pieces, though they claim 96% of the population have completed their census input.
Their purpose – to deliver accurate statistics for a plethora of government and life decisions – has been destroyed for at least 4 years until the next census. And what then? What about trend assessments for the next 10 years?
Whilst hacking often causes major disruption as systems go down, its actual intent is often seeking competitor intelligence or intellectual property (IP).
What about technology disruptions which come from outside traditional ‘industry’ parameters? Uber, UBank and Air Bnb are prime examples of companies who have used technology to effectively disrupt their industries. Their recent court case results show they are challenging the legal system too.
What makes Competitive Advantage sustainable?
So creating and maintaining a sustainable Competitive Advantage is pretty difficult now. Some even say impossible.
As the rate of change is predicted to accelerate, the definition of ‘sustainable’ as a timeframe is certainly much more elusive.
Professor Rita Gunther McGrath, of Columbia Business School in New York, is a well-known specialist on strategy.
She believes agile strategic thinking is what is critical to create a temporary competitive advantage. And this seems to be the best you can hope for.
She likens creating a competitive advantage to surfing a wave – you see a wave, choose it, set the board right, paddle and then fall off! You have a choice – either find yourself paddling back to shore, or doing what great surfers do – get back on that board and try a different wave.
This is true of great companies who have surfed the waves of innovation through decades. They move from wave to wave of competitive advantage. They try not to stay with one wave for too long as it becomes exhausted. They are always consciously looking for the next wave.
As we consider our businesses, and plan to experience our traditional strategic planning workshops – we have to ask ourselves:
Are we planning on repeating what we have always done and hoping for a different result?
Are we going to conduct our strategic review differently so you and your senior managers can access the insights in your business to create your flexible competitive advantage?
What are you doing about sustaining your competitive advantage this year?
Let us know with your comments below.
Barbara Craven, Change Psychologist and Strategic Advisor from Change Insights, a boutique change agency specializing in supporting leaders to change their organizations during turbulent times.
Rita Gunther McGrath: The End of Competitive Advantage: How to Keep Your Strategy Moving as Fast as Your Business