Monday, June 17, 2013

Transient Advantage
by Rita Gunther McGrath

Training your organization to deal with uncertainty is absolutely critical. Professor McGrath is one of the leaders in this area. I strongly urge you read this article and anything else she publishes. Here is an example of her work on how to assess your company’s readiness:

Monday, June 10, 2013

Organizing for Advantage
Published: May 20, 2013
by Ashok Divakaran, Gary L. Neilson, and Jaya Pandrangi

A MUST read!!!!!

Every company’s situation is unique, and therefore the right design for one company will probably not work for others, even within the same industry. But the symptoms of adhoc organizational design are regrettably common. They include business units and functions that protect their own domain’s priorities to the detriment of the overall business, hoarded or wasted resources, strategic goals without follow-through, and a culture that dismisses or ignores accountability. These problems are not just a matter of personal ill will, incompetence, external pressure, or cultural resistance. They exist because organizational design determines behavior. When a company’s organizational forms are inconsistent with the broader objectives of the business, that misalignment affects the day-to-day actions of individual employees. It leads perfectly competent people to chronically under-perform  Conversely, companies with a strong link between their strategy and their organizational structure can, like an engine firing on thousands of cylinders instead of a few, generate energy and creativity at all levels….
…How do you translate a business strategy into an organizational design? How can you connect the dots between company-wide objectives and the concrete details of reporting relationships, information flows, decision rights, and social networks? The answer is not obvious. Figuring it out requires a new way of thinking about organization: what might be called organizing for essential advantage. “Essential advantage,” in this context, refers to the creation of meaningful, lasting value for customers. Although mission statements and lists of business objectives are plentiful, it’s rare to find a statement that explains precisely how a company creates value. As described in several recent books—notably, The Essential Advantage: How to Win with a Capabilities-Driven Strategy, by Paul Leinwand and Cesare Mainardi (Harvard Business Review Press, 2011)—these statements can be distilled down to two elements: a “way to play” and a system of differentiating capabilities. The way to play is how a company engages with the market, its fundamental value proposition. For example, some companies choose to distinguish themselves as innovators, continually introducing new products and service, whereas others are value providers, offering their products or services at an attractive price point. Capabilities are cross-functional combinations of technology, processes, skills, and mind-sets that work together synergistically. Differentiating capabilities are the few (typically, three to six) capabilities that enable a company to stand out from competitors and consistently provide value for its chosen customers that no one else can match

Monday, June 03, 2013

Transient Advantage
by Rita Gunther McGrath

To order PDF: Source: Harvard Business Review
10 pages. Publication Date: Jun 01, 2013. Prod. #: R1306C-PDF-ENG

This is an incredibly exciting new concept of creating competitive separation in this crazy world we live in. As I always state, anything Rita McGrath does is worth studying....

Strategy is stuck. For too long the business world has been obsessed with the notion of building a sustainable competitive advantage. That idea is at the core of most strategy textbooks; it forms the basis of Warren Buffett’s investment strategy; it’s central to the success of companies on the “most admired” lists. I’m not arguing that it’s a bad idea—obviously, it’s marvelous to compete in a way that others can’t imitate. And even today there are companies that create a strong position and defend it for extended periods of time—firms such as GE, IKEA, Unilever, Tsingtao Brewery, and Swiss Re. But it’s now rare for a company to maintain a truly lasting advantage. Competitors and customers have become too unpredictable, and industries too amorphous The forces at work here are familiar: the digital revolution, a “flat” world, fewer barriers to entry, globalization.
Strategy is still useful in turbulent industries like consumer electronics, fast-moving consumer goods, television, publishing, photography, and...well, you get the idea. Leaders in these businesses can compete effectively—but not by sticking to the same old playbook. In a world where a competitive advantage often evaporates in less than a year, companies can’t afford to spend months at a time crafting a single long-term strategy. To stay ahead, they need to constantly start new strategic initiatives, building and exploiting many transient competitive advantages at once. Though individually temporary, these advantages, as a portfolio, can keep companies in the lead over the long run. Firms that have figured this out—such as Milliken & Company, a U.S.-based textiles and chemicals company; Cognizant, a global IT services company; and Brambles, a logistics company based in Australia—have abandoned the assumption that stability in business is the norm. They don’t even think it should be a goal. Instead, they work to spark continuous change, avoiding dangerous rigidity. They view strategy differently—as more fluid, more customer-centric, less industry-bound. And the ways they formulate it—the lens they use to define the competitive playing field, their methods for evaluating new business opportunities, their approach to innovation—are different as well.
        THE WAVE OF COMPETITIVE ADVANTAGE   Companies in high-velocity industries must learn to cycle rapidly through the stages of competitive   advantage. They also need the capacity to develop and manage a pipeline of initiatives, since many will be short-lived.