Monday, August 26, 2013

Making the Shift from Sustainable to Transient Advantage

Whatever Rita McGrath does is worth your attention.

In her new book, "The End of Competitive Advantage," Columbia Business School professor and Innosight Fellow Rita Gunther McGrath argues that companies need to shift their strategy from long-term to transient edges in the marketplace...
…The Holy Grail of strategy for many years has been defined as sustainable competitive advantage: you find an opportunity, you throw up entry barriers like crazy and then you get to enjoy it for a long period of time. But increasingly, this no longer works well or even makes sense, thanks to globalization, digital disruptions, and so on. So in response to this shift, organizations need to build up temporary or transient advantages where they seize opportunities, exploit them, and then move on quickly when they've exhausted the opportunity…. 
…One result of this shift to transient advantage is that is that innovation becomes more imperative, which means that organizations really do need to make it a routine capability, rather than pursue it in fits and starts. So you need a governance structure. You need a well-thought-out process for getting new ideas into the market quickly. You need a way of making sure that the funds are there in the right way.You need to create the right the incentives. 

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