Table of Contents Hide
- The Anatomy of a Transient Advantage
- Facing the Brutal Truth
- Seven Dangerous Misconceptions
- Strategy for Transient Advantage: The New Playbook
- 1: Think about arenas, not industries.
- 2: Set broad themes, and then let people experiment.
- 3: Adopt metrics that support entrepreneurial growth.
- 4: Focus on experiences and solutions to problems.
- 5: Build strong relationships and networks.
- 6: Avoid brutal restructuring; learn healthy disengagement.
- 7: Get systematic about early-stage innovation.
- 8: Experiment, iterate, learn.
- Leadership as Orchestration
For decades, the business world has been fixated on achieving sustainable competitive advantage, a position within an industry that allows a company to best its rivals over the long term. Though we can all point to organizations that have succeeded with this approach—think GE and Unilever—in today’s world, the edge of most companies doesn’t last long. The forces at work here are familiar: the digital revolution, disappearing barriers to entry, globalization. In a turbulent environment, businesses can’t afford to spend months crafting a single long-term strategy. They need a portfolio of multiple transient advantages that can be built quickly and abandoned just as rapidly.
Transient advantages call for a whole new playbook, says Columbia Business School’s McGrath. It involves a view of strategy that is less industry-bound and more customer-centric. Executives who grasp this shift don’t rely solely on analysis to develop strategy; they use tools like advanced pattern recognition and observation to set broad strategic themes and then let people experiment within them. They also adopt decision metrics that support entrepreneurship, replacing the net present value rule, for instance, with the logic of real options. And, knowing that product features can be copied instantly, they focus on providing experiences and solutions to problems to customers, and turn relationships into competitive barriers.