Building Sustainable Competitive Advantage

Building Sustainable Competitive Advantage

In order to build sustainable competitive advantage, more and more companies are blowing up old industry models and offering their customers a new and better deal. In the United States, Wal-Mart has done it in retailing, Southwest Airlines has reconfigured air travel - the list goes on to include Charles Schwab, Embassy Suites, Federal Express, and hundreds more. These upstarts have created new assets rather than just managing those that were locked up in the old ways of doing things.

Successful organizations like these make plans to operate simultaneously in three different kinds of futures:

Predictable futures, where information about what's required is readily available to everyone in the marketplace and flawless execution is the key to success.

Uncertain futures, where what's required can't be anticipated in advance and adaptability and flexibility are the key differentiating capabilities. Here, the name of the game is improvisation, not standardization.

Intuitive futures, where what's required is defined by creating new business opportunities. Organizations gain sustainable competitive advantage by finding patterns that connect existing elements in their environment in new and original ways, or by inventing elements that can be used to create new patterns not previously in effect. Here, innovation and speed win the day.

Successful organizations in the future will be simple, small, speedy and strategic. The challenge for most organizations will be to add speed and capability without adding complexity.

When creating the organizations of the future, aim to be global, lean, fast and smart. The real voyage of discovery consists not in seeking out new structures but in seeing the world with new eyes.



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