To truly innovate and create value for customers and shareholders, organisations need to build strategies around “transient advantages” that are fluid, customer-centric, and less industry-bound. With transient advantages, organisations must move through the product lifecycle more rapidly and more often, with a better understanding of the earlier and later stages:
(1) Launch: identify an opportunity and mobilise resources. Engage people who are comfortable with experimentation and who get bored with the typical structures needed to manage large organisations.
(2) Ramp up: Bring the idea up to scale by engaging people who can assemble the right resources at the right time, without sacrificing quality.
(3) Exploitation: Capture profits and share, and force rivals to respond. Engage people who can handle M&As;, and who are excellent, efficient decision makers.
(4) Reconfigure: Keep the advantage “fresh” to counter competition. Engage people who thrive on radically rethinking business models and resources.
(5) Disengage: When the advantage erodes, extract and reallocate resources to the next-generation advantage. Engage tough-minded people who can overcome emotionally difficult decisions.
Action Point
Action Point: To assess your organisation’s capabilities to build transient competitive advantages consider the following:
Do you have systematic procedures in place for exiting (disengaging) businesses?
Can you change plans seamlessly as new information comes in?
Can you easily pull resources from successful businesses to fund uncertain ones?
Sources: McGrath, R. G. (2013) Transient Advantage, HBR, June; and Underwood, J. (2004) What’s Your Corporate IQ? Kaplan Publishing, US.