If you take a course in strategy any time soon you are likely to run into a very topical and lively debate.
In the traditional view of strategy, originally championed by by Prof. Michael Porter, businesses must cultivate a unique and sustainable competitive advantage. “Not so!” says fellow Top 50 Thinker Prof. Rita McGrath who maintains that, in an uncertain world where competition can come from everywhere the idea of a sustainable advantage in business is actually counter-intuitive.
An Associate Professor of Management at the Columbia Business School and consultant McGrath’s The End of Competitive Advantage: How to Keep Your Strategy Moving as Fast as Your Business, is in the words of the Financial Times, “a battering ram aimed straight at the door of Prof Porter’s Institute for Strategy and Competitiveness”. Her arguments are compelling, backed up by research and offer an explanation for the success of many of today’s most innovative and profitable organisation (for more on this read our recent review).
Prof. McGrath is at IMI this week translating these insights into practical knowledge for the Senior Executive Programme. We caught up with her to ask her to boil it down for us… in six words of course. – Eva Maguire
Irish Management Institute: If there is no such thing as sustainable advantage – what 6 words of advice would you give a business?
“Rewrite your playbook for transient advantage”
Irish Management Institute: What does this really mean?
RGMcG: In conventional strategy, the goal is to create a competitive advantage that lasts for a long time, hence is sustainable. In a transient advantage economy, your organisation’s strategy playbook has to expand to incorporate both the creation of a pipeline of multiple competitive advantages through innovation as well as being able to disengage from those advantages that have been exhausted in a healthy way.
Irish Management Institute: Where should we go to learn more?
RGMcG: My new book The End of Competitive Advantage: How to Keep Your Strategy Moving as Fast as Your Business, sign up to my web site for low volume updates www.ritamcgrath.com or follow me on Twitter @rgmcgrath
So it looks like we’re witnessing yet another evolution in how we think about strategy. And while these debates may be sparked in the pages of the Harvard Business Review and Financial Times they are highly relevant to the day to day running of organisations as they ultimately shape the prevailing wisdom about how we run operations and front line management.
Is your organisation’s competitive advantage something you believe should be gripped tightly, or do you loosen your grip, allowing your business to identify pick up (and drop) new capabilities that broaden the playing field?
We’ll be continuing the discussion and want to know your thoughts….
In conversation with Eva Maguire, IMI
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