Business Model
Transient AdvantageFacilitated by Dr. Evie Wibowo Iman
Strategy is StuckFor too long the business world has been
obsessed with the notion of building sustainable competitive
advantage.Obviously, its marvelous/exceptional to compete in a way
that others cant imitate (GE, IKEA, Unilever).But its now rare for
a company to maintain a truly lasting advantage (the forces at
work; the digital revolution, fewer barriers to entry,
globalization etc).To stay ahead, they need to constantly start new
strategic initiatives, building and exploiting many transient
competitive advantage at once. Sustainable competitive advantage is
now the exception, not a rule. Transient advantage is the new
normal.Idea in BriefThe dominant idea in the field of strategy-
that success consists of establishing a unique competitive
position, sustained for long periods of time- is no longer relevant
for most businesses.They need to embrace the notion of transient
advantage instead, learning to launch new strategic initiatives
again and again.Returns Ramp UpExploitationReconfigurateThe Wave of
Transient Advantage DisengageLaunchThe Wave of Transient
AdvantageLaunchIn which the organization identifies an opportunity
and mobilizes resources to capitalize on it.Ramp up This period
calls for people who can assemble the right resources at the right
time with the right quality and deliver ton the promise of the
idea.ExploitationIn which it captures profits and share, and forces
the competitors to react.ReconfigureThe firm has to reconfigure
what its doing to keep the advantage fresh. (Often the very success
of the initiatives generates competition, weakening the
advantage.)DisengagementThe advantage is completely eroded. (IBM.
Sony, Nokia, Kodak etc)
Returns from a Series of Replicable
ActionsTime024LaunchExploitationCounterattackOrganization has
already moved to next advantageTEMPORARY ADVANTAGESeven Dangerous
MisconceptionsThe first - mover trap (in most industries a first
mover advantage doesnt last) The superiority trap (many companies
dont see the need to invest in improving their established
offerings)The quality trap (when a cheaper, simpler offer is good
enough, customers will abandon the incumbents)The hostage-resources
trap ( have no incentive to shift resources to new ventures)The
white-space trap (when opportunities dont fit their structure,
firms often simply forgo them instead of making the effort to
reorganize)The empire building trap (bureaucracy building; it
prevents experiments; it causes employees who like new things to
leave) The sporadic-innovation trap (innovation is an on-again,
off-again)Strategy for Transient AdvantageThe New Play BookThink
about arenas, not industries (an arena is combination of a customer
segment, an offer and a place in which that offer is delivered)Set
broad themes, and let people experiment (to try different business
models)Adopt metrics that support entrepreneurial (conventional
metrics can effectively kill off innovations; try new things))
Focus on experiences and solutions to problem Build strong
relationships and networksAvoid brutal restructuring; learn healthy
disengagement. (to continually adjust and re adjust its resources)
Get systematic about early-stage innovation (to have a governance
structure suitable for innovation)Experiment and learn.Leadership
as OrchestrationA great leader do is work out some key directional
guidelines, put in a place good processes for core activities such
as innovation.
A strong leader seeks contrasting opinions and honest
disagreement.
A transient advantage leaders recognize the need for speed.THANK
YOU
Elements of a Companys Business Strategy
