Sustaining a competitive advantage

Where do companies find a competitive advantage? We’ve all heard the answers. We find an advantage in our ability to innovate, in our lower price, in our quality, in our people, in our service, and on and on.

Looking at and thinking about these answers it quickly becomes apparent that, although, these things may really give us a competitive advantage they are all outcomes. Having a lower price, better quality, better people, or a more innovative product is a result of things management is doing inside the organization. Therefore, we need to look backwards in the sequence of events to see what it is that management is doing that led to their companies’ advantageous outcomes. What is the real source of each of those competitive advantages? If we can identify the source, can we then capture and institutionalize it so we bolster our ability to continually maintain a competitive advantage?

As it turns out, the source of a building a competitive advantage is the same in all types of organizations whether for-profit, not-for-profit, or public service. Those organizations that build a competitive advantage and are able sustain it all do so in a similar way. They continue to change but in a special way.

First of all, why is it important to continuously change? Because everything around us is changing moment by moment. As soon as a company successfully releases a new product or service that is in some way advantageous to what is currently available they start winning customers. This quickly catches the attention of competitors and others in the market who, in turn, work hard to build their own advantage.

Therefore, companies that are best able to change in relation to the way their external environment is changing are the ones that move ahead. Anytime there is a change in the marketplace this creates problems and/or opportunities for the companies operating in that market. The companies that best deal with that change are the ones that move ahead the fastest.

This is the job of management: to build a process by which the company can most effectively and efficiently deal with the problems and opportunities caused by change. When a company builds a strong managerial process focused on this realization then it has a real and sustainable competitive advantage.

To paraphrase what Charles Darwin said more than 100 years ago, “It is not the strongest of the species that survives, nor the most intelligent. It is the one that can best adapt to change.”

Greg Mathers, Certified Associate
Adizes Institute

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