“Competitive Advantages Are Transient.
When industry knowledge matures, copycats will catch up. Because latecomers often inherit a lower cost structure without the legacy assets, they exert competitive pressures on industry pioneers.
It Is Possible to Maintain Your Competitive Advantage
To avert this trajectory requires executives to reassess a firm’s foundational or core knowledge and its maturity. Circumventing the seemingly inevitable begins by acknowledging where we are. Managers must therefore ask themselves what knowledge discipline is the most fundamental to their company. What is the core knowledge of your business? And how mature or widely available is it?
How likely will the core competencies of your business be devalued, and how soon?.
If Leaping Is So Important, When Is the Best Time to Leap?
A performance crisis, whether perceived or real, legitimizes top leaders’ push for an abrupt reorientation. In breaking the grip of the existing organization, top management may simultaneously announce a new strategy and centralize resource allocation to make major investments in new areas or to force divestiture of unpromising projects. But such an abrupt change with such a wide scope also incurs huge risks because it leaves no margin for errors. It is therefore better to experiment, making small bets, while time is still on our side. In fact, one doesn’t need to be a super-forecaster to know where to leap next. The inevitable is often quite apparent. Companies just need to leap while time is still on their side.
Successful executives often exhibit a bias for action. But it’s even more important to separate the noise from the signal that actually pinpoints the glacial movement around us. Listening carefully to the right signals requires patience and discipline. Seizing a window of opportunity, which means not necessarily being the first mover but the first to get it right, takes courage and determination.”
Excerto de “Leap” de Howard Yu.