Understanding Transient Advantage in Business Strategy

Transient Advantage

The idea that success of a business is contingent on a company's ability to consistently launch new strategic initiatives and create a portfolio of advantages that can be built quickly and abandoned just as rapidly.

Risks in a Transient-Advantage Economy

Indicators that a company might be facing imminent destruction include: not buying its own products or services, investing at the same or higher levels without better margins or growth, customers finding cheaper or simpler solutions, unexpected competition, lack of customer excitement, poor reputation as an employer, loss of top talent, and perpetually undervalued stock.

Transient Competitive Advantage

The notion that in business, success is less about making money and more about responding to customers' jobs to be done.

Empire Building Trap

Having a lot of assets; promoting hoarding, bureaucracy building, and fierce defense of the status quo; inhibits experimentation, iterative learning, and risk-taking.

Sporadic Innovation Trap

No current system for creating a pipeline of new advantages; innovation is an on-again, off-again process driven by individuals, vulnerable to swings in the business cycle.

Companies in high-velocity industries must learn to cycle rapidly through the stages of competitive advantage.

True

New Playbook Based on Transient Advantage

Encourages companies to shift from industry-level analyses to orchestrating competitive moves in arenas, which encompass a combination of a customer segment, an offer, and a place in which that offer is delivered.

According to a McKinsey survey, 94% of executives are satisfied with their firms' innovation performance.

False

Key Behaviors of Innovative Organizations

They always assume there's a better way to do things, focus on understanding customers' needs, collaborate across the organization, recognize the need for experimentation and rapid iteration, and empower people to take risks and voice dissenting opinions.

Effective Ways of Boosting Innovation

Includes questioning the status quo, focusing intensely on customers, and collaborating better.

Definition of Innovation

An on-again, off-again process that is driven by individuals, making it extraordinarily vulnerable to swings in the business cycle; something different that creates value.

Time Blocker Strategy for Innovation

Software developers were encouraged to spend 70% of their time on day-to-day work, 20% on work-improvement ideas, and 10% on experiments and pet projects.

Nudges

Promote change through indirect suggestion and reinforcement.

Kotter's Eight Steps to Transforming an Organization

Establishing a sense of urgency, forming a powerful guiding coalition, creating a vision, communicating the vision, empowering others to act on the vision, planning for and creating short-term wins, consolidating improvements and producing still more change, institutionalizing new approaches.

Communication in Transformation Efforts

In more successful transformation efforts, executives use all existing communication channels to broadcast the vision.

Empirical evidence suggests that simply diversifying a workforce makes a company more profitable.

False

Value of Diversity

Diversity is more effective when employees are valued and respected.

Organizational Culture

The tacit social order of an organization: it shapes attitudes and behaviors in wide-ranging and durable ways.

Benefits of Diversity in Sport Organizations

Create a psychologically safe workplace, combat systems of discrimination and subordination, embrace the styles of employees from different identity groups, and make cultural differences a resource for learning and improving organizational effectiveness.

Primary Dimensions of Organizations

People interactions and response to change.

Group Think

Reliance on consensus-based decisions, avoidance of difficult issues, and a calcified sense of 'us versus them.'

Cultural Styles: Caring

Focuses on relationships and mutual trust; work environments are warm, collaborative, and welcoming.

Cultural Styles: Learning

Characterized by exploration, expansiveness, and creativity; work environments are inventive and open-minded.

Cultural Styles: Order

Focused on respect, structure, and shared norms; work environments are methodical and emphasize shared procedures.

Comprehensive Study on Organizational Cultures

Of the 8 culture styles, results ranked first in defining the organizations within the study.