Is sustainable competitive advantage as obsolete as a... Zune? Are you at risk of being trapped in an uncompetitive business?
Welcome to a Leadership Channel Podcast on TotalPicture Radio. Today's interview is hosted by friend-of-the-show and guest podcaster David Dalka, Ecommerce business strategist, digital marketer and keynote speaker.
The surprise retirement of Microsoft CEO Steve Ballmer provides a perfect lead-in to today's podcast. Perhaps the most telling aspect of this story, as reported on the front page of the Weekend Wall Street Journal: "Steve Ballmer Who Faced Criticism Over Waning Growth, to Leave Within a Year; Stock Jumps 7%." I don't care how many millions of dollars you have (and of course Ballmer, college buddy of Microsoft founder Bill Gates, has plenty of millions), that 7% number has to sting. Has Microsoft relied on the duo cash cows of Windows and Microsoft Office for too long?
In her new book The End of Competitive Advantage (Harvard Business School Press), Rita Gunther McGrath argues that it's time to go beyond the very concept of sustainable competitive advantage. According to McGrath, organizations need to forge a new path to winning: capturing opportunities fast, exploiting them decisively, and moving on even before they are exhausted. She shows how to do this with a new set of practices based on the notion of transient competitive advantage.
In short, strategy is stuck. Most leaders are using frameworks that were designed for a different era of business and based on a single dominant idea-that the purpose of strategy is to achieve a sustainable competitive advantage. Once the premise on which all strategies were built, this idea is increasingly irrelevant. In 2000, the year Steve Ballmer took over the company, Microsoft had a market value of $603 billion. Today? It's $290 billion. Contrast these numbers with Apple: in 2000, the company had a market value of $18 billion. Today Apple's market value is $455 billion. (Source: FactSet The Wall Street Journal).
Think about it. Chances are the strategies that worked well for you even a few years ago no longer deliver the results you need. Dramatic changes in business have unearthed a major gap between traditional approaches to strategy and the way the real world works now. The End of Competitive Advantage is your guide to renewed success and profitable growth in an economy increasingly defined by transient advantage.
Rita Gunther McGrath, a Professor at Columbia Business School, is a globally recognized expert on strategy in uncertain and volatile environments. Her thinking is highly regarded by readers and clients who include Pearson, Coca-Cola Enterprises, General Electric, Alliance Boots, and the World Economic Forum. She is a popular instructor, a sought-after speaker, and a consultant to senior leadership teams. She was recognized as one of the top 20 management thinkers by global management award Thinkers50 in 2011.
She's also been recognized as one of the top ten business school professors to follow on Twitter. In 2009, she was inducted as a Fellow of the Strategic Management Society, an honor accorded those who have had a significant impact on the field. In 2013 she will serve as Dean of the Fellows. McGrath is the author of four books including her new book The End of Competitive Advantage: How to Keep Your Strategy Moving as Fast As Your Business (Harvard Business Review Press). Rita can be found on Twitter at @rgmcgrath.
About Peter Clayton
Peter Clayton, Producer/Host, is an award-winning producer/director of radio, television, documentary, video, interactive and Web-based media who has created breakthrough media for a wide array of Fortune 100 clients.