In today’s business environment, sustainable competitive advantage is a risky choice because it can lock the firm into a position that is inflexible and not adaptive to changing market conditions. Okay, but then you ask, is short-term competitive advantage the way to go? That depends. It is contingent on how dynamic the marketplace is; what level of investment is required to establish the position; and what the next progressive step emanating from the position of competitive advantage is. In short, pursuing short-term competitive advantage is risky, and not the best way forward.
Instead, the focus of the firm should be on the ability to grow and adapt, rather than on a short-term position lock here and there. Today’s successful businesses are much more fluid and dynamic then what would fit the lock and shift mentality connected with short-term competitive advantage.
I encourage strategists and leaders to focus more on corporate culture and the antecedents of idea generation (i.e. how does your team think?) to find winning strategies. This means embracing and purposefully engaging entrepreneurial thinking and corporate entrepreneurship as a critical elements of strategy development and implementation. Strategic entrepreneurship needs to be the new mantra — replacing strategic planning, which is too focused on locking in specific market positions that one hopes will by chance lead to sustainable competitive advantage.
Today’s business world is much too transparent and dynamic – the idea of there being an easy road to turning your firm into a cash machine is one that belongs to a bygone day. And by the way, it is more fun (I think) to live and function in a dynamic marketplace. Your competition is changing what they do daily – are you?
Author Biography
Jim Dewald is the author of ACHIEVING LONGEVITY: How Great Firms Prosper Through Entrepreneurial Thinking. He is the dean of the University of Calgary’s Haskayne School of Business and an associate professor in strategy and entrepreneurship. Prior to entering academe, he was active in the Calgary business community as the CEO of two major real estate development companies and a leading local engineering consulting practice, and president of a tech-based international real estate brokerage company.
