The Execution Advantage
I’ve always put a lot of stock in business execution. The first book and management thinker I was truly influenced by was not Porter’s concepts on Competitive Advantage but (the late) Professor CK Prahalad’s notion of competing on Execution. I’ve been specific about this in a post and Nilofer Merchant did a great job illustrating this in her Harvard Business Review piece. And as a side note, if you haven’t read it, Nilofer’s 11 Rules for Creating value in the Social Era beautifully explains how the social era has fueled the need to re-think the rigidity of organizations and how old notions of “strategy” can in fact chain you down to a rigid line of thinking and purpose.
And so this write up on Forbes by Steve Denning about “the End of Competitive Advantage” really struck a chord with me. Citing a new book by Columbia Professor Rita Gunther McGrath on ‘The End of Competitive Advantage“, Rita says:
“There are indeed examples of advantages that can be sustained, even today. Capitalizing on deep customer relationships, making highly complicated machines such as airplanes, running a mine, and selling daily necessities such as food are all situations in which some companies have been able to exploit an advantage for some time. But in more and more sectors, and for more and more businesses, this is not what the world looks like any more. Music, high technology, travel, communication, consumer electronics, the automobile business, and even education are facing situations in which advantages are copied quickly, technology changes, or customers seek other alternatives and things move on. “
I love this. I’m of the thinking that most leadership styles give too much credit to good idea origination and by extension, “strategy”. I’ve always intently focused on crediting execution in my leadership roles. If you have a good idea, use it. If you have a way to improve on someone else’s idea, use that. Either way, move fast to execution. Rewarding an execution culture is far more useful in my book. You stop wasting time on competing with other team members on who is smarter and more time on how to organize to get it done better and faster.
And this de-emphasis on Competitive Advantage as described by Rita brings Execution into even sharper focus. Strategy moves from the best idea to an execution discipline of intently listening to customers about what they need, figuring out how to frame questions to draw out not product features but the undercurrents that govern their business and market realities and subsequently drives why they work the way they work. Stated more simply, strategy moves from the best idea to the ability to ask the best questions. Then you’re in a position to understand where you need to offer incremental improvement or radically change how work gets done and disrupt markets as you do it.
Sustainable Competitive Advantage implied that you had some strategic differentiator that could carry you through for years and even decades. Given this definition, no competitive advantage is sustainable any more. I much rather bet the farm on a culture of sustainable execution. And let the best business ideas surround this culture.
Execution is the advantage.