Transient Advantage

Transient Advantage

According to Colombia BS Professor Rita Gunther McGrath, achieving a Sustainable Competitive Advantage (SCA) (establishing a unique competitive position that can be sustained for long periods of time) is nearly impossible these days.
Allthough that idea is not new (see for example this discussion on 12manage: Is Strategic Planning Passé? and compare Real Options and Emergent Strategy), Professor McGrath does introduce an interesting new term: TRANSIENT ADVANTAGE (TA).
I looked up the word "transient", it means: brief, temporary, passing, provisional, temporal. Quite the opposite of sustainable if you think about it.
McGrath argues companies need to embrace the notion of TA instead of SCA, "learning to launch new strategic inititiatives again and again, and creating a portfolio of advantages that can be built quickly and abandonded just as rapidly".

What I liked most of this article is the seven dangerous misconceptions, most of which indeed I have witnessed several times over the years:
1. The first-mover trap (The belief that being first to market creates a SCA)
2. The superiority trap (The belief it is impossible to create a better product)
3. The quality trap (The belief that offering the highest quality provides a SCA - it won't because cheap and poor competitors will improve over time)
4. The hostage-resources trap (The habit of allocating most of the resources in a corporation to the big divisions / cash cows)
5. The white space trap (innovation don't fit anywhere in the org chart)
6. The empire-building trap (in many large firms, the top positions and rewards are for those managing the large operations, resulting in hoarding, bureaucracy, and resistance to change)
7. The sporadic-innovation trap (innovation is an on/off process; not a continuous pipeline).

To create an innovation pipeline or portfolio of advantages, companies need to apply eight shifts in the way they operate and think about strategy:
1. Think about arenas, not industries (threats can come from players outside of your industry)
2. Set broad terms and then let people experiment (allow freedom to be creative)
3. Adopt metrics that support entrepreneurship
4. Focus on customer experiences and solutions to real problems
5. Build strong personal relationships and networks
6. Avoid brutal restructuring and learn healthy disengagement
7. Get systematic about early-stage innovation
8. Experiment, iterate, learn.
And most of all: leaders must recognize that fast and roughly right decision making must replace deliberations that are precise but slow.
Source: Transient Advantage: Rita Gunther McGrath in HBR June 2013, p62-70

		Comments Sort by date Sort by rating Rating
		3 Purna Chandra Business Consultant, India
	Transient Advantage Sounds like INNOVATION & CHANGE To sustain CA, an organization has to continually innovate and change. It has to be very agile in de... Sign up

		1 In Ho Kim, Republic Of Korea
	New Sights on Profit-seeking Will CA, SCA, or even TA guarantee a superior performance while an industry evolves into a new one w... Sign up

		0 Jaap de Jonge Editor, Netherlands
	Adaptive Goodness @In Ho Kim: Thank your for your reaction, which looks interesting. Could you please elaborate and ex... Sign up

		0 Andrew Blaine Business Consultant, South Africa
	Arenas and Markets I am inclined to agree with the principle behind the commentary of this topic. However, there are, i... Sign up

		0 K.V.Narrasimham Professor, India
	TA & Adaptive Goodness @In Ho Kim: Please let us know what is Adaptive Goodness (AG). AG it seems is a continuous process ... Sign up

		2 In Ho Kim, Republic Of Korea
	Adaptive Goodness @Jaap de Jonge (Editor), @K.V.Narrasimham: In order for us to understand and explain value creation ... Sign up

		0 Vivek Joshi, India
	'TA' versus 'Simple Steps' Some time back early in the last decade I recall reading a paper which said that Strategy by "Simple... Sign up

		1 Indrajit Sethi Professor, India
	SCA should be Left Behind in 20th Century TA spells a fresh approach! The top leading organizations tend to slacken as they have tendency to ... Sign up

		-2 taha2656, Pakistan
	Transit Advantage (TA) and SCA I feel TA and SCA are same as Objectives and Strategies. SCA should give a direction while TA can b... Sign up

		2 Jagdish B Acharya Consultant, India
	TA, SCA etc. Come Much Later @In Ho Kim: I agree with you. When a firm understands customer requirements better and provides AG, ... Sign up

		0 Andrew Blaine Business Consultant, South Africa
	Recognition of Advantage @Jagdish B Acharya: I am not sure that I agree with your sequence of events, and would rather sugges... Sign up

		0 In Ho Kim, Republic Of Korea
	AG as a Result of Needs-Focused Innovation @Jagdish B Acharya: Thanks for your understanding of Adaptive Goodness(AG), which can be represented... Sign up

		0 Robinson M. Tenu Entrepreneur, Cameroon
	Transient Advantages = Opportunities to Exploit Sometimes simple opportunities pop up during business operations that can be exploited. If such oppo... Sign up

		1 In Ho Kim, Republic Of Korea
	What Makes a Transient Situation? When customers' needs change or evolve, a firm's strategy should also be modified. This could range ... Sign up

		3 Anneke Zwart Student (University), Netherlands
	From Sustainable Competitive Advantage to Transient Advantage In the past decades, basically all businessess’ strategy frameworks have been incorporated with the... Sign up