Monday, 22 September 2014

The End of Competitive Advantage – Gunther McGrath 2013

Most of the time the book follows the path of scaring reader by stating how everything is getting faster and faster and how all of us need to be more and more flexible. There are some interesting thoughts, though, as well:

"Texts on strategy and innovation are full of great ideas and new things that leaders should do. (...) "There aren't any textbooks on what to stop doing."" (Gunther McGrath, 2013, p.53).

The ability to disengage from a former competitive advantage is as important as launching a competitive advantage (Gunther McGrath, 2013, p.13). “it is through reconfiguration that assets, people, and capabilities make the transition from one advantage to another.” (Gunther McGrath, 2013, p.27).

“Although dynamism and rapid change are all around us, people are not very effective when facing extreme uncertainty – it tends to be paralyzing. The outliers, therefore, have crafted social architectures that bound the amount of uncertainty and change their people have to face.” (Gunther McGrath, 2013, p.34).

“that wrenching change seldom characterizes strategic shifts at the outlier companies.” (Gunther McGrath, 2013, p.40). “instead, it seems, that outlier firms, relative to competitors, embed change in their normal routines. They reallocate resources flexibly and on an ongoing basis, rather than going through sudden disvestitures or restructuring.” (Gunther McGrath, 2013, p.41).

“”When we decide to get out of something, we slow down on allocating resources to those things. They find their way to insignificance in a period of time .. you don’t need to chop it off, you need to let it live its live.” (Gunther McGrath, 2013, p.43). “At IBM, for instance, stopping projects such as OS2 and exiting the PC business were both moves that freed up resources, time and attention to be able to focus on opportunities.” (Gunther McGrath, 2013, p.79). Also: proactively retiring limiting older IT assets.

“I contrast to their competitors, the outlier firms also appeared to have fewer big, high-risk all or nothing bets, which is also consistent with an options orientation.” (Gunther McGrath, 2013, p.48). “it could simultaneously invest in the renewal of its core business while exploring new alternatives.” (Gunther McGrath, 2013, p.49).

“Strategy is often carried out by a small group of people. (…) Often the people who see changes coming are not those in charge of making major organizational decisions. They are technologists, scientists, and oattern recognizers. Often, also, the people who are in a position to make difficult choices face the prospect of personal and career catastrophe if the predictions turn out to be true.” (Gunther McGrath, 2013, p.139).

“Psychologists tell us that we all have a pervasive bias in our thought processes, namely, to seek out information that confirms what we believe to be true. (…) Part of the new playbook for strategy is to do what Justus did at Berlitz and actually seek discomforting evidence.” (Gunther McGrath, 2013, p.145).

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