Tag Archives: jack welch

Why is competitive advantage temporary?

competitive advantage is temporary

An often asked question. Yet, there are those who think that competitive advantages are everlasting.

Competitive advantage, it seems to me, has become an instrument of finance. As in, how can our company accumulate hoards of cash to become sustainable?

The defining metric for said advantage is profits. That is a mindset, I believe, of playing not to lose.

Accumulating a war chest of money doesn’t mean you will outlast the next wave of change, you have things upside down, for an investment in innovation is an investment in your future.

To innovate: Steal don’t imitate

When no one knows what’s going to happen we’ll naturally look at other people for clues on how to behave. This is the basis of imitation, and it’s a survival tactic. Simply said, in an environment where the world is changing, the best strategy is lots of imitation. The problem with this is we’re rarely aware of how ‘much imitation’ is necessary and plain and simple. It’s a balancing act to decide what to copy and what not.

Practice ‘Smart Stealing’

The best strategy is to ‘steal’ from different sources, ideally ‘the best’ sources outside your industry.

Examples abound of companies who have ‘stolen’ from others. Apple stole Xerox’s musical interface and mouse ideas. Facebook and MySpace stole Friendster’s social network idea. Microsoft stole Netscape’s browser idea. . It’s even happening in the Venture Capital Industry where one .