Two weeks ago I explained why I think competitive advantage is often attached to the wrong things. So corporations hide things they would get more benefit from sharing. This week, I offer one opinion on what competitive advantage is, and how to get more of it.
I recently happened on a blog by Rob Karel about business process. That sounds a bit dull perhaps, but I liked this:
The "data is an asset" rhetoric doesn't translate to [monetary value], because data in and of itself has no value! The only value data/information has to offer... is in the context of the business processes, decisions, customer experiences, and competitive differentiators it can enable.
So if data are not a competitive advantage, and neither are most of the software and industrial technology we use, and nor yet are industry training courses or consoritum-based research programs, then what is? Here's my list:
Pro-active responsibility Certainly not a competitive advantage even 15 years ago, today there's no doubt that your respect for the physical and human environment affects your competitiveness today. Ask BP, or WalMart. I see a wide gap between the best and worst performers here (in areas like aboriginal relations, emissions standards, seismic practice), though it's sometimes a tough call because most companies do at least one thing right. This is not enough.
Strategic clarity It is unfortunately rare to find a large organization with an inspiring visionary in charge. Try thinking of some: once you get past Apple, Google, and Facebook, it gets quite hard. In my experience, very few leaders even try to lead with passion, perhaps seeing it as emotional, unserious and risky. Leading with dull predictability is far, far riskier, however, because it robs employees of a sense of common purpose.
Professional excellence Few companies succeed at nurturing the social and technical networks of their employees, being totally focused on the organizational network—who reports to whom. I have seen organizations dabble with it, but after a year or so they are frustrated with the lack of progress and give up. From my own experience leading a global network at ConocoPhillips, I know it takes at least five years to make progress. That's about two decades in VP years.
Timely innovation Does not mean getting more patents than the next company (and forcing them to hire your people then innovate around you). It means having a way to get ideas out of the organization and into practice—in a month (OK, maybe three). Unfortunately, thanks to your hierarchical organization, most problems are somebody's responsibility. And the last thing that somebody wants is someone else solving them.
Firstliness Knowing the value of being early, at least among your peers. There is at least as much currency in being first as in being better. In very difficult circumstances, like drilling a well in the Beaufort Sea for example, it may pay to be second (the so-called fast follower)—the first will experience more trouble than you may want. But to be second on purpose, you have to know how to be first.
Execution It's obviously not enough to innovate and be early, you have to be able to make stuff happen. Being able to do them with less fuss, less money, and less slowness clearly differentiates some companies. In Canada, the best known are perhaps EnCana and CNRL. Their procurement and project management systems are built for efficiency and speed.
Repeatability Getting things done is one thing, but you need to be able to do them again and again. Examples of things to be good at repeating are scaling up projects, hiring amazing people, expanding overseas, getting into new plays, drilling safe wells. The difficult part is avoiding getting mired in the repetition and becoming complacent or impatient—this is a corporate skill that needs honing.
If you work in an organization, what corporate skills have the power to change your future?
I will take a look at some of these ideas in more detail in later posts, but next time I want to look at what to do with those other things: data, software, training, etc. Maybe you can turn them into a competitive advantage after all.