End of Competitive Advantage - Disruption Test by Rita McGrath


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Is your company or firm at risk in the transient advantage economy? Take this brief test and see how you score. Get your senior team to take it and see if there is agreement or differences. Then see where your score is on page 2 and begin to think about how you can manage in a world of transient advantages.

Want to know how to deal with transient advantages and avoid disruption? See http://www.blionline.org/rita for more information

Rita will be coming to Maryland on January 30th at the BWI Hilton Hotel and via webcast. She will be returning from the World Economic Forum in Davos, Switzerland ready to share her latest insights. This program is produced by the Maryland Association of CPAs and the Business Learning Institute.

Event details here:

Date: January 30,, 2014

Location: BWI Airport Hilton Hotel, 1739 West Nursery Rd., Linthicum Heights, MD 21090

Time: 8am ­ Registration & Book signing

9:00 am ­ 11:00 am Rita McGrath Presents the End of Competitive Advantage

11:00 am ­ 12:00 noon Reverse panel of C-level Executives moderated by Joann Sullivan, Editor of Baltimore Business Journal. The C-level panel will help bring Rita’s concepts home as BBJ editor, Joanna Sullivan moderates the panel with Carol Calandra, CFO of E&Y Global, Lisa Cines, Office Managing Partner of Dixon Hughes Goodman LLP, and a CEO of a Maryland-based company. Followed by a working session for you to develop your next steps and "competitive edge" playbook for 2014.

12:00 noon ­ 12:30 pm Creating your 2014 Competitive Edge Playbook

CPE: 4 hours

Cost: $195

Preparation: None
Program Level: Intermediate
Objectives: Understanding of the latest developments in strategy and competitive advantage

About the speaker:

Rita McGrath was just named the sixth most influential business thinker in the world by Thinkers50. FastCompany Magazine named her “one of the top 25 smartest women to follow on twitter.” She is Associate Professor of Management at Columbia Business School and has been featured in Harvard Business Review several times. She will be talking about her latest book, The End of Competitive Advantage – How to Keep Your Strategy Moving as Fast as Your Business.

Rita will address:
- How competitive advantage is changing in today¹s hyper-competitive environment
- The warning signs that you are at risk for being disrupted
- A test to determine how well your organization is positioned to take advantage of transient advantages
- The six components of the new strategy playbook
- How to think about resource allocation, budgeting and discovery-driven growth

Published in: Business

End of Competitive Advantage - Disruption Test by Rita McGrath

  1. 1. Diagnostic:    How  vulnerable  are  you  to  a  bias  for  exploitation?   In  a  world  in  which  advantages  are  fleeting,  one  of  the  most  significant  challenges  is  coping   with  systems  and  processes  that  are  basically  geared  to  exploiting  existing  advantages.     While  that’s  not  a  bad  thing,  necessarily,  it  can  lead  to  an  unbalanced  way  of  working,  which   in  turn  can  leave  you  vulnerable  to  disruptions  when  advantages  move  on.    The  following   diagnostic  can  help  pinpoint  areas  in  which  a  bias  toward  exploitation  is  present;  and   suggest  changes  that  you  might  want  to  make.    Simply  position  your  organization’s  current   way  of  working  between  the  two  statements  in  the  quiz.    Those  areas  to  the  left  are  those   which  you  might  want  to  have  a  good  hard  look  at.     Exploitation  Oriented     More  Balanced   Budget,  people  and  other     Critical  resources  are  controlled  by   resources  are  largely  controlled  by   1  2  3  4  5  6  7   a  separate  group  than  those  that   heads  of  established  businesses   run  businesses   We  tend  to  extend  our  established     We  tend  to  move  out  of  an   advantages  if  we  possibly  can   1  2  3  4  5  6  7   established  advantage  early,  with   the  goal  of  moving  on  to  something   new   We  don’t  have  a  systematic  process     We  have  a  systematic  way  of  exiting   for  disengaging  from  a  business     1  2  3  4  5  6  7   businesses   Disengagements  tend  to  be  painful     Disengagements  are  just  part  of  the     and  difficult   1  2  3  4  5  6  7   normal  business  cycle   We  try  to  avoid  failures,  even  in     We  recognize  that  failures  are   uncertain  situations   1  2  3  4  5  6  7   unavoidable  and  try  to  learn  from   them   We  budget  annually  or  for  even     We  budget  in  quick  cycles,  either   longer   1  2  3  4  5  6  7   quarterly  or  on  a  rolling  basis   We  like  to  stick  to  plans  once  they     We  are  comfortable  with  changing   are  formulated   1  2  3  4  5  6  7   our  plans  as  new  information  comes   in   We  emphasize  optimization  in  our     We  emphasize  flexibility  in  our   approach  to  asset  utilization   1  2  3  4  5  6  7   approach  to  asset  utilization   Innovation  is  an  on-­‐again,  off-­‐again     Innovation  is  systematic,  a  core   process   1  2  3  4  5  6  7   process  for  us   It  is  difficult  for  us  to  pull     It  is  quite  normal  for  us  to  pull   resources  from  a  successful   1  2  3  4  5  6  7   resources  from  a  successful   business  to  fund  more  uncertain   business  to  fund  more  uncertain   opportunities   opportunities   Our  best  talent  spends  most  of     Our  best  talent  spends  most  of  their   their  time  problem-­‐solving  and   1  2  3  4  5  6  7   time  working  on  new  opportunities   handling  crises   for  our  organization   We  try  to  keep  our  organizational     We  re-­‐organize  when  new   structure  relatively  stable  and  to  fit   1  2  3  4  5  6  7   opportunities  require  a  different   new  ideas  into  the  existing   structure   structure   We  tend  to  emphasize  analysis     We  tend  to  emphasize   over  experimentation   1  2  3  4  5  6  7   experimentation  over  analysis   It  isn’t  easy  to  be  candid  with  our     We  find  it  very  easy  to  be  candid   senior  leaders  when  something   1  2  3  4  5  6  7   with  senior  leaders  when   goes  wrong   something  goes  wrong  
  2. 2. Diagnostic:    How  vulnerable  are  you  to  a  bias  for  exploitation?     After  completing  the  diagnostic,  simply  total  the  scores  you  gave  yourself.  If  you  are  completing  the  diagnostic  as  a   group,  use  the  average  of  the  scores  for  each  item  from  the  group  and  then  total  the  average.  This  first  set  of  results  will  give   you  an  overall  perspective  on  where  your  organizations  stands  with  respect  to  transient  competitive  advantage  overall.  The   total  score  values  below  puts  you  in  a  band  with  the  most  likely  scenarios  described. Score  between  14-­‐28 Scores  in  this  range  indicate  an  extreme  orientation  toward  exploiting  an  existing  advantage.  This  is  only  a  safe   place  to  be  if  you  are  in  a  monopoly  position  (government,  long-­‐term  patents,  enormous  barriers  to  entry,  legislative   protection)  or  are  operating  in  an  extremely  stable  niche  market  (for  instance,  Steinway  pianos).  For  organizations  in  other   circumstances,  this  result  would  be  alarming  as  very  few  of  the  practices  that  are  suitable  for  transient  advantages  are  in   place.  An  immediate  action  step  would  be  to  examine  the  underpinnings  of  your  current  success  and  see  whether  they  are   likely  to  remain  stable  or  to  change  to  assess  whether  a  more  aggressive  change  program  is  in  order. Score  between  29-­‐42 This  result  suggests  that  your  organization  is  strongly  biased  toward  exploiting  existing  advantages.  You  are  at  risk   of  being  trapped  in  an  existing  business  model.  As  with  the  first  category,  scores  in  this  range  merit  a  clear-­‐eyed  examination   of  whether  the  existing  state  of  affairs  in  your  organization  is  likely  to  last  for  some  time  and  whether  an  investment  in   developing  capabilities  more  suited  to  a  transient  advantage  context  are  warranted. Score  between  43-­‐56 This  score  band  is,  in  my  experience,  the  most  common.  Chances  are  that  there  are  pockets  of  dynamism  within   the  organization  that  are  trying  to  respond  quickly  to  a  more  competitive  environment,  but  the  central  bias  of  the   organization  is  still  toward  exploiting  existing  advantages.  You  can  expect  the  processes  both  of  innovation  and   disengagement  to  struggle  against  the  status  quo  in  the  existing  organization.  This  situation  is  often  quite  politically  difficult   as  new  business  models  and  ways  of  working  come  into  conflict  with  prevailing  practices.  It  is  often  necessary  for  the  senior   team  to  take  ownership  of  instituting  a  more  dynamic  way  of  working  across  the  organization,  as  it  will  be  difficult  to  sort   out  the  many  conflicts  at  an  operating  level. Score  between  57-­‐70 Scores  in  this  region  suggest  that  your  organization  has  begun  to  adopt  a  faster,  leaner  and  more  flexible   approach.  You  can  expect  to  see  that  some  effective  practices  are  in  place,  and that  older  structures  and  systems  are  being   changed  to  move  more  quickly.  The  leadership  challenge  is  to  make  sure  that  the  shift  to  new  ways  of  working  doesn’t  result   in  people  losing  focus  on  keeping  the  business  healthy,  and  to  continually  reinforce  the  new  ways  of  working.  Some  parts  of   the  organization  have  learned  to  move  faster  and  become  more  adaptive,  while  others  are  probably  still  reflecting  past   glories. Score  over  71 Your  organization  appears  to  be  embracing  many  of  the  practices  that  work  in  the  transient  advantage  economy.   I’d  love  to  hear  from  you!  In  particular,  it  would  be  interesting  to  know  how  your  company  decides  what  remains  stable  and   what  should  be  more  dynamic.  In  addition,  when  it  is  time  to  move  on  from  a  past  advantage.