Monday, August 22, 2005

3 Books on Competitive Advantage

By Moje Ramos-Aquino, FPM
Paradigms & Paradoxes Corporation

EARLY WARNING: Using competitive intelligence to anticipate market shifts, control risks, and create powerful strategies
By Ben Gilad
(American Management Association)

WORLD OUT OF BALANCE: Navigating global risks to seize competitive advantage
By Paula A. Laudicina

THE ANSWER TO HOW IS YES: Acting on what matters
By Peter Block
(Berrett-Koehler Publishers, Inc)

Two ways to define our strategy: deterministic (based on what happened in the past and what is happening now and what might happen in the very near future and based on what competition is doing best right now) and exploitative (based on what the near and far future have to offer and based on what competitor might do next).

Obviously, you can’t have much competitive advantage if you are near sighted and internally focused. Look at what’s happening to Levi’s now. Maybe they are still doing a SWOT analysis. Mikhail Gorbachev once said, “If what you have done yesterday still looks big to you, you have not done much today.”

Author Ben Gilad recommends uncovering competitors’ blinders, instead. “First, it requires a serious intelligence capability. This is not equivalent to having a large information center or one of those “knowledge sharing” projects, the new pet toys of the large Knowledge Management “practices.” It is neither tantamount to nor derived from market research capability; the two disciplines, market research and competitive intelligence, differ widely. For a company to be able to get into its competitors’ blindspots, it needs real intelligence expertise.

“It is not always possible, however, to gain a direct window into competing executives’ mindsets. Sometimes, when the competitors are private companies or small upstarts or just secretive, no published information is available. In these cases, an indirect approach is still available. This approach infers assumptions from observed behavior. The indirect inference method calls for asking a simple question in regard to competitors’ strategic moves: “Why are they doing this?” This question is a gate to a wealth of possible explanations.

“Identifying competitors’ blindspots is a powerful weapon. It allows a company to execute actions with a significantly reduced risk of retaliation. It is especially compelling in identifying opportunities for first-move advantage, before competitors’ can see them. The story of how the famous Xerox’s Park laboratory invented some of the most popular technologies—the mouse, the graphic interface used in Apple’s and later Microsoft’s operating systems, and the desktop home printers—and never realized their potential is a classic example of how blindspots can yield powerful benefits to those who uncover them.”

Gilad further writes, “There are few surprises in life, but there are many blind executives who confuse their own grand visions with reality and then make others pay for their confusion.”

Author Laudicina observes that a vast majority of companies today lack the means to identify and manage external risks and find themselves without bearings in this increasingly complex world. He adds that instead of risking a devastating shipwreck, many captains of industry keep their corporate ships stubbornly docked at shore.

“Executives and companies can—and should—undertake expansion strategies even when external uncertainties and shocks can have as much impact as traditional industry dynamics. With the most promising opportunities located outside home markets and far from familiar territory, hiding from risks is simply not an option. Instead companies must use that telescope, scan distant horizons, and try to make sense of the complicated world. They must bring insights about the external environment into the planning process in order to spot and act on new opportunities and avoid emerging threats—to understand the external world in order to engage it.”

Some of these drivers of change in the external environments are: globalization, demographics, the new customer, natural resources and the environment, regulation and activism. “These drivers sketch a picture of an increasingly complex world in which change is endemic. But they also serve as a framework for understanding and making sense of the changes that matter most.”

Finally, author Peter Block reflects, “Citizenship means that I act as if this larger place were mine to create, while the conventional wisdom is that I cannot have responsibility without authority. That is a tired idea. Let it die in peace. I am responsible for the health of the institution and the community even though I do not control it. I can participate in creating something I do not control.”

“We begin with the costs of asking How? too quickly or too eagerly. When we ask how to do something, it expresses our bias for what is practical, concrete, and immediately useful, often at the expense of our values and idealism. It assumes we don’t know, and this in itself becomes a defense against action. Getting the question right may be the most important thing we can do. We define our dialogue and, in a sense, our future through the questions we choose to address. Asking the wrong question puts us in the philosopher’s dilemma: We became the blind man in a dark room for a black cat that is not there.”

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