NEW YORK – The strategy frameworks that are used in boardroom discussions and executive meetings are built on tools that were designed for a different era. From "five forces" to "core competencies," virtually all strategy methods are based on a single dominant idea: the purpose of strategy is to achieve a sustainable competitive advantage. This idea is strategy's most fundamental concept. It's every firm's Holy Grail. And it's no longer relevant.
In The End of Competitive Advantage: How to Keep Your Strategy Moving as Fast as Your Business, Columbia Business School Professor Rita McGrath takes on the fundamental notion of sustainable competitive advantage – and argues that executives need to stop basing their strategies on it. She offers a perspective on strategy that is based on the idea of transient competitive advantage: that to win in volatile and uncertain environments, executives need to learn how to exploit short-lived opportunities with speed and decisiveness.
According to McGrath, the deeply ingrained systems that executives rely on to extract maximum value from a competitive advantage are liabilities – outdated and even dangerous – in a fast-moving competitive environment.
Based on her research and work with firms like General Electric, Qualcomm, Novartis, Underwriter's Laboratories and IBM, McGrath defines the new transient lifecycle of competitive advantage and shows how firms can manage through it by using her updated philosophy. Her book is peppered with examples of global companies such as HDFC Bank, KrKa of Slovenia, Infosys, and Brambles of Australia. McGrath's new playbook for strategy helps companies with:
- Continuous Reconfiguration: How companies can build the capability to move from arena to arena, rather than trying to defend existing competitive advantages.
- Using resource allocation to promote deftness: How companies re-allocate assets quickly and re-organize fast.
- Building an innovation proficiency: How to make innovation a continuous, core, well-managed process rather than the episodic process it is in many companies.
- Leadership and mind-set: As the pace of competition becomes faster, decisions that are made quickly and in "roughly right" mode are likely to beat a decision-making process that is more precise, but slower.
- Personal meaning of transient advantage: How leaders and employers should be thinking about personal career strategies in light of transient advantages.
The End of Competitive Advantage offers a bold new set of principles for competing and winning in volatile and uncertain environments. To learn more about Professor McGrath, her past publications and new book, please visit http://www.ritamcgrath.com.
To learn more about Professor McGrath's esteemed faculty colleagues at Columbia Business School, please visit http://www.gsb.columbia.edu.
About Columbia Business School
Led by Dean Glenn Hubbard, the Russell L. Carson Professor of Finance and Economics, Columbia Business School is at the forefront of management education. The School’s cutting-edge curriculum bridges academic theory and practice, equipping students with an entrepreneurial mindset to recognize, capture, and create opportunity in a competitive business environment. Beyond academic rigor and teaching excellence, the School offers programs that are designed to give students practical experience making decisions in real-world environments. The school offers MBA, Masters, and PhD degrees, as well as non-degree Executive Education programs. For more information, visit www.gsb.columbia.edu.
About Rita McGrath
Rita Gunther McGrath, a Professor at Columbia Business School, is a globally recognized expert on strategy in uncertain and volatile environments. Her thinking is highly regarded by readers and clients who include Pearson, Coca-Cola Enterprises, General Electric, Alliance Boots, and the World Economic Forum. She is a popular instructor, a sought-after speaker, and a consultant to senior leadership teams. She was recognized as one of the top 20 management thinkers by global management award Thinkers50 in 2011. She’s also been recognized as one of the top ten business school professors to follow on Twitter (@rgmcgrath). In 2009, she was inducted as a Fellow of the Strategic Management Society, an honor accorded those who have had a significant impact on the field. McGrath is the author of three books in addition to The End of Competitive Advantage.