I am working every day with businesses that are denying that the game has changed. Many believe it is just the government that is inventing new rules. This is true in some cases, but in most the government is also simply responding to global changes. The benefit of working outside of South Africa sometimes is that I get to see the domestic manufacturers from another angle. And the truth be told: South African firms are not as competitive as they would like to believe. Yes, there are exceptions, and we hail their achievements.
Tim Kastelle published an article today titled “here’s why you need to build your innovation capability“. When my eye caught the first sub heading I almost stopped reading. It shouts “Competitive advantage is dead. Or at least dying”. Blink. I believe in competitive advantage, and I believe that firms must figure out what it is that they have to do to remain competitive. I also know that once you found a gap in the market it takes hard work to remain competitive. Being a follower of his blog I plowed on.
Wait. Don’t let me spoil a good post. you have to read Tim’s argument for yourself. He argues that it is more important to become innovative than to have a competitive advantage. This is not a new argument in itself, but I like his angle on this. He then provides some simple steps that a manager can take to become more innovative even within a rigid organizational context where innovation may not necessarily be appreciated. His logic will also apply to not-for-profit organizations that don’t believe they compete even though they have to be able to compete for funding.
Reading this article also made me think of how we idolize some of the very famous firms now, but how we tend to forget how many great firms have dissolved here in South Africa and in other developing countries. It usually starts with a refocusing, then with selling off under-performing or non-core units. Then a merger of the remains with another firm with a “strategic fit”. Then, the end. They just slip from our conscious into the past.
Let me not close so depressing. Let me rather ask: how can you use the environment as an constraint that you have to consider in your business model and your innovation process?
If it constrains you it must constrain your competitors. Can getting around this give you an edge? In other words, can you put the constraint between you and your competitors?
Then ask: what are the constraints that are on the horizon, and how can I anticipate these constraints to get them between me and my competitors?
Thinking about this often might save you the anguish of trying to adapt while under pressure to also deliver.
I wonder how your answers will challenge your current view of how competitive you really are, and how innovative you are to respond to the changes in the environment.