Competing on the Edge

Thabo Mosala

Competing on the Edge

Competing on the edge contrast with other approaches to strategy that assume clear industry boundaries, p y , predictable competition, or a knowable p , future.

The underlying insight behind competing on the edge is that strategy is the result of a firms organising to change constantly and letting a semicoherent strategic direction emerge from that organisation.

Models of strategy
Five Forces Core Competencies
Firm as a bundle of competencies

Game Theory

Competing on the Edge

Industry in rapid unpredictable change npredictable

Assumptions

Stable industry Structure Str ct re

Industry view as dynamic oligopol d namic oligopoly

Goal Performance Driver Strategy

Defensible position Industry structure

Sustainable advantage Unique firm competencies

Temporary advantage Right moves

Continuous flow of advantages Ability to change

Pick i d Pi k an industry, pick a strategic position, fit the organisation Profits

Create a vision, build C i i b ild and exploit competencies to realize vision Long-term dominance

Make h right M k the i h competitive and collaboration moves Short-term wins

Gain h edge, i G i the d time space, shape semicoherent strategic direction Continual reinvention

Success

Semi-coherent
Where do you want to go? How do you get there? What is the results?

Attributes of the edge of chaos

Complicated behaviours i.e. Execution and innovation A few rules Work is required to maintain balance on the edge of chaos Surprise exist Mistakes occur

Playing the improvisational edge

Dilemma: Adaptively innovate and consistently execute
Management Practices
Foster culture of frequent change in the context of few strict rules Keep most activity loosely constructed but rely on critical structure points of priorities and targeted measures, real deadlines, and major outcomes Create channels for realtime, fact-based communication within and across groups

Results
Self-organised behaviour Well-positioned and sometimes surprising product line Complicated and unpredictable strategy

Key concepts
Adaptive culture Semi-structures Real-time communication

Coadaptive edge
Dilemma: Collaborative synergies and individual success
Management Practices
Locate decision making about collaboration across businesses where shortterm tactics and long-term strategy meet Narrow target areas for collaboration to specific categories of high payoff Create roles for each business-dont drive cross business collaboration with egalitarianism

Results
Lower costs Faster speed Enhanced resilience Unique business strategies Dominance in highhigh potential markets

Key concepts
Nexus of strategy/tactics Focussed collaboration All businesses are unique

Regenerative edge
Dilemma: Exploit old and explore new
Management Practices
Blend the best of the past with something that is new Carry a critical mass of experienced people forward Balance risk-taking by rearchitecting and recombining Break up strategies, customers, resources, and , , products into independent modules

Key concepts
Speeding the blend Blend the old and the new Critical mass of p p people modularity

Results
Extended profitability in established businesses Effectively diversify into new growth opportunities

Experimentation edge
Dilemma: Commitment to a future and flexibility for the future
Management Practices
Craft a vision of the business not the industry Probe the future with a wide-variety of low-cost probes across multiple time horizons Where appropriate, measure the probe results and use these to shape strategic direction Frequently revisit the future without investing too

Key concepts
Vision of the business Wide variety of low-cost probes Constant but thin attention

Results
Insight into possible futures Anticipatory moves Flexible strategy constant

Growing a competing on the edge strategy

Start with the current business Flesh out the current business Regenerate from the past, experiment with the future Ti pacing Time i

Rules of competing on the edge

Advantage is temporary Strategy is diverse, emergent, and complicated Reinvention is the goal Live in the present Stretch out the past Reach into the future Time pace change Grow the strategy Drive strategy from business level Repatch businesses to markets and articulate the whole