#CIPD13 – The end of competitive advantage
#CIPD13 – The end of competitive advantage: how to keep your strategy moving as fast as your business – Rita Gunther McGrath (Columbia Business School) @rgmcgrath
One-sentence summary: HR has an opportunity to step up and help create new ways of working which aren’t just essential for the survival of HR, but are essential for the survival of organisations.
The session opened by looking at the stories of Fuji Film and Kodak, of how some investors cornered the market in a key resource and inflated prices for a period of time. Once prices returned to normal, Kodak seemed to breathe a sigh of relief that the challenge was over whilst Fuji were disturbed and sought to do something different. As we know, the fortunes of those two companies have taken very different directions and it is a great reminder that ‘Nostalgia is not a business strategy’ (IDEO).
There has been a big change in the source of competition and it no longer comes from those that we regard as our competitors, it can come from anywhere.
HR can play a significant role in this new era and play a significant part in the new playbook for strategy:
– We used to live in an era of punctuated equilibrium where we had periods of stability interspersed with periods of significant change. We are in a different place now where organisations need to have ‘contiguous reconfiguration‘, where there are constant adaptations and changes. This means that we need to recruit differently, and focus on how well people can learn and adapt.
– Companies also need to practice ‘healthy disengagement‘ and find ways to exit from whole business areas and ways to manage mature or declining businesses. There are very different skills required at different stages of business.
– It is tempting to put your best people on problem solving, but the best companies will be good at ‘deft resource allocation‘ and put the best people on new opportunities.
– All too often, companies take an episodic approach to innovation and launch a few innovation bootcamps but then don’t continue with it. Innovation needs to be a system, it needs to be an ongoing process so that it can cope with waves of competitive challenges and we need to develop ‘innovation proficiency’. We need to find ways to support the innovators and asking somebody to see their idea through to completion may not be the best use of their strengths and we need to consider how best to recirculate them onto their next challenge.
– For years, some managers have said “don’t bring me any surprises” but we need to have ‘discovery driven leadership’ where we want surprises, good ones! We also need radical honesty and transparency so we don’t ever get into the situation where we have positive KPIs that misrepresent the truth.
– The whole nature of the economy and employment is changing and there is a view that we’ll have two disparate camps of people who will be part of your company for a long time and then a whole set of people who will follow a very different career path. This needs a big shift towards ‘entrepreneurial career management’.
An inspiring session which I loved as it met the sweet spot of the future, organisations, and people playing to strengths.