In a world that values exploitation, people on the front lines are rarely rewarded for telling managers or senior executives that a competitive advantage is fading away. Better to shore up an existing advantage for as long as possible, until the pain becomes so obvious that there is no choice. That’s what happened at IBM, Sony, Nokia, Kodak, and a host of other firms that got themselves into terrible trouble, despite ample early warnings from those working with customers.
To compete in a transient-advantage economy, you must be willing to honestly assess whether current advantages are at risk. Author Rita Gunther McGrath offers these checks for eroding advantages:
• I don’t buy my own company’s products or services.
• We’re investing at the same or higher levels and not getting better margins or growth in return.
• Competition is emerging from places we didn’t expect.
• Customers are finding cheaper or simpler solutions to be “good enough.”
• Customers are no longer excited about what we have to offer.
• We’re not considered a top place to work by the people we’d like to hire.
• Some of our very best people are leaving.
If you nod in agreement with four or more of these, that’s a clear warning that you may be facing imminent erosion.
