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Continuous reconfiguration in the transient advantage economy

Rita Gunther McGrath (Professor at Columbia Business School and the author of The End of Competitive Advantage: How to Keep Your Strategy Moving as Fast as Your Business (Harvard Business Press, 2013). Together with Ian MacMillan, she pioneered “discovery-driven planning,” a framework for strategy development in new business venturing and co-authored Discovery-Driven Growth (Harvard Business Press, 2009).)

Strategy & Leadership

ISSN: 1087-8572

Article publication date: 30 August 2013

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Abstract

Purpose

The author identified a set of companies that have figured out how to cope, even to thrive, within the new transient advantage economy and explains how they did it.

Design/methodology/approach

Her research team analyzed nearly 5,000 companies. Of that whole population, only ten companies were able to grow their net income by at least 5 percent a year for ten years in a row. These ten “outliers” have out-performed competitors while adapting to rapidly changing market forces.

Findings

Organizations that have mastered transient-advantage environments have learned to continually free up resources from old advantages in order to fund the development of new ones. Additionally, innovation is continuous, mainstream and part of everyone's job.

Research limitations/implications

The 5,000 companies analyzed included every publicly traded firm on any stock exchange with a market capitalization of over $1 billion. The article studies the practices of the ten most successful over ten years.

Practical implications

The most successful firms, over the entire study period, had no dramatic downsizings, restructurings or sell-offs.

Originality/value

The author found that the key leadership and management challenge is maintaining an organizational system that can manage the complementary forces of innovation and stability.

Keywords

Citation

Gunther McGrath, R. (2013), "Continuous reconfiguration in the transient advantage economy", Strategy & Leadership, Vol. 41 No. 5, pp. 17-22. https://doi.org/10.1108/SL-05-2013-0039

Publisher

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Emerald Group Publishing Limited

Copyright © 2013, Emerald Group Publishing Limited