David Reyero – March 2014
The search for sustainable competitive advantages has been a strategic focus for many companies, even before it was conceptualized by Michael Porter in the 1980s.
“Traditional” strategies provide some solutions: cost optimization, product or service differentiation, brand reputation, specialization, diversification, possession of patents, monopoly situations or the existence of a highly qualified professional team.
In the present article I will focus on the aspect of the team as a key element of competitiveness, as I believe that this is what really makes the difference in achieving good results in the long run.
What are the key elements to create sustainable competitive advantages through people?
This is an essential precondition for success in an increasingly competitive market. In my almost 20 years of professional experience I have been fortunate to work directly and indirectly with a wide range of different teams in a wide range of sectors and situations and I have come to the conclusion that leadership, commitment and learning agility are essential ingredients in team-building.
There are other aspects such as the level of technical skills, experience and good business knowledge or others that, albeit important, do not make so much difference and, indeed, are also more readily copyable.
This may be particularly visualized in situations of crisis and change, in which companies seek multifaceted professional at all organizational levels:
– Leadership: shared vision, courage to make decisions, excellent direct or indirect people management
– Commitment: a strong link with the organization with a focus on mutual benefit, not just rationally (on the basis of position, compensation or organizational status) but also emotionally (alignment with the team, style, vision and organizational values) and transcendentally (scope for personal self-realization), which generates a clear desire to stay on long-term and a suitable attitude to manage varyingly complex situations.
– Learning agility:: in a permanently changing and increasingly ambiguous environment, we need people who are open to the world, with intuition and vocation, a positive attitude and the ability to evolve continually (learning and unlearning).
Such elements provide us with a good starting point to create a winning organizational culture with competitive advantages which are hard to imitate, given the shortage in the market of professionals with the three aforementioned traits: there is a lack of genuine leaders in many companies, the professional commitment level has progressively declined in recent years and there are few employees with the capacity for swift new-skill learning and continuous individual transformation.
The attitude of a team in the face of success and failure makes all the difference in the long term and this is clearly seen in complex environments such as today’s.
This is well reflected by Terry Bacon and David Pugh in their highly recommendable book entitled: “The Behavioral Advantage: Successful Companies Do Differently to Win in the B2B Arena”, which introduces the novel concept of “behavioral differentiation”: the attitude of the team as a key element in strategy differentiation in the face of competitors.
To conclude, here are a few reflections from Jerry Porras’s book “Success Built to Last” which defines some of the most common elements in individuals and companies whose vocation is to make a difference in the marketplace:
– Interest in leaving a legacy, with a clear and deep sense of the raison d’être of both the company and the work of individuals.
– Lasting professional relationships with a vocation to serve other people
– Daily work focused with courage, responsibility, passion and accountability, complemented by a different way of thinking.
– Orientation towards action, combining boldness with discipline and long-term vision.
I hope that these ideas will inspire you as to the importance of people-management, which is a complex but fundamental challenge for any self-appreciating company.