It’s one of the most accepted truisms of business strategy: You should pursue a sustainable competitive advantage. It could take the form of a unique business model, a proprietary process, special skills, or any number of things that allow you to dominate your competitive space. That’s the gold standard of strategy.
And it’s a lie.
There’s no such thing as a sustainable competitive advantage. Blackberry didn’t have it. Blockbuster didn’t have it. Kodak didn’t have it. Borders didn’t have it. Yahoo didn’t have it. Do I need to go on?
Help me out here. Exactly which companies do have a sustainable competitive advantage?
There is no such thing. And how could there be? Societal factors change, technology evolves, markets are in flux. The entire context within which any business operates is always subject to change.
And if you think you have a sustainable competitive advantage you get complacent. You take your foot off the gas. You become vulnerable.
If you’re pursuing a sustainable competitive advantage you overlook the very thing that strategy is truly about: continually creating temporary competitive advantages. Because the one assumption you can make in business is that any advantage you have will be copied, leap-frogged or made obsolete. That’s why smart companies constantly experiment. So they can create new competitive advantages. Sure, they won’t last forever, but they don’t have to.
Some people are uncomfortable with all of this. As a last gasp they’ll say that ongoing innovation is the one true sustainable competitive advantage. Sorry to disappoint you: No. Your innovations might be met with a collective shrug by the marketplace. No advantage in that. Or they might prove to be too costly. Or too dependent on factors outside of your control. So what we’re left with is that ongoing innovation provides a sustainable competitive advantage only if it can be translated into a sustainable competitive advantage. Hmmm, not much help.
Forget sustainable. Embrace temporary. Let your competitors live the lie. You keep experimenting.
Make it happen.