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Hyper-Competition and Differentiation

  • Artigo

It is an inevitable side-effect of globalization: hyper-competition. Markets are no longer limited to geographically-focused distribution channels; the internet and the rise of e-commerce has enabled companies, big or small to produce products and services that compete at a truly global marketplace.

 

Now that I've stated the obvious, I'll get to the point of this blog post.

 

For a company to stay competitive it must innovative: delivering novel and advanced products and services for which there is little or no equal in the marketplace. But is that enough in our global economy? Absolutely not. Innovations can and do get copied, imitated, and downright stolen; if you create something that you consider truly innovative, it would be wise to keep the champagne bottles corked and the cigars unlit because chances are, you're not the only one and you can bet you life that you won't be for long if you happen to be… So, what is the true differentiator that enables Company A to win over Company B? One very simple word: Agility.

 

Within the context of this discussion, agility, as I refer to it simply means: the ability to create and deliver value faster than the competition. Notice I didn't say 'create and deliver innovation faster than the competition' because innovation does not necessarily equal value. An excellent background treatise of this assertion can be found here. There is a lot of focus in companies to do more with less, to lower the cost of development, factor TCO and ROI, etc. Sometimes the focus on cost is so myopic because regardless of how much less it costs to develop innovation, if the competition delivers first and can continually improve and advance faster, then cost savings don't hold as much relevance.

 

Why this discussion? Well, technology historically has fostered agility. The true sweet spot for technology is when it can make you innovate faster and at a lesser cost; in this case, technology itself is an innovation and the implementers can achieve competitive differentiation by its rapid adoption and utilization. But only for a time while the competition itself ramps up because as stated before, innovation can be copied and emulated. It's a vicious circle that many executives don't understand and thus foster a hate-love-hate relationship with Information Technology. Innovation in today's world is a must and technology is a strategic enabler of innovation, yet it is a constant moving target.

 

The true mission of any player in a competitive environment is agility. It is a basic characteristic of life; the agile of the species survive, the less-than-agile die. There are so many companies out there with great potential that are very change adverse. Change is a given in a quest towards agility and that is primarily what causes IT project failure: lack of change management. This is why I am so passionate about the strategic nature of architecture within businesses as it should be their passion and drive to create an environment where change is embraced and enabled.

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