What is Dynamic Advantage?
Most executives and managers have been trained to think about the strategy of the firm from the perspectives of the competitive forces that characterize the industry and the core capabilities and resources that they command; informed by prior experience, continuously improving execution, assuring investors that future earnings are secure by hitting forecasts and consistent incremental growth. That the traditional model is broken is widely accepted, and amply demonstrated by the massive swings in value capture by notable new companies and by the dramatic, rapid value destruction that has moved household name corporations from global dominance to bankruptcy in a few short years. Despite its short-comings the approach remains dominant as day-to-day momentum requires the use of a commonly accepted approach and stakeholders, firm leaders, investors, analysts and educators have no comprehensive alternative model.
Professor Christensen pointed the way towards a new model when he explained how 'industry disruptors' are able to overturn established competitors by targeting parts of the market with new business models that the incumbents struggle to respond to without abandoning assumptions, experiences and resources bases that have previously made them successful - and then how the disruptors succeed in driving the evolution of the market in the new direction. Professor Christensen explained that incumbents need to start thinking like disruptors, famously noting that "the only way to peer into the future is through the lens of a good theory." Dynamic Advantage is a complete integrated model that firm leadership and investors can embrace to maximize value creation and capture in business contexts that are fast evolving.
For firms that do orientate themselves towards winning in the unfolding future, mastery of the fundamentals of competitive strategy still remains essential. At each moment of time there are a set of forces that are determining the attractiveness of the industry and informed decisions need to be taken or implemented for the positioning the company and which competencies and resources to invest in and leverage. Firms must determine strategy and prepare capabilities in anticipation of the context of tomorrow if they are to achieve results superior to their competitors into the future. The extent to which they succeed tomorrow whilst also driving results today is the measure of their Dynamic Advantage.
Professor Christensen pointed the way towards a new model when he explained how 'industry disruptors' are able to overturn established competitors by targeting parts of the market with new business models that the incumbents struggle to respond to without abandoning assumptions, experiences and resources bases that have previously made them successful - and then how the disruptors succeed in driving the evolution of the market in the new direction. Professor Christensen explained that incumbents need to start thinking like disruptors, famously noting that "the only way to peer into the future is through the lens of a good theory." Dynamic Advantage is a complete integrated model that firm leadership and investors can embrace to maximize value creation and capture in business contexts that are fast evolving.
- Dynamic Advantage identifies the capabilities and specific mechanisms that a firm must adopt to out-perform competitors today and tomorrow;
- Dynamic Advantage identifies the characteristics required of the senior leadership team in order to succeed in orientating the firm towards the unfolding future.
- Dynamic Advantage provides a measure that is a strong predictor of the future performance of the corporation, and thus as indicator of the value of the firm. In fact the more dynamic (the faster the rate of evolution of) the business context for a firm, the better the predictive ability of the performance results relative to competitors.
For firms that do orientate themselves towards winning in the unfolding future, mastery of the fundamentals of competitive strategy still remains essential. At each moment of time there are a set of forces that are determining the attractiveness of the industry and informed decisions need to be taken or implemented for the positioning the company and which competencies and resources to invest in and leverage. Firms must determine strategy and prepare capabilities in anticipation of the context of tomorrow if they are to achieve results superior to their competitors into the future. The extent to which they succeed tomorrow whilst also driving results today is the measure of their Dynamic Advantage.