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| John Votava Gaining an edge in the new economy

Rita McGrath 960x528Rita McGrath 960x528Rita McGrath 960x528

As companies jockey for position in an ever-more-competitive world, the edge they gain will likely be fleeting. How does that affect the workplace and the people in it? We sat down with Columbia Business School professor and author Rita McGrath to talk about her concept of the “transient competitive advantage.”

So what is transient competitive advantage?

The basic idea is that in the past we used to think of competitive advantages as being created and then lasting a long time. What we’re finding in today’s environment is you have an advantage which you get to enjoy for a while, but then competition moves in and it becomes much less enduring. The challenge becomes creating pipelines of competitive advantage rather than one thing that lasts forever.

To what extent are companies embracing this strategy?

It’s not a choice. No one gets up in the morning and says they want to compete that way. You’re pushed into it. If people could just have one advantage and then exploit it forever, they would prefer that.

What effect does this have on the workplace?

There are two vectors. One says the key to creating a sustainable advantage is our people, so we are going to treat them super-well and leverage them with every bit of technology to make them as effective as possible. The other vector says our competitive advantages are short and you, the employee, are only as good as your next big idea. We are going to extract the absolute most we can out of you. This can create an exciting workplace, but also a very demanding workplace. The consequences of this becomes almost a winner-take-all phenomenon, where the very most sought after companies and the best people gravitate toward each other. You can see a division in the marketplace in terms of the employment contracts people are willing to create.

How does that play into the “gig economy”?

Very much. The “tour of duty” is a good way of framing it, where you sign on for a particular task or project and you work until that is brought to its natural conclusion. And then you decide whether you want to stick around and take on the next challenge or change and do something else.

How do these changes affect employees?

The first thing is that coming to work and doing your job is no longer going to be a path to success. You really need to go beyond whatever it is you are assigned day to day. We all become entrepreneurs, and that is something a lot of people are not very well prepared for. People need to be able to generate their next opportunity and need to think about how they can add skills.

What technology tools for employees best fit this approach?

Well, they’ll tell you. Millennials, for instance, will bring their own technology, their own tools to bear in the workplace. Certainly mobile is going to be big. Robotics will be important. And technologies like 3D printing are going to change the way we think about physical things.

Do you see millennials adapting well to this business environment?

Millennials are very fluid with technology. They are very adaptable, they embrace new technologies, and they are eager to think about new ways of doing things. Where they may struggle is with the empathetic connection, the human side, which is very important. And there is an impatience in many millennials that could get in their way. But what is great about millennials is that they are pushing companies to define a purpose beyond just coming to work every day and making money.

So the future is bright?

Yes. While jobs are likely to be very competitive in the future, it is very rich for learning, for new skill development, and for individual empowerment. Skilled people may be able to step away from work for a while to pursue their own interests, then come back in and do different things over various “careers” they may have. And employers will be making their workplaces engaging, rich, and developmentally friendly in order to get the best people.

Rita Gunther McGrath, Columbia Business School professor and author, is a globally recognized expert on strategy in uncertain and volatile environments. She has written three books, the latest of which is The End of Competitive Advantage: How to Keep Your Strategy Moving as Fast As Your Business.

 

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