The 6th Dimension of Competitive Advantage

high jump photoThe previous blog entry is incomplete.

There is a sixth dimension for ever-increasing competitive advantage. This sixth dimension is a firm’s capabilities to improve. Along this dimension, there is an infinite supply of possibilities, thus firms do not compete in a state of scarcity. However, a firm must provide the environment and the tools conducive to sustainable improvement.

A firm’s culture (accepted behavioral norms) must support all employees in their pursuit of the implementation of improvement ideas. And improvement methods must be ingrained in daily habits at all levels of the firm from the frontline to the executive suite. All employees should be “on alert” to continually seek out, find, and implement improvements with positive financial benefits. A firm has the accountability to establish channels for the thousands of improvement ideas to be vetted, integrated, and executed with a high degree of coordination.

The truly advantaged firm develops or adopts innovative ways to improve at least one step ahead of its competitors. The concept of first to market applies here. The first among industry competitors to successfully implement an effective improvement method will gain significant advantage. The first to find the holy grail, a truly sustainable improvement method, will achieve long term sustainable advantage.

So, 6 dimensions exist for ever improving competitive advantage not just 5. The sixth being the capability to improve in advance of all others.

4 responses to “The 6th Dimension of Competitive Advantage

  1. Many firms today do not operate as teams but rather as a collection of individuals. For example, little mentoring is provided to younger employees because you cannot charge the client/customer for it. Additionally, companies express little loyalty to their employees, treating them as fungible (even though it is very expensive to replace an employee). Do you agree and if so how does this observation fit into your “sixth dimension” theory?

  2. Very good writeup, but I like to think there’s 11 dimensions.

  3. Doug, I find infinite variety when it come to corporate behavior. Many firms do have a culture that values roughed individualism over team work. And as you would expect, many firms value teams over individuals. I think this paradox fits well within the concept of the 6th dimension. The key word is “value”. I find that in the more successful firms, people and their ideas are valued no matter how they are delivered – individually or by teams.

  4. A firm’s ability to improve is an extremely critical component for successful change management. But funnily so as it is not a quantifiable factor the academics have not addressed it (atleast I haven’t come across it so far). It is combination of will power and competence. Thanks for introducing this very interesting concept. Hope it makes it to mainstream management literature. I would love to see it fleshed out some more.

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