Utilize your unique ingredients

In the latest Fast Company magazine, there’s a story about the “The Top 50 Innovative Companies”. I bought it excitedly, but found it quite disappointing. The story focuses on the latest products or initiatives of these companies. It should be called “The Top 50 Innovations”. It tells us nothing about the companies and what has enabled them to produce these innovations.

You won’t get competitive advantage by copying what these companies have done. They probably have a completely different set of ingredients from the ones you have to work with.

When setting your strategy it’s important to understand your strengths. Today I'm going to talk about culture.

It’s been said that “Culture eats strategy for breakfast” – suggesting that it’s more important to work on your organizational culture than on your strategy.

Sure, if you have a toxic work culture, work to improve it as a priority, because if you don’t, you’ll lose your staff. But to suggest that you should choose between strategy and culture makes no sense. Culture is an ingredient of strategy.

Your organizational culture is one of those “strategic assets” I wrote about last time. It’s unique to your firm and difficult for your competitors to replicate. The question is: what does your culture enable your organization to do better than your competitors can?

It’s important to be honest about what kind of culture you have. If your culture is truly conducive to innovation, then base your strategy on being innovative, and invest in maintaining and heightening your capabilities in that area. If not, don’t pretend. Differentiate on some other basis. In time, you could perhaps create a culture of innovation, but it won’t happen overnight, or by proclaiming it on your web site. Perhaps there is something else about your culture, or some other strategic asset, that gives you an advantage over your competitors. Nurture and develop that instead.

Focusing on what competing companies have done is a way of getting stuck in precedent. Utilize your unique ingredients to create your own path.

Strategy is Like Job-Seeking

Competitive advantage comes from a combination of:
1. what you have, plus
2. how you choose to use it,
to create value for your chosen market.

The phrase “what you have” is a reference to your “strategic assets”. These are not what we normally think of as assets – land, buildings, equipment or “Our people are our greatest asset”.

Strategic assets are unique to the organization and are usually intangible things. They include:

• Intellectual property

• Acquired consumer information

• Lines of capital

• Core competencies (those that are embedded in the organization, not individual staff skills)

• Operational, monitoring, planning, communication or decision systems

• Organizational culture

• Brand awareness

• Brand image and reputation

• Secured distribution

• Relationships with suppliers, customers and intermediaries

Strategic assets are:
• Costly or difficult for competitors to acquire or copy,

• Path dependent – they result from the experience of your business and

• Firm specific – they cannot readily leave with departing staff members or be sold

Whatever strategy you choose must be underpinned by strategic assets which equip you to out-perform your competitors.

Therefore, identifying your strategic assets is a crucial step in developing a strategy.

__Strategic assets often go unrecognized. Innovative strategy depends on your ability to conceptualize your strategic assets in a creative way.__

Here's why strategy is like job-seeking. Most people looking for a job don’t recognize their own strengths. In their resume they provide a list of generic skills and qualities. Mostly, these are bland and superficially-expressed. They do not differentiate the individual from other job-seekers. It is not until they analyse the unique path they have taken and what they have gained as a result, that they can truly describe what they uniquely have to offer an employer.

Don’t get stuck in old ways of conceptualizing “what you have”. Break free from that precedent.