Transitions: Secret Sauce to Capability System

Transitions: Secret Sauce to Capability System

It seems like just yesterday it was possible to have something SO UNIQUE that customers clamored to you and away from your competition. While it’s still possible, the likely reality your organization is facing today is one of temporary advantage and hyper competition. In today’s episode, David and Justin discuss how organizations can compete and win if they think in terms of delivering a capability “system” instead of just relying on their old “secret sauce”. Here are the notes from the show:

  • Differentiating value is “whatever you offer that is unique, or if not unique, you execute it better than your competition”
  • The question “how are we different” is often too tough of a question to answer – and that’s a problem
  • When organizations are interconnected, there is the possibility of using outside partners as critical elements to the capability system you deliver. Augmenting, upscaling, adding unique value, many times comes from the combinations of capabilities, some internal and some connected to you in unique ways that will be the differentiating value of the future
  • As the authors of Remix Strategy say in their introduction to this set of ideas: In today’s fast-paced, interconnected business environment, this remixing of assets is fundamental to competitive advantage. It brings in new ideas, provides access to new capabilities and markets, and let’s companies leverage what they do best.”
  • Modern day examples: Nike & Apple, allrecipes.com & retail stores
  • As leaders, we need to view or organization like an interconnected body instead of an independent machine
  • Consider alliances, joint ventures, partnerships, outsourcing, M&A, licensing as ways to expand your “capability system”
  • Three principles important to building and sustaining capability systems:
    • Create joint value
    • Governance
    • Share joint value
  • See Romans 12 –For each of us has one body, with many members, and these members do not all have the same function, we, though many, form one body and each member belongs to the other.”

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