Developing a Sustainable Edge

Knowledge@Wharton has an interview of John Hagel III and John Seely Brownby Kevin Werbach:

Werbach: You have a new book out, The Only Sustainable Edge: Why Business Strategy Depends on Productive Friction and Dynamic Specialization. Let me start by asking what the only sustainable competitive edge is for business?

Hagel: It is the notion that increasingly executives need to think about strategic advantage in dynamic terms as opposed to static terms. While traditionally strategic advantage was based on geographic distance or core competencies, which were typically defined as static, increasingly the only sustainable edge has to do with the capacity to accelerate capability building. Companies must be able to build distinctive capabilities more rapidly than anyone else. What we focus on are management techniques that are emerging to help build that kind of dynamic strategic advantage.

Brown: It’s not just management techniques but also a set of tools that can facilitate people at the edge being able to perform serious new work, because in this rapidly changing world, you need a constantly evergreen set of capabilities. Your sustainability depends on your ability to develop these capabilities before anybody else.

Hagel: In fact, the title has multiple meanings, as anyone who knows John Seely Brown and myself will appreciate. We are never content with a single meaning. “The only sustainable edge” certainly has to do with the notion of competitive advantage, but it also has to do with the view that the ability to develop capabilities involves operating at the edge. Of course, “edge” has multiple meanings as well. It means the edge of the enterprise, the edge of business processes, geographic edges in terms of emerging economies, demographic edges in terms of younger generations coming in with different mindsets – it’s a whole set of edges that create the opportunity for accelerating capability building.

Brown: The point is that by being able to listen deeply and participate on the edge, you can pick up things before anybody else picks them up, and you can use that to accelerate your own capability building. This implies that it is not just corporate training that is important but rather rich participation with partners who are at the edge as well. One of the questions we ask ourselves is, how do you learn as much from a partner as you learn from creating something yourself. This puts a new spin on why distributed collaboration around the world might be critical in creating this sustainable edge.

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Rajesh Jain

An Entrepreneur based in Mumbai, India.