When functions such as marketing, sales, finance, IT, human resources and R&D all have their own area of special expertise, they end up competing against each other. Each initiative claims it is critical to the success of the organization, yet their competition puts that very success in jeopardy.
Booz & Company's new book on strategy, The Essential Advantage: How to Win with a Capabilities-Driven Strategy, by Partners Paul Leinwand and Cesare Mainardi argues that many companies need to approach strategy development in a fundamentally new way. In the relentless quest for growth, companies can wind up stretching their organizations too thin by playing in too many disparate markets and pursuing strategies that undermine rather than reinforce one another. At worst, this approach leaves a company without a right to win in any of its markets. Coherent companies, on the other hand, start by clarifying the company’s fundamental identity, based on what it does best and how it creates value for customers. Then they hone a distinctive system of capabilities – one that competitors cannot easily match – to deliver that value and build a lasting competitive advantage.
The Essential Advantage has been published by Harvard Business Review Press in December 2010.