In my opinion, I don’t think sustainable competitive advantage really exists, so the answer is no. More accurately, it exists according to the following definition:
“Sustainable competitive advantages are company assets, attributes, or abilities that are difficult to duplicate or exceed; and provide a superior or favorable long term position over competitors.”
How long is “long term”? From the evolution of economy is that the “long term” time frame is becoming shorter and shorter. According to Professor Richard Foster from Yale University, a company’s average time on the S&P500 is about 15 years today, in comparison to 67 years in the 1920s (http://www.bbc.com/news/business-16611040). This indicates the competitive advantages are sustained for a shorter period today than about 100 years ago. If the timeframe of competitive advantage becomes shorter and shorter, is any advantage really sustainable?
Keeping up with the future
The more that technology advances, the faster the competitors catch up. Therefore, the only way to create a competitive advantage is to evolve faster than the competitors. In other words, instead of relying on sustainable competitive advantage, innovate a newer advantage that the competitors will then need to catch up on.
Because of this, I don’t think UX, Design Thinking, Lean Start Up, or any other competency can generate “sustainable” competitive advantage. Instead, I believe these competencies can generate an advantage until competitors catch up with the competency. In the same way, enhancing the work environment by offering childcare in the facility, free food, or utilizing the 80/20 time model (where 80% of the employees’ time is used to work on projects assigned to the role and 20% of the time is dedicated for the employee to work on a project of their choosing) can lead to happier employees, with better work morale who will work harder and have a personal investment in the company’s growth. Still, these advantages may only be temporary, as competitors who apply the same models may have similar results.
UX is a part of today’s advantage
Forester research have done research showing that customer experience (basically the same as user experience according to Don Norman’s definition) is an important driver of companies’ revenue and can function as a determinant to revenue growth among companies in an industry. Based on this, I can say with confidence, that UX is an advantage for today and will be important in the future as well, but I cannot say a company investing in UX today will sustain that competitive edge in five years.
The company of the future
So how does a company make sure to evolve faster than their competitors? I believe it consists of three steps: extract ideas, nurture the ideas, and evaluate harshly.
Promote and encourage ideas from where ever they may come. It doesn’t matter if it is the CEO or the intern, make sure the company can foster a culture that extracts and respects these ideas from everyone. In the same way, it does not matter if specific methodologies are used such as The Lean Startup, Design Thinking, or something else. Also, these ideas can be anything from a new revolutionary service or very basic, such as how the scrum meeting can be run more efficiently.
Whenever an idea emerges, make it a priority that the organization look into it. This should be done even if the idea is completely irrelevant to the core business and outside their comfort zone. An idea that is not entirely consistent with expectations of one company can be the beginning of a collaboration with another organization.
As the idea has emerged, make sure to protect it and nurture it so that there is a chance for it to evolve before critically evaluating it. I am not saying to keep a bad idea around for a long time, but allow it to live for a little. You don’t need to build anything, but make sure to talk to different employees about it and see how they think it can flourish into something stronger. At this point it can also be beneficial to detach the “founder” of the idea and to make sure it becomes an idea of the organization. This will help it grow and possibly morph into something better than what the “founder” had in mind. In addition, this will help evaluate the potential of the idea by assessing others’ interests in being a part of its growth.
Once the idea has grown just enough to sustain some criticism, make sure to put it to the test and be brutal. At this point, you want to make sure you don’t waste resources on a poor or even mediocre idea. You want to be able to focus the maximum amount of resources to the great ideas. If the idea passes the “good on paper” state, the next step is to keep on evaluating it harshly throughout the project.
Begin to solve the most challenging task first. If you can’t solve the most challenging task, there is no reason to solve the others. As an example, back when the space race occurred, the most important thing they had to solve was to be able to launch something into space. It would not have mattered if they had been able to design a space suit if they could not get a rocket up into space.
User experience is currently providing a great competitive edge, but we don’t know for how long this will last. Because of this, it is important for companies to evolve faster than their competitors. My suggestion is to focusing on extracting ideas, nurturing them, and evaluating them harshly.
Just remember that sustainable competitive advantage does not really exist. Hence, my suggested approach (of extracting ideas, nurture ideas, and evaluate harshly) also needs to evolve to maintain a competitive edge in the future.
© David Juhlin and www.davidjuhlin.com, 2016