Sunday, April 10, 2011

On Individual Competitive Advantage, Part 2

In part one I said that for a business, or organization, the only true source of long term sustainable competitive advantage in highly competitive markets is organizational culture, or stated otherwise, the personality of the organization.

I defined organizational culture as the “personality” of the organization. Organizational culture is the “chemistry” that arises between the interactions of the individuals' and the organizational processes that comprise the operating framework of the firm, all in light of its leadership. Through interaction and circular feedback, this chemistry influences how individuals in the organization act and make decisions. This chemistry is difficult, if not impossible, to copy, and is the only true source of long term sustainable competitive advantage in highly competitive markets.

Culture at the individual level:

For an individual person, the integration of their personality, unique individual traits & characteristics (idiosyncrasies), values, likes, dislikes, passions, talents, knowledge, etc, and anything else that makes them unique constitutes their “individual culture”. So we will understand an individual’s culture as that which makes them unique. Can your individual culture change over time? Of course it can…. The nature of human beings is that we are constantly learning and changing.

Good researchers understand that because of this, it is very difficult to apply the research methods of the natural sciences to the social sciences. There are no constants when studying human action, in the strict sense of the word. Yes, people do have tendencies to act in certain ways, but human beings are not like a piece of rock in a laboratory setting that can be studied under the exact same test conditions each successive time. Humans continually learn and constantly adjust their Mental Frameworks.

The Importance Of Mental Frameworks:

Human beings have within their consciousness a multitude of Mental Frameworks through which they view the world and

Friday, April 8, 2011

On Individual Competitive Advantage

Why apply the concept of competitive advantage to the context of the individual person?

Competitive advantage is vital for a business, but on an individual level it is just as important, if not more so. For the individual, competitive advantage determines success or failure, if an individual achieves his goals in life, and ultimately the satisfaction one gets out of life.

I do not follow golf, but it appeared to me that, until fairly recently Tiger Woods had sustained a strong competitive advantage over just about every other pro – he consistently beat his competitors and set records (prior to self destructing, which is another story...). How did he develop this competitive advantage? From a young age he was immersed in understanding what it took to succeed at playing golf. Certainly, there was a lot of hard work and determination involved, a probable common denominator among competitive golfers. But what was the difference? Through persistence and effort he probably learned how to apply his individual characteristics, talents, and abilities into a unique competitive advantage over the competition.

The need for creating competitive advantage does not arise only out of a desire for success. When an individual or organization is not in tune with their competitive advantage, life becomes a struggle. We feel awkward, out of alignment, and out of tune with our life’s purpose. This leads to unhappiness and misery for the individual. At the business or organizational level it means bankruptcy or death. Please understand that I use the term “competitive advantage” in a positive sense. I do not intend to use it in a sense that would conjure up images of ruthlessly competitive environments or markets where only those who have some kind of “unfair” competitive advantage can survive. In this context, “individual competitive advantage” means leveraging who you are as an individual in order to achieve your goals and add value to the world in the process.
“Understand: you are one of a kind. Your character traits are a kind of chemical mix that will never be repeated in history.  There are ideas unique to you, a specific rhythm and perspective that  are your strengths, not your weaknesses. You must not be afraid of your uniqueness and you must care less and less what people think of you.  This has been the path of the most powerful people in history.” ~ From The 50th Law, by Robert Greene & 50 Cent

Individual (or Personal) Competitive Advantage is what sets you apart, it gives you an edge, it gives you confidence, and it attracts success. It is your style, your way of doing things. It brings out the best in you because it is rooted in who you are as an individual and in a deep understanding of what it takes to succeed. In short, an individual competitive advantage is a result of an optimized synthesis of your individual idiosyncrasies with the competencies that lie within a particular context.

To be successful and create a  competitive advantage you must ask yourself the following question relentlessly: How can I apply my unique individual characteristics in order to be successful? Add some passion and determination to this equation and you get a recipe for success.

Although I am not a follower or practitioner of martial arts, I can not help but admire and respect the late, great, Bruce Lee. Lee created his own style of fighting by immersing himself in training and research and understanding all the different styles of martial arts. He mastered the basics and adapted them to his personality and individual physical abilities.  He then took what he felt were the best parts of each fighting style and combined them with his own unique talents and creativity to create a new style that was aligned to his unique strengths, in an optimal way, and gave him a competitive advantage, and made him a star. Of course, we see similar patterns among the super successful in just about every context, whether it be business, sports, arts, or some other field.

Whether you are a startup internet entrepreneur who is the sole employee of your own business, an athlete looking for an edge in your next competition, an actor, actress, rock star, or a hedge fund manager, in order to achieve success you have to know how to apply your unique talents and passions to the area that you are looking to excel in. No matter what you are trying to be good at, if you want to excel over the long term you need to create your own unique sustainable competitive advantage.

A further explanation of Competitive Advantage:

When one thinks of “competitive advantage” what usually comes to mind is the business world and how a firm can develop a “sustainable competitive advantage” that allows it to consistently gain above average profits within its industry. A business without a competitive advantage is doomed and will eventually fail, as competitors will eat away at its market share. Here I refer to competitive advantage on two different levels