Quote of the week

“In bleak times and fair, the success of a company’s strategy often depends greatly on the strategies of its competitors.”

--Hugh Courtney, John T. Horn and Jayenti Kar, "Getting into your competitor’s head," The McKinsey Quarterly, February 2009

What is a competitive advantage and how do you build one?

by Michael W. Van Belle, Senior Vice President and Chief Financial Officer of The High Companies

A competitive advantage is the result of distinct competencies that allows an organization to be successful. These competencies allow the company to better serve the end customer and thus make the company the preferred choice of the market. In order for these competencies to be sustainable, they must be unique (not possessed my many), not obvious, and difficult to reproduce. Competitive advantages are based on a combination of resources (such as patents, proprietary knowledge, reputation, etc.) and capabilities (the internal processes and informal ways-of-working)-- provided these resources and capabilities allow a company to better serve the customer.

To build a competitive advantage, you must first fully understand your marketplace and customer requirements. No matter how well your internal processes perform or how many patents you hold, if the end result is not something desired by the customer you will not have a competitive advantage. The following article is a great example of understand what is important to the customer and using it to make a competitive advantage: "Great Service: The Ultimate Competitive Advantage."

Second, a company must fully understand its own abilities and opportunities to combine their efforts and effects in a way that is not a common practice. Lastly, there must be a way to protect the competencies developed. Often this is done through building relationships, patents, and trade secrets. A review of competitive advantage as defined by Michael Porter is available at this site.

Strategy implementation – From the shelf to the shop floor

by Michael W. Van Belle, Senior Vice President and Chief Financial Officer of The High Companies


At The High Companies, our strategic implementation involves many activities as described above; however, there are three processes that have significant impact:

1. Capital Budgeting Process

2. Cascading Objectives / Performance Planning Process

3. Policy Deployment

The capital budgeting and performance planning processes both specify how the company will utilize its two most valuable resources to accomplish its goals. They also help the management teams understand how much can be accomplished in a specific time period.

Policy Deployment (PD) gets into the tactics and operational plans of the strategy implementation. (PD) Initiatives are developed that will yield the financial and market results in a 3-5 year time period and support the strategy. These initiatives are assigned goals on an annual and monthly basis. Regular assessment of results against goals is a means that helps us understand the success of our strategy implementation. The budgeting process and performance planning process aligns the resources with the specific activities developed in Policy Deployment.

The implementation and execution of strategy is just as difficult and just as important as making the strategy. More information on strategy implementation and execution is available:

Business Strategy: Execution Is the Key by Lawrence B. Hrebiniak at the Wharton School of Publishing

What Is Strategy Acceleration and How Can It Help My Organization? by Gayla Hodges at Fast Company

Planning an Effective Policy Deployment Process by Jill Jusko at Industry Week