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Capabilities and Competitive Advantage

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The innovator's DNA. A major new study has highlighted the key skills that innovative and creative entrepreneurs need to develop. According to Hal Gregersen, an INSEAD professor and co-author of a six-year-long study into disruptive innovation involving some 3,500 executives, there are five 'discovery' skills you need but, he says, you don't have to be 'great in everything. A major new study involving some 3,500 executives has highlighted the key skills that innovative and creative entrepreneurs need to develop. The six-year-long research into disruptive innovation by INSEAD professor Hal Gregersen, Jeffrey Dyer of Brigham Young University and Clayton Christensen of Harvard, outlines five 'discovery' skills you need.

But, says Gregersen, you don’t have to be ‘great in everything.’ Some well-known business leaders such as Apple’s Steve Jobs and Amazon’s Jeff Bezos rely on their own particular strengths since innovative entrepreneurs rarely excel at all five discovery skills. The five key discovery skills. Competitive Advantage (Porter) explained.

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Overview. If Not Excellence, What? Tom Peters & Business Models. Better business models lead to better businesses. One critical part of building a better business model is getting your value proposition right. An excellent value proposition means that you have to be excellent at, well, something. But what? One framework that John uses a lot in his classes is this from The Discipline of Market Leaders: Choose Your Customers, Narrow Your Focus, Dominate Your Market: There’s a nice explanation of the figure here, but basically, it means that you have to choose. One important part of the diagram though, which is often overlooked, are the lines on each bar. Here’s an example, from the engineering company that I mentioned yesterday. The one common thread across all four business units is that they have customers that are willing to pay a premium for reliable delivery of on-time and on-budget work.

However, their industry is fiercely competitive. In his latest book, which, as usual, is excellent, The Little Big Things: 163 Ways to Pursue EXCELLENCE, Innovation and the Value Network. Today I will tell you why it is so hard for you to get your innovative new idea to spread quickly. Well, one of the reasons, at least. It’s because the economy is so interconnected. This is a bit counterintuitive – after all, I was just telling you how we can use networks to spread ideas. The good side of networks is that they can make it easier for ideas to spread. The problem with networks is that to get people to actually adopt your new idea, you often have to get them to break links within their existing network, and this can be very difficult. That is why it is important to understand how to build a position within the value network. Value networks show up in most of the various business model frameworks. As an illustration, here is a model of the value network for mobile phones, adapted from the book Invisible Engines by Evans, Hagiu & Schmalensee.

Apple has chosen to control everything within the circle – in other words, everything! Better Business Models Lead to Better Businesses. I read in a blog post over the weekend about someone who had switched from an iPhone to a Samsung Galaxy smartphone. Their comment on the move was something like “and I’m glad that I did, because the Galaxy is a much better phone.” What does that remind you of? It reminds me of what all of the Apple users were saying in the early 90s about Apple’s OS versus Windows – that the Apple was objectively a much better product. In both cases, the statements are probably true. From what I’ve seen, I suspect that the Galaxy is a better phone. And even though I had to use it for work, I was never a fan of Windows.

And yet, Microsoft dominated the desktop in throughout the 90s with Windows, and Apple is doing pretty well in smartphones now. It’s because their business models were better. Entrepreneurs are typically more passionate about their solution than any other part of the business model which left unchecked can become a problem. Where is all of that extra profit coming from?

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Case Studies. Innovation capabilities.