CULTURE: Creating Lasting Competitive Advantage

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Lasting competitive advantage is not created by being the first to buy, use, or invent a new technology. Consider the new-to-the-world AI from Chat GPT released in November 2022, then mimicked by Bard in March 2023, and by November 2023 it was in a crowd of 50+ similar technologies.

So, if not technology or patents, what will create lasting competitive advantage??It comes down to optimal, repetitive, and predictable machine and machine-like personnel behavior for a regular flow of technologies, favored products, and exceptional service.?It is asking typical employees to be consistently exceptional.?This is already daunting, and especially when considering the ranges in employee backgrounds and behaviors.

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The tool or key to unifying personnel and gaining top performance behavior is corporate culture.?Favorable corporate culture does not just happen.?It is the result of deliberate leadership.?Keep in mind, there is not just one culture, but many for nearly every aspect of the business.

So significant is organizational culture, it is one of few elements that can provide long-term competitive advantage.?Dialed in culture can’t be bought, outsourced, and cannot be simply switched on to meet a market shift.?You either have it, or you don’t.?If you don’t, by the time you get it, your customers or the broader market may have moved on to a competitor, product, or service that does.

Culture is known to be nearly impossible to replicate.?The power of a well-established, market differentiating culture extends across every element of a business and can last for decades, far longer than technologies, patents, and personnel.

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Business results stem from the cooperative actions of individuals to create value in the market.?As such, the first cultures to establish are leadership cultures.?With these cultures, employees know their purpose and feel valued and key to the business’s success.?In return, there are increases in retention and full commitment of will and skill.

Cultures can then expand into the science of business with improved urgency, safety, task and process skill, quality, and compliance.?Then into the art of extra mile customer service, more ideas and innovation, greater agility and speed, and more institutional knowledge and wisdom. Ultimately, there is repetitive and consistent product and service differentiation recognized by the market and given long-lasting and top brand positioning.

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Once unifying cultures are established, employees begin to teach and monitor each other for culture abidance, freeing management to focus on more strategic and competitive initiatives.?Another way culture fosters true, long-lasting competitive advantage.

Given the criticality of culture, for me as a corporate executive, setting and sustaining appropriate and competitive cultures is a top and strategic priority.