Sharper your differentiation, the greater your advantage. Successful companies build their strategies on a few vivid forms of differentiation that act as a system and reinforce one another. They grow in ways that exploit their differentiators by replicating them in new contexts. These sources get turned into routines, behaviours, and activities that are accepted and reinforced by the organization as a whole. Differentiators offer profits only when they are supported by simple, non-negotiable principles and robust learning systems that drive constant improvement company-wide.

Key ConceptsEdit

  • Understanding your sources of differentiation. Need a systematic approach to understanding your sources of differentiation to enable an agreement on what distinguishes your company from competitors. Rate the success of your companys past 20 growth investments and determine their commonalities. Deliberate and determine if they are i) truly distinctive ii) measurable against competition iii) relevant to what you deliver iv) mutually reinforcing v) clear at all levels of the organization. Identifying these are important for focusing innovation
  • Growth based in differentiation. Best way to grow is usually by replicating your strongest advantage in new contexts. Repeatable models turn sources of differentiation into routines, behaviours and activities that are adhered to across the organization and easy to follow when set out on a new growth path.
  • Supporting your differentiation. Nonnegotiable principles, robust learning systems that facilitate constant adaptation are the fundamental building blocks for effective repeatability for business models.

Making Your Differentiation Easier to RepeatEdit

  1. Make sure you and your management team agree 
    1. What do our core customers see as our key sources of competitive differentiation?
    2. How do we know? 
    3. Are these sources becoming more or less robust? 
  2. See whether the front line of your organization agrees
    1. Employees and supervisors should be able to describe the strategy and differentiators the same way management does, simply and clearly. 
  3. Write your strategy on a page
    1. Should center around your sources of differentiation
  4. Conduct a post-mortem of your 20 most recent investments
    1. Differentiators should be commonalities
  5. Translate your strategy
    1. Simple principles should define behaviours, beliefs, and values to drive the strategy
    2. These should be represented in day to day routines
  6. Review how you monitor your businesses differentiators
    1. Method should drive learning and adaptation

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