Transient advantage isn’t going away – how AI can help with inevitable inflection points

Transient advantage isn’t going away – how AI can help with inevitable inflection points Rita McGrath | Thought Sparks

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Agenda 02

The field of strategy has long been anchored to the idea that industries exist and that the normal state of things is in equilibrium. Maybe that was the way things were, but it certainly isn’t the way things work now. Instead, we need to be building systems capable of coping with transient advantage. Here are some ways AI can help.

Strategy in the age of Brat Summer

03 Strategy had its intellectual roots in industrial economics. In that tradition, there are two truths that are taken for granted. The first is that the position within an industry occupied by a firm will determine its fate. The second is that the normal state of things is equilibrium. Change is considered a temporary state that punctuates the norm – hence “punctuated equilibrium.” Innovation is an aberration, not a core economic activity of a firm.

Change is the normal thing, now

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Questions of organizational form and design can no longer be considered independently from strategy. In a world that is fundamentally unpredictable, a huge part of strategy is designing a system (an organization) that can engage appropriately with its environment.

Rita McGrath Thought Sparks

Strategists today need to focus at least as much attention on periods of foment and change as they do on periods of stability. Further, our models and frameworks need to cover the whole life cycle of competitive advantages, from the earliest periods of remote possibilities, to the decline of past advantages that require an organization either to transform, become irrelevant, or disappear altogether.

NEW SITUATIONS CAN BENEFIT FROM NEW TOOLS

05 Isn’t it funny that while everyone talks about how much the world has changed, that we see the adoption of new tools that could help us to cope move along so slowly? If you’re interested in running some small experiments and would like to get some guidance from our team, be in touch!

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