Finding the Greatest Competitive Advantage

Every company wants to gain a competitive advantage. And I think most companies believe the right technology can be a game-changer. In fact, I am not alone in that opinion. Most companies with large R&D budgets are investing heavily in technology and artificial intelligence-based solutions.

Technology as a competitive advantage

While I do not disagree with spending resources on technology development, I think it is only part of a competitive advantage. What many companies fail to realize is that trying to build a sustainable advantage with technology alone can be difficult. The biggest drawbacks with technology are it is the easiest thing your competitors can duplicate and it changes so fast.

So, should companies try to compete on technology alone? Personally I think the answer is a hard no. To me, technology is just another component leaders use when implementing their business strategies. It may be an important part of the solution, but it should not be the entire solution.

If not technology, then what?

You still need something your competitors will have difficulty trying to duplicate. If it is not technology, then what could it be? You really have to look no further than your team. I believe human capital is the single biggest competitive advantage for companies.

Using human capital to stand apart

Your team is often overlooked when trying to determine what your edge is over your competitors. Creating a unique team (and culture) is the key to creating a sustainable advantage in the marketplace. Could it really be that simple?

After talking with several companies about the changes they needed to make in response to COVID-19 – the ones that had the most successes all had one common factor. The single biggest factor they cited when pivoting was the “team and the culture”. What was the common factor for the companies that struggled and failed? They all started with “We didn’t…” or “We couldn’t…”

To summarize, it was the strength (or lack thereof) and talents of the teams that played a huge role in the success and failures. So I believe yes, it is that simple. I still believe human capital is the ultimate, sustainable competitive advantage. What are your thoughts?