Several recent books have focused on an examination of sources of competitive advantage. Nicholas Carr's Does IT Matter?—perhaps the most controversial—essentially argues that information technology is highly overrated in providing competitive advantage and should not be regarded as an important source going forward, at least at the level of an individual organization. Other writers fret about the continued importance of intellectual property in a world where patents can be practically replicated through careful innovation. On a third front, however, Thomas Davenport and Laurence Prusak argue in What's the Big Idea? that the successful implementation of management concepts can offer real opportunities for sustained competitive advantage. And judging from their sample of citations, one has to conclude that nearly all management concepts emanate from the U.S.
Davenport and Prusak lay out a roadmap tracing the development, adoption, and implementation of management concepts such as reengineering, balanced scorecards, Six Sigma Quality, benchmarking, core competence, and matrix management. The map includes a variety of players such as business gurus (the source of many of these concepts), top management sponsors (typically CEOs or other high-ranking executives), and "idea practitioners," those at lower levels of organizations who are the real foot soldiers in the battle to see that ideas come to fruition through effective implementation. They identify 200 "business gurus" based on the frequency with which their work is accessed or cited in the media. Only a handful, and none of those at the top of the list, practice outside the U.S. (For the curious, the top four they list are Michael Porter, Tom Peters, Robert Reich, and Peter Drucker.)
The authors point out that "although gurus vary in how they go about their work, all of them must do three things: interact with companies, think and write, and present their ideas at meetings and conferences." Similarly, most of those in their sample of adopters and implementers, including "idea practitioners," are associated with U.S. organizations. Idea practitioners, for their part, must distinguish more timeless management concepts from fads, time their moves carefully to meet the needs of their respective organizations, and enlist top management support. One might infer from this work that the real secret weapons that many U.S. firms possess in their competitive struggles may well be business gurus, idea practitioners, open-minded CEOs, and the concepts they develop and implement.
This raises a number of questions. Do the development and application of management concepts represent a significant source of competitive advantage? Is it more important than that represented by either information technology or intellectual property? If so, is the U.S. management community fortunate to be close, both geographically and to some degree culturally, to so many of the business gurus? Is this the product of coincidence or of some real shift in the intellectual center of management from Europe and the days of Henri Fayol and his successors to the U.S. and Peter Drucker and his disciples, with a brief detour through Japan during the 1980s? And what does all of this portend for the future of competitive advantage, particularly in an increasingly global context? What do you think?
For more reading:
Thomas H. Davenport and Laurence Prusak with H. James Wilson, What's the Big Idea? Creating and Capitalizing on the Best Management Thinking (Boston: HBS Press, 2003).
Nicholas G. Carr, Does IT Matter?: Information Technology and the Corrosion of Competitive Advantage (Boston: HBS Press, 2004).