Does your organisation rely on positional defences?

Traditional strategy teaches you to raise positional defences to boost profitability. This works in the short run, but leads the organisation down a slippery slope of reduced competitiveness that can cause the organisation to be wiped out when the barriers come down.

Traditional strategy aka Michael Porter teaches you to create barriers to entry, eliminate competition, tilt the playing field in your favour through lobbying and regulation, create switching costs for your customers.

These fixed “positional” defences do lead to increased profits for a while, but at a high long term price. They drain the vitality of your organisation by providing a buffer against the white heat of direct competition.

Like the Maginot line created by the French before World War II, your organisation comes to rely on these defences and loses its edge. They become a trap, as the energy of your business is devoted to shoring them up, and the next generation of innovation beyond the barriers is fiercely rejected.

The one certainty from both business and military history is that at some point these defences will fail. And given the current turbulence in the world, they are likely to fall sooner than later, with many businesses paying the price for protecting profits behind these barriers.

The alternative is to reject these alluring calls, and go up against the best competitors on a level playing field. Short term profit will be harder to achieve, but these competitors will keep your whole organisation on their toes, at your most innovative best. Your company will be first to exploit new opportunities, leaving others focused on defending their temporary refuges.

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