Photo by Timothy Valentine
Last week in our strategy class we were talking about competitive advantages. We learned about the two main ways you can create competitive advantage – cost advantage and differentiation. Then, as an answer to a student’s question (I don’t remember what it was exactly) the professor said something like this: if you are looking for how to create cost advantages – you need to look for answers in the operations class. If you want to create differentiation advantage – you need to look for answers is the marketing class.
I can’t say I agree.
I think one of the major problems companies are facing today is to create ways disengage from this kind of thinking. To create synergies between operations and marketing. And finance, accounting and HR for that matter. The thought that the advantage of the company, whatever that is, lies in one aspect or one discipline of the business is counterproductive and for me, counterintuitive. With everything we know about the importance of diversity in the creation of innovation, about the effects of social capital derived from interaction between different parts of the business, even thinking about competitive advantage as being the responsibility of one part of the business is dangerous.
I am sure our professor acknowledges that as well. All the examples of successful companies we keep seeing are examples of companies which succeeded to do both cost and differentiation advantages. Doing both requires coordination.
More than that. In the operations class we learn about things like TQM and Six-Sigma. These are concepts that not only reduce cost, but also increase quality and can create differentiation. Marketing decisions can have cost implications. The fact the Apple chooses (or choose) to create the I-pod with a very limited user interface (which I find terrible) is a marketing decision. But I am sure it has operations and cost implications. Design of the product can be a competitive advantage – who does it? Marketing or operations.
The separation of engineering and marketing is artificial. It presumes that engineers build feature-laden crap that no one cares about but engineers. Maybe mediocre engineers do this. Great engineers create with a customer in mind. Fantastic engineers create with themselves in mind as the customer. Every Nokia engineer should give their prototypes to their mothers, fathers, and kids. That would fix everything. The user interface of almost every phone is unintelligible. Anyone could have done an iPhone—it’s not like Apple has a monopoly on design.
I understand the need to simplify concepts for MBAs. But the fact that we study each and every one of the courses separately is enough to create silos of thinking instead of integrative thinking. I think all disciplines, and especially strategy, should embrace an integrative look.
No matter where you work and what is your pre-defined role in your company, you should try to schedule an hour, a day, a week – with another department – to understand their work, their needs and their problems. What you will learn will be invaluable to your work.