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Saturday, July 19, 2008

Co-Creation – The Competitive Advantage in the Connected Age

In the GIXBang world (The interacting trends of increasing globalization, innovation and complexity we term as the GIXBang world) what is our competitive advantage? This is a key question enterprises need to ask. Not many years back competitive advantage was determined by how much of natural resources one possesses. In the era of industrialization, competitive advantage shifted to how much one can produce or manufacture. One can see that the era of industrialization created a world which was more connected through multiple advances in communications, transport and movement of goods. The information era that was born from the advancements in electronics, shifted the loci of competitive advantage to how much and how rapidly one gets information about everything that impacts the business.
Soon people realized that amount of information is not really what is useful for competitive advantage. It is the processed information combined with experience based rules and heuristics, that is the knowledge to act, that will lead to competitive advantage. The start of new millennium has brought to the center stage the ability to rapidly adapt to change as the key competitive advantage. As we all know the cliché the best way to adapt to a change is to create that change. Hence the first decade of new millennium has shown us the ability to create successful change, i.e., Innovation is the key competitive advantage. This has resulted in mass creation of books on Innovation, Innovation processes, methodologies and what not. Continuous Innovation as the only competitive advantage is the current thinking, as the world is changing so rapidly that complexity is exponentially increasing. The globalization which increases connections across geographies and dependencies across fields fuels complexity through rapid pace of change. This is unprecedented and our old methods and philosophies are failing, failing miserably. The new world seeks and feeds on connections and change. Hence innovation is the new competitive advantage.
As we enter the last twenty percent of the first decade of the new millennium, a new reality is emerging - competition is not about thriving alone. One needs to collaborate to compete. A lone innovator most likely will not win the long-race, one needs to collaborate continuously with all the stakeholders in creating the change that add more overall value than creating zero-sum games of the past century. Your competitive advantage lies in co-creation. One needs to co-create with one’s customers, one’s complementors (a term borrowed from the book Co-opetition), one’s suppliers and even one’s competitors. This is a new world and it has its new ways. Everyone in this world wants to be creating something new, different and unique for oneself. If we provide our customers tools, modules and techniques to create products and services that our customers need, we will be more successful. How do we create this co-creation system in the new world of increasing complexity, increasing globalization and increasing innovation? Well, that’s the main question in the GIXBang world.
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