…are the most successful – those that are leading their markets and earning higher returns. These firms run the real risk of becoming complacent and stale, forgetting that no source of competitive advantage is forever.
Firms must be continuously reinventing themselves. They must be learning every day – developing and acquiring new knowledge that leads to fresh insights about the firm’s markets and customers, rivals, and environment. Successful firms, by virtue of their very success, can lose their strategic edge and fail to keep their competitive strategy evergreen and fresh. Eventually, profitability declines and they cede market share and position to lesser rivals who have a greater capability to understand and exploit market opportunities.
Success can breed complacency. Excellence can become a habit, too much so. No strategy is forever. The ability to continuously learn faster and better than rivals may be the only source of sustainable competitive advantage.