Seven conceptual traps that make enterprises lose their competitive advantage

In a rapidly changing environment, most managers understand that they need to change the company's operating model. But some deep-rooted traditional ideas often lead the company to the abyss. The following are the most common pitfalls:

1. "The first move is the strongest"

This erroneous view holds that the first company to enter the market or acquire assets can establish a sustainable competitive advantage. In some industries, such as aircraft engines or mining, this statement is correct. But in most industries, the first-Mover advantage may not be sustainable.

2. The trap of superiority

Most early technologies, processes and products are not as effective as mature competitors. Because of this gap, many mature companies will be complacent and stop improving mature products and services until start-ups grow up and become a threat. At this time, traditional companies often have no time to make up for it.

3. Performance trap

In the harvest period, many companies' product performance exceeds the demand of consumers, but they are reluctant to launch a simplified version. When cheap and simplified substitute products can meet the needs of consumers, they will abandon the products of traditional companies.

4. Resource allocation trap

In most companies, the leaders who manage the largest and most profitable business departments have absolute right to speak, and they are often not interested in putting resources into innovative business. I remember around 2004, I got a Nokia product, which is very similar to today's iPad. This product can surf the Internet and browse the web, and it even has a basic application library. Why didn't Nokia invest more resources in this breakthrough innovation? Because the company focused on the mass mobile phone market at that time, the resource allocation matched it.

5. Structural vacancy trap

When I ask managers, what is the biggest obstacle to innovation? I often hear them answer, "The defect of our organizational structure has led to the failure of innovation." When there is a contradiction between opportunity and organizational structure, enterprises often choose to give up rather than transform. For example, manufacturers may give up the opportunity to transform into a service business, because it requires them to integrate their business activities according to the customer experience, rather than simply improving their product lines.

6. bureaucratic trap

In many companies, the more assets and employees, the better the company's situation. In this case, the company encourages wealth accumulation and bureaucracy, and resolutely maintains the status quo. This unhealthy trend will inhibit experiments, iterative learning and risk-taking, and lead employees who are keen on innovation to leave the company.

7. Accidental innovation trap

Many companies have not established the system and process of competitive advantage, which leads to innovation becoming an accidental behavior. If only individuals support innovation, then the company's business fluctuations will make innovation extremely fragile.

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