John Hagel III, a former McKinsey consultant, and John Seely Brown, former chief scientist of Xerox, are focusing these days on a question that CEOs often ask themselves: How can their companies develop a sustainable competitive edge that can keep them ahead of the competition? Their answer, which they discuss in a new book, involves ideas that enable firms to step up the pace at which they develop new capabilities. Hagel and Brown will speak about these issues at Supernova 2005, a conference of technologists and business leaders to be held in San Francisco later this month. Kevin Werbach, a professor of legal studies at Wharton and Supernova's organizer, spoke with them about sustainable advantage, capability building, process networks and several other themes that will be highlighted at the conference.
Werbach: You have a new book out, The Only Sustainable Edge: Why Business Strategy Depends on Productive Friction and Dynamic Specialization. Let me start by asking what the only sustainable competitive edge is for business?
Hagel: It is the notion that increasingly executives need to think about strategic advantage in dynamic terms as opposed to static terms. While traditionally strategic advantage was based on geographic distance or core competencies, which were typically defined as static, increasingly the only sustainable edge has to do with the capacity to accelerate capability building. Companies must be able to build distinctive capabilities more rapidly than anyone else. What we focus on are management techniques that are emerging to help build that kind of dynamic strategic advantage.
Brown: It's not just management techniques but also a set of tools that can facilitate people at the edge being able to perform serious new work, because in this rapidly changing world, you need a constantly evergreen set of capabilities.
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