Competing on the Edge: Strategy as Structured Chaos

Companies that compete on the edge are distinctive in three major ways
1. Strategy as Temporary, Complicated, and Unpredictable
 Traditional: long-term defensible positions or sustainable competitive advantages (low
cost/differentiation/specific core competences around technologies, brands, organizational skills)
 E.g. Intel: “only the paranoid survive” -- advantage is temporary and strategy must be constantly
shifting and evolving to surprise and confound the competition
 Play multiple options (a variety of moves, with varying scale) and expect strategy to shift over time.

2. Organization Drives Strategy

 Traditional: begins with plan and ends with actions
 Too much is happening, too fast, for a ‘strategy first approach’
 Simple organisations drive complicated strategies
 ‘Atomistic’ strategic unites with high business focus
 Rigidity (small number of very tight rule) + Flexibility
 E.g. Miramax: beyond strict rules about movie content, there is wide flexibility in moviemaking

3. Time Matters -- Rhythm & Pacing, Past & Future, Time Metrics, not just speed
 Traditional: ‘static’ (time is not relevant), react to events and changes
 Time pacing: anticipating and setting the pace of change
 E.g. Starbucks: set the pace of store openings per year
 Long strategic time frame:
 Stretch out the past: capitalising on the past to chase new opportunities
 E.g. Lonely Planet Publications: Multi-pronged growth
(blend previously developed material with new information, split products into different
versions, expand distribution network etc.)
 Probing farther into the future: keeping scale relatively small, carefully calculates the learning
potential from each probe, and zealously measures outcomes
 E.g. Bill Gates & Microsoft: scientific experiments
(lots of small investments in fledgling companies, various strategic partnerships, small bets on
competing technologies etc.)

 Traditional strategies are static and highly planned, thus inadequate in high velocity and hotly competitive
markets.
 Key performance driver is the ability to change, not just in rare and massive transformations, but rather
relentlessly over time.
 A competing on the edge strategy is much more dynamic: inherently temporary, complicated, and
unpredictable. Time is central, and organisation drives strategic moves.