Competitive advantage used to be about the sum of scale and the efficiencies that could be applied. Businesses like GM, GE, Exon Mobil, Wal-Mart all built scale and efficiency as the core of their success.
Our economies and institutions ran on the basis of scale and efficiency. Our political systems were fuelled by the notion that those in charge accepted a moral obligation to be honest, tell us the truth, and act in our collective best interests for the long term.
Now things have changed.
Competitive advantage is now more about connections that deliver the scale. The planets biggest businesses, Apple, Amazon, Alphabet, Microsoft, Facebook and Alibaba, now have connections as the common element of their competitive advantage.
Over the weekend I heard Donald Trump in an interview propose that he had a ‘Platform’ in his followers on Twitter, Instagram and social platforms generally, that removed the need to rely on the institutions that had built the US. His platform was the people, he argued, with whom he now had a direct connection, independent of the institutions.
Love him or hate him, it is hard to disagree.
Equally, the Liberal wipeout in Saturdays Victorian elections will I suspect be sheeted back to the absolute lack of trust in the Liberal party generally, fuelled by the shambles in Canberra over the last decade. The Labor party should also be very careful, rather than crowing their success, as we trust them no more than the Libs.
It seems the foundation of the 21st century will be trust.
Hard won trust is easily lost, and very hard to win back.
As businesses and institutions build scale based on connections, those connections will be fuelled by trust. The absence of Trust will come to mean that your ability to build competitive advantage will be compromised. The strategic and marketing task of both public and private institutions, can be boiled down to the simple proposition that they need to be trusted, and that we, the great unwashed who vote with our feet, money and loyalty, require that they earn that trust, it will no longer be just given.
To reach that point, they need to build up the real evidence that they can be trusted, that they will act in our common interests before theirs, as distinct from the fluff and bullshit currently churned out by their publicity lackies.
As I look forward, I can see no driver of success more important than outlining a goal, articulating the route toward the achievement, then being held accountable for the actions that take us towards the goal.
In a word, trust.
Header photo: Christmas 1914 on the Western Front.
