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The Principles of “Staying Power”

Michael A. CusumanoMichael A. Cusumano

The Principles of Staying Power
By Michael A. Cusumano

Anyone who has ever read a book about “excellent” companies and managers, or even invested in the stock market, has probably thought about what makes some firms and managers consistently better than others. Whilst some firms do outperform their peers for years and decades, this is a rare accomplishment. Staying power is particularly difficult when managers confront disruptive change in technology and customers’ needs—factors largely outside their control, except for how they may respond. Permanent competitive advantage probably does not even exist—that is, across generations of technologies and customers. Firms that continue to do well usually need to continue reinventing themselves.

The greatest threat to managers, then, may well be inside the firm. Years of success have the potential to breed complacency or arrogance. Both can plant the seeds of decline and make it more difficult to foresee and respond to change. In fact, steady growth and profitability are likely to encourage firms to become more bureaucratic and less attentive to detail and innovation as they transition to managing a larger number of people, more complex products and services, and a bigger scale of operations. And the more competent managers become at doing certain things well, the more difficult it is for them to think “outside the box” or recognize when they are losing their edge.

This admittedly difficult challenge—to identify fundamental principles of management that may help managers create competitive advantage and staying power for the firm—is the primary purpose of Staying Power. Surely one obstacle to sustaining any market position is that managers find it difficult to anticipate change or adapt quickly to change. Whatever “secrets of success’ or “best practices’ that a firm has mastered for one point in time, these advantages are likely to become obsolete or less effective as conditions and technologies evolve and as competitors improve what they are doing.

Every company and every market will experience ups and downs. Even the best firms are subject to lapses and may encounter disasters due to chance or mistakes of their own making. Moreover, the practices that lead a company to become number one may be vastly different from the skills and mindset needed to stay there. This seems especially true if, indeed, long-term success does breed complacency, arrogance, or inward thinking, and thus the seeds of eventual decline. Many companies have survived product disasters as well as deterioration in their businesses because of radical changes in markets and technologies.

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