Be first, be smarter or cheat

Competitive advantage is a wonderful thing. It can lead to increased revenue, reduced costs, wealthier shareholders and happier customers. These are common benefits of a truly differentiated product, a business model to deliver it, and a strategy to get you there. When you’ve got it, you know it; and when you don’t, you feel the pain because the search for competitive advantage incurs the costs of invention.

Edison, a prolific inventor, was in his prime more than a hundred years ago but his experiences are still relevant. He oversaw invention on an industrial scale. Batteries, light bulbs, cameras, sound recording devices, stock tickers, mechanical vote recorders and much, much more all originated from the R&D he led.

However, all those successes were borne from many, many more failures (including the odd explosion). He learned that invention ‘boils down to one percent inspiration and ninety-nine percent perspiration’. In short, if you want to compete you must sweat.

So, in the modern world, how much does an organisation have to perspire? What effort builds strength? How does an organisation become sustainably better, faster?

One origin of success is making failure available, so people can learn from it. An organisation wanting to succeed must accept failure as an inevitable consequence of its humanity.

Another origin of success is failing in the right way, more of the time. When I screw up in the same way as yesterday, I’ve failed with a bare minimum of benefit. Screw up in a new and inventive way, and I can go home looking forwards not downwards. In this sense, some failures are better than others.

But both of these origins of success require the realisation of failure in the real world and in real time.

In a search for a more comfortable way to gain competitive advantage, we can look to film for inspiration. When Jeremy Irons’ character in ‘Margin Call’ is faced with little time to succeed, he surmises that winning presents his organisation with three options… be first, be smarter, or cheat.

Using this wisdom, if you’re looking to optimise your search for competitive advantage, and you’re not inclined to break the rules, then there are two concomitant options; succeed first or fail smarter.

Smarter failure can be achieved in the real world. For example, an Agile approach breaks management decisions down into smaller constituent parts. These smaller decisions can be delivered one valuable slice at a time, to help identify failure earlier. However, learning from failure in the real world will always be constrained by two fundamental limits; there’s only one organisation to experiment with and if you want to know what will happen a month from now, you have to wait… a month.

However, we can experiment in the digital world without any real consequences using a ‘Digital Twin’ model of the organisation. Such Digital Twins can be easily replicated and each replication can be made the subject of different management decisions. Time passes for the Digital Twin at a rate governed by processing power, so the future of different scenarios can be predicted in a safer, quicker and cheaper way.

Digital Twins have been used to manage complex, high-value assets in the industrial world for years (eg jet engines and wind turbines). Only now are they starting to be used in a commercial and consumer context. In their quest for competitive advantage, all organisations will do well to be smart and implement a Digital Twin first … before their only remaining option is to cheat.

To find out more about Digital Twin and to download a free copy of the Gartner report: ‘Create a Digital Twin of Your Organization to Optimize Your Digital Business Transformation Program’please click here.

This post was originally written by Philip Richardson