In the past, the primary role of managers was to increase efficiency. By motivating and monitoring employees, honing the firm’s capital structure and negotiating firmly with customers and suppliers, corporate executives could reduce costs across the value chain and achieve sustainable competitive advantage.
Yet today, we no longer compete in isolated industries, but in ecosystems with porous borders. The fact that our current management systems don’t yet account for this shift shouldn’t blind us to the fact that it has occurred. The future doesn’t fit in the containers of the past.
The reality that we need to grapple with now is that competitive advantage is no longer the sum of all efficiencies but the sum of all connections. To win in today’s connected economy, you need to deepen and widen networks.