What Executives Consistently Overlook About Building Competitive Advantage

Human capital. We underestimate our people. Most employees are well-intentioned if hiring works. The real question is whether they're in the right roles. Do they come to work with purpose, or just for a paycheck? Companies love to say, “people are our biggest asset,” but often it's just talk. If people are leaving for raises elsewhere, why weren't they valued internally? Are we developing them? Do we have a succession plan? This is arguably the most important driver of value, and it's amazing how often it gets overlooked in both larger companies and small businesses.

The answer is the same whether you're big or small: focus maniacally on the customer. Amazon's leadership principles are a great model—customer obsession (providing excellent customer service), thinking like an owner, invent and simplify, bias for action. Those principles are timeless. Size doesn't change the importance of that discipline. A differentiation strategy built around customer satisfaction and a unique selling proposition can help a company gain more customers and retain customers even in a crowded market.

Never underfund the long term. Amazon is a prime example of this. But not every company can do what Amazon does. 3M offers another model—they balance short, medium, and long-term goals simultaneously. They don't want to believe in a trade-off. They want to do well across all three horizons. That's one way to handle the tension without sacrificing the future for the present.

Give it at least three to five years. Too often companies pull funding too soon, the initiative fails, and then they say, “See? It didn't work.” That's self-fulfilling. If after five years it still isn't working, then yes, stop. The same logic applies to acquisitions—if it won't pay off within five years, be very cautious about making that initial investment.

Not always. It’s very difficult to be equally good to all stakeholders. Take Costco: they treat customers and employees very well, but by necessity they push hard on suppliers. Unless you’re extremely profitable, like Google, it’s hard to serve everyone at the same level. Companies need to be clear about which stakeholders matter most to their strategy.

Focus on the customer. Think like an owner. When in doubt, those two principles will serve you better than anything else.

Same answer: customer focus. Understand who your customers are, why they buy from you, why competitors can't imitate you (what's your competitive edge), how big your market share is, and what your distribution looks like. If customers don't support you, nothing else matters.

Yes, but with nuance. Some firms build high-quality products but never make money. Early VC-backed companies often fall into this trap—customers love the free product or service, but the business can't sustain itself. Customer obsession is critical, but without profitability it won't last.

What we try to do with the Strategic Value Creation: Transform Strategy Into Sustainable Advantage program is to make it very applied. We go through the seven drivers of value creation—purpose, product market, human capital, costs, tech, capital allocation, and stewardship—and stress test them with real-world cases. Participants work through examples, hear from leaders in practice, and debate with peers. It's not about abstract slides; it's about sharpening your ability to spot blind spots, push back on wishful thinking, and figure out where the real value in a business comes from.