
What Executives Consistently Overlook About Building Competitive Advantage
- What’s the biggest value driver most leaders tend to overlook?
- How can small organizations create strategic value?
- How should leaders balance short-term profit pressure with long-term value creation?
- How do you know when it’s time to pause or stop a heavy growth investment?
- Is creating value for shareholders the same as creating value for stakeholders?
- What leadership move delivers the biggest payoff for value creation?
- What’s the secret to creating competitive value that can be sustained?
- Many businesses fail when they confuse solving their own problems with solving customer problems. Do you agree?
- What can executives expect from your Strategic Value Creation program?
- Upcoming Corporate Governance Programs
Q&A with Shiva Rajgopal
Executives are under constant pressure to define a clear business strategy and sharpen their value proposition in order to achieve sustainable competitive advantages. A strong competitive advantage is rarely built on a single decision; instead, it depends on a mix of core competencies, disciplined marketing strategies, and the ability to adapt to market demands. Companies that build a strong brand identity and cultivate a loyal customer base are better positioned to capture market share and deliver lasting business success.
The foundation of this work lies in understanding your target audience and designing product or service offerings that align with both customer needs and financial performance. Organizations that combine cost leadership with a clear differentiation strategy, supported by effective supply chain management, can achieve superior margins while still providing excellent customer service. Whether through strategic partnerships, leveraging innovative technologies, or improving production processes, the goal is always the same: to create a competitive edge that enables a company to stay ahead of rivals and retain loyal customers over time.
Creating long-term value is rarely about a single bold move. More often, it comes down to everyday leadership choices—how you invest in people, balance short-term pressures with long-term goals, and decide which stakeholders matter most. We sat down with Columbia Business School's Professor Shiva Rajgopal, one of the world's leading industry experts on corporate governance and business strategy, to explore the leadership moves that truly shape competitive advantage and build a sustainable competitive position.
What’s the biggest value driver most leaders tend to overlook?
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.
How can small organizations create strategic value?
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.
How should leaders balance short-term profit pressure with long-term value creation?
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.
How do you know when it’s time to pause or stop a heavy growth investment?
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.
Is creating value for shareholders the same as creating value for stakeholders?
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.
What leadership move delivers the biggest payoff for value creation?
Focus on the customer. Think like an owner. When in doubt, those two principles will serve you better than anything else.
What’s the secret to creating competitive value that can be sustained?
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.
Many businesses fail when they confuse solving their own problems with solving customer problems. Do you agree?
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 can executives expect from your Strategic Value Creation program?
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.
Contact Us
If you have questions about the program or are interested in enrolling or sponsoring someone in your organization, please don’t hesitate to contact Christine Tom at christine.tom@gsb.columbia.edu.
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