Strategy from the inside Out: Building Capability-Creating Organizations

While popular brands and unique capabilities help sustain a company9s competitive advantage, they cannot be built by imitation. Managers have been able to develop sustainable capabilities not by emulating others, but by using their organizational designs and processes to identify, build on, and leverage their "asymmetries"—their evolving unique experiences, contacts, or assets. Such asymmetries may occur even in the simplest organizations. Unfortunately, they frequently are concealed, of little apparent use, and unconnected to value creation. Thus they require new strategy making and organizational approaches for their discovery, development, and application. Based on lessons from a two-year study of a diverse sample of companies, this article shows how managers can grow capabilities that sustain competitive advantage by constantly identifying and growing asymmetries, embedding and empowering them within an organizational design, and shaping market focus to exploit them.