Developing a sustainable and realistic competitive advantage in your career is challenging. Everyone reading this understands how difficult and tiresome it is to renew your profile so that you remain attractive to your employer on a daily, weekly and yearly cycle.

And it is not just about being better than you were 12 months ago, it means being attractive relative to your peers. Each year thousands of MBAs and other graduates enter the workforce with fabulous credentials, and your peers get staffed onto choice assignments close to the senior leaders of the organization. How in the world will you compete?

I received the email below from a former client, Stanford MBA graduate we placed at McKinsey in San Francisco, who has since left and is working for Google. We have had numerous discussions about his transition and his career is not going well.

He is struggling to define a role for himself within Google and feels he is adding little to no value. He believes the competition is just too much for him. He gets up most days and wonders what he will do. I know he has been reading all kinds of books from self-help gurus like Malcolm Gladwell, in the hope of finding some tenuous competitive advantage for his career.

I thought the advice I plan to send to him would be useful to everyone.

“Dear Michael

I returned to the US after my vacation. Thanks for all the cool changes to the site. I will dig in if I get a chance!

I just read “Outliers” and it lifted my spirits. Please read it when you have time.

After much to and from on this, I am going to build my career around my quantitative skills in financial analyses on the business development side. I am good at it, I like it and Google is doing a lot of acquisitions so these skills are in enormous demand.

Any advice you have will be great to hear.


What follows is the complete response I sent him.

“Writing this makes me feel a little awkward because I am going back to some of the basics around how you should make this decision. I worry I may sound somewhat condescending since a lot of what I am going to say was probably covered in your MBA, or at least by your career counselors.

At least, I hope they discussed these points with you.

Yet, I feel it is important to please take the time to read what I have to say. I will lay this out so you can follow my thinking and see how I arrived at my conclusions.

Why we misunderstand career competitive advantages?

We assume competitive advantage is a measurable strength or attribute. We think there are individual and discreet things we can measure. For example, a company may assume its competitive advantage is access to 30 million cable subscribers. That is measurable and largely singular. It is one thing that is easy to measure, easy to focus on and, therefore, easier to defend. Focusing on 4 things to defend is much tougher.

Professionals like you and I tend to do the same. We try to find one, two or three measurable strengths and claim it is our competitive advantage. In your case, it is your awesome excel jockey skills and possibly your ability to present those numbers you have crunched. I may assume my competitive advantage is my knowledge of consulting as a former corporate strategy partner.

Before I explain what is competitive advantage, lets talk about why we do this and why it is wrong to do so. The items above are not a competitive advantage.

The single most important reason why we define competitive advantage in these simple terms is because it is easy to do so. It is easy to write about simplified concepts, they tend to make intuitive sense and everyone is repeating it – so how can it be wrong?

Well, you can write books about it because it creates such a compelling and easy storyline:

Step 1: Make a list of your skills

Step 2: Filter out what you like

Step 3: Filter out what you are good at

Step 4: Work at it for 10,000 hours and be a success

As humans, we like stories like that, and naturally, everyone is going to try and sell you a get-rich-quick scheme along these lines.

There is another reason this erroneous view of career competitive advantages has become so popular. To understand this, think about the way mentoring is done today.

There is a massive cottage industry, multiples of multi-billion dollars, with supposed mentors who can help you build a career advantage, and ultimately, or so they claim, an upper six-figure salary.

They will sit down with you for an hour or so, usually an hour since they bill by the hour, and you get to pump them for information during that hour. Now, knowing they need to show some value in that hour, or you will not pay for more hours, they are forced to offer some tantalizing and compelling tidbit that you can use immediately.

They basically offer you the 4 steps above and add in a few interesting ideas. What more can they realistically do in one hour? If they do not offer you something solid, you will hit Google search and find another career coach.

The very same problem tarnishes the competitive advantage analyses of companies or businesses. We want to hear simple solutions, which fit our existing frame of thinking. So we filter out things which are too complex or which we cannot immediately replicate.

There is another reason why these simple and cute definitions of competitive advantage have become so popular. Humans have a tendency towards vanity and like hearing nice things about us.

That is why the 10,000 hours narrative is so catchy.

1 – It means you worked hard.

2 – Ergo, it means you did not just luck out. No one likes to hear that.

3 – Ergo, it means you are not lazy. People definitely do not like to hear this.

4 – The number is large enough to require an effort but not so large that you give up without trying.

An excellent marketing ploy!

I am going to list some of the myths about competitive advantage related to your career or a company. They all apply to both.

Myth 1: Your strength and competitive advantage is the same thing

This is probably the most common misunderstanding about competitive advantage. What you are strong at is usually not your competitive advantage. Let me explain this in a simple way.

You are good at building financial models and explaining them. I agree with this. I have seen your work and you are good. Yet, why are you good? Is it because you have an ability to synthesize large amounts of data and explain it in concrete terms? Is it because you have the ability to take intangible concepts and reduce them to concrete numbers?

In this situation you are strong at financial analyses because you are applying your competitive advantage here. The financial analysis is not your competitive advantage. My feeling is that this is your situation. In fact, you are probably applying your competitive advantage to the area which will not generate the optimal return on your effort. This is a key point.

People do this routinely. They do what makes them look good, versus focusing on what they should be good at. So, your strength is financial analyses because your competitive advantage allows you to be strong there.

The obvious question is, what if you applied this competitive advantage somewhere else where it gave you a higher return?

Myth 2: Competitive advantage is important

Actually, comparative advantage is important. It is more important than competitive advantage or absolute advantage. A few clever guys won the Nobel Prize for this concept to explain trade between nations.

To your career, it applies like this. Lets assume you are the best person in the whole of Google at building financial models. Is that good for your career? Maybe. We cannot yet say. Though, we know it is good for Google.

We need to check one more thing.

So you have the best financial modeling skills at Google, but is that the skill that generates the greatest return for you? What if you had another skill, which was ranked second on your list of strong skills but created more advantage to you if you went ahead with this skill.

This is the principal of comparative advantage. You should not focus on what you are best at relative to everyone else, but what creates the most advantage to you, even if you are second best at it.

Most people are scared to walk away from an area where they have built a modicum of success because they fear losing momentum. It is also counter-intuitive and that scares them.

When you compare your competitive advantages to others on a value basis, then you are doing an analyses of comparative advantage.

Myth 3: What you like signals your competitive advantage

This is an easy trap to get into. Your competitive advantage sits underneath or supports your career. This is an important distinction. It is not what you do.

If you get up in the morning and think you will spend all your time on your competitive advantage because that will be your career, you are sadly mistaken. Your competitive advantage is not what you do, but how you organize yourself to accomplish what you set out to do.

We compound this misunderstanding by selecting what we like to do. We rationalize this by thinking that since we have to spend so much time on our competitive advantage, it might as well be what we like doing.

I agree your career must be built around what you enjoy doing, but the competitive advantage that propels that career may very well be difficult to sustain and not a whole lot of fun.

Let’s look at an example of this.

I read a story about the actress Naomi Watts who does not like stunt doubles for tough scenes since being away from the experience does not allow her to internalize the role. For one movie, she spent over 15 hours in the water at night shooting a scene and almost became ill. You can imagine how she needs to organize her life to achieve.

The organization part touches on what is competitive advantage but that is explained later.

The point is her great acting is an outcome of having this competitive advantage, and it is clearly not fun at times. The acting is fun, but the honing the competitive advantage may not be.

The distinction here is that she is an actress and that is what she does. Her competitive advantage is not her physical features, voice or skills, but the way she organizes her life to be a great actress.

Myth 4: Competitive advantages are easy to measure

This is directly linked to my comments earlier about how we, as relatively lazy and impatient people, like simple and quick answers. We hire consultants and say tell me the 5 reasons why my competitor is cleaning my clock in this market.

Now, unless we get the 5 reasons with clear targets, we get angry and replace the consultants. Certainly some competitive advantages are probably easy to measure this way, but most are not easy to measure in any clear way.

If you are unlucky enough to have a competitive advantage which is easy to measure then it is easy to replicate. That is a sad fact. If your only skill is financial modeling and presenting, then I am guessing about 20% of every MBA intake in every school in the world is gunning to displace you at that skill and unless you have some unique way to improve it, someone will eventually succeed, and you will be displaced.

This alludes to the point that a sustainable career competitive advantage is rarely simple. If it was, it can be easily explained and easily copied. And that is not a competitive advantage worth investing in.

Michael Porter wrote an excellent piece about Southwest Airline’s competitive advantage, which I agree with. It has nothing to do with metrics, because the airline has been benchmarked to death, and yet very few peers are catching up to it.

Myth 5: You can have more than one competitive advantage

Let’s explain why this is a myth. A company, like a person, must be organized around its competitive advantage: changing the structure, governance, investments, recruiting, training, marketing, supply chains etc., to sustain the competitive advantage.

If the company does a great job at this, everything is tightly wound together, synchronized and works well. If you have two competitive advantages, how do you organize one company to perfectly fit around them both? A company cannot be perfectly organized around two or three things. It can only be imperfectly organized around more than one thing.

Of course, this leads to the 6th myth that competitive advantage is a “thing.”

What is competitive advantage?

Competitive advantage is how a company, or a person like you, arranges, sometimes mediocre, things/behaviour/skills/assets/networks to produce an outstanding result. The competitive advantage is the system of organization, and not any one attribute.

That is the key insight.

This is not new. This is the basis of Michael Porter’s work. It is just complex to explain and does not fit into bite-size narratives. That is why many experienced consultants and executives do not explain or understand strategy this way.

Yet, it is a profound insight. Think of Southwest Airlines. Sure, you can steal their people, copy their pricing, use their slogans or even try to copy their turnaround times.

How do you copy an entire system of organizing and running things? To do that, a Southwest competitor would end up being a completely different company and most companies are not willing to go through that kind of effort. It is too much work, costs too much and most people are unwilling to go through such a wrenching change.

Understanding this about competitive advantage is crucial to your career.

First, it makes it really difficult for people to copy your advantage if it is built into a system. To do so, they would first need to understand your system of organizing things and second they would need to implement it. They are both terribly difficult to do.

Let’s go back to the Naomi Watts story. As an aspiring young actress, how do you figure out what Mrs. Watts does to have the ability to undertake such complex roles? Do you stalk her or hide under her bed? Let’s assume you did figure exactly what she did, could you replicate it?

Could you replicate all the messy and painful things you need to do on a daily basis to be that good?

Are you willing to go to bed every day at 9pm sharp to build your immune system? Are you willing to forgo endless party invites at posh nightclubs since the noise forces you to speak louder and hurts your throat? Are you willing to avoid alcohol for 11 months to prepare for a movie? Are you willing to lose 50 pounds and smoke 6 packets of cigarettes a day for 6 months to prepare for a movie?

The short answer is no. We like to assume competitive advantage is a single simple attribute like height, beauty or financial modeling because it is easy to attain.

Sports provided many examples of this concept.

How many times have we seen an average sports team topple the expected winner? Certainly, sometimes it is due to luck, weather or food poisoning. However, a good coach will know how to arrange average players to generate a result greater than the sum of the parts. That is a simple example of where the way the team is organized is the competitive advantage. No one player is the advantage.

How do you copy that? You cannot. You cannot even explain it easily. That competitive advantage has an enormous barrier to entry. The best you can do is hire away the coach to hope he can replicate the system in your own team.

There are numerous examples of this but the Miracle on Ice is close or the 1994 Rugby World Cup final. Individually weaker players were organized in a superior manner to beat teams with individually stronger players. It is not that the losing teams were organized in a weaker manner, it is that they made decisions to emphasize individual strengths.

In a famous study published in the Harvard Business Review about “stars” in banking it was found that the so-called stars analysts did far less, how shall we say it, stellar when they moved banks. That is because the receiving bank assumed the stars innate skills were their competitive advantage when it was actually the integrated banking support system in their previous employer that allowed them to be successful.

The stars underperformed since the receiving bank did not have the same system, the new hire was unable to replicate the system in the receiving bank, or the new hire could not fit into the new bank’s system. This is a classic example where the hiring bank assumed the competitive advantage of the rival bank was something as simple as one or two analysts.

The competitive advantage of the releasing bank was the way it organized itself which allowed its people to perform well, and that is what you saw in the market: star analysts due to the bank’s organization. Cause and effect were mixed up. The bank was not successful due to these few analysts, but rather the few analysts were successful due to the bank.

I think Malcolm Gladwell is a great writer, compelling prose, with interesting ideas. He certainly has the best hair of anyone I know.

Though, like my early advice, I would advise you to take the lessons offered by him with some caution. This is not because Gladwell is trying to mislead anyone at all. He most likely believes what he writes. The main reason is that to make his book accessible to everyone, he needed to simplify it, and the context to that simplification is important.

I have added them in below for you.

Even the loser practices 10,000 hours and possibly more. It is naïve to think that hard work and perseverance alone led to the triumph. This type of thinking makes you underestimate the competition. Do you really think no one was practicing as much, if not more, than Michael Jordan and Tiger Woods?

We do not hear about those who failed because they did not make it, but to assume they did not make it because they did not practice enough is misleading. Nike and Adidas cannot build multi-million dollar deals around Eric Menendez who practiced more than 10,000 hours but did not make it.

Never heard of Eric Menendez? You never heard of him because he did not make the pro’s, not because he did not try hard.

So be careful of picking those narratives that make you feel good, but offer no prescriptive solutions to success.

Humans are complex animals who like to hear warm and fuzzy things about us. We want to feel wonderful about what we did, how we did it, and why we did it. My simple question to you is this: sure you can spend 10,000 hours practicing something, but do you need to?

Try to be more efficient with your time.

This concept of 10,000 hours also feeds our desire to feel good about things in two other ways. First, it ignores the element of luck. Do you have any idea how many worthy people do not make it due to bad luck?

To assume hard work alone gets you there is to discount the element of luck. The phrase “chance favors the prepared mind” was invented to imply that, in spite of enormous good fortune, we did it alone. Usually, luck plays a big role and there is nothing you can do about it.

Second, this number ignores the entire interlocking system of actions and steps sitting behind the players. How did they arrange their lives, how did they work with their coaches, how did they choose events and sponsors?

If Tiger Woods had picked the wrong events and had a weak coach he could have burnt himself out and learned the wrong habits. It is more likely this complex system sitting under his career led him to the point where he had the time and possibility to reach the top if he practiced 10,000 hours.

Who is to say that is not what happened?

In other words, career success is like a 4 x 100 meter Olympic relay team. All the lights and cameras are flashing on the final step when the 4th guy ends the race. Yet, it could very well have been the 2nd or 3rd guy who made the crucial difference.

Linking this to the Tiger Woods analogy, we give too little attention to the competitive system he built because we never see it and it is not so glamorous. We like to focus on the flashy parts. To be frank, the media does this because you cannot sell shoes and hats by focusing on the grunt work.

But you are not trying to sell shoes, hats or marry au pairs, so focus on things that matter.

Kevin P. Coyne does an interesting case in season 2 of The Consulting Offer. It is the Spice Girls / Disney case. In this case, you need to determine the competitive advantage that led to the Spice Girls, Hannah Montana, Demi Lovato, Selena Gomez, and the Jonas Brothers becoming breakout successes.

You will see all the candidates in the recording treating competitive advantage as a set of attributes with metrics, which must be met. They fail to think about the manner in which Disney has organized itself to create these stars. The competitive advantage of the Jonas Brothers is not the Jonas Brothers. It is the fact that they were a product of Disney, and without the Disney machine behind them, they probably not have been as successful.

My advice

1 – Think about the way you currently spend a typical day, week or month. Do you exercise, do you network, how do you improve your skills? Send me the notes if you need to so I can think about it. We will think about what is the best role for you to exploit this system you call “your life’s activities”. If you do not like the roles, then we need to change the system to allow you to be successful in the roles you want to pursue.

2 – From the above, think about what those activities could prepare you for. Is it just financial modeling? Sounds to me like you could do more.

3 – Of the list you generate in 2 above, let’s think about which create the most personal and financial value to you, assuming that is your goal.

4 – Ignore attributes like your Stanford MBA etc. Those are not competitive advantages in a real sense. Sure, it is better than someone with an MBA from a weaker school, but that is a purely paper advantage. Over time, if that person is better, she will beat you. The MBA designation from the top school is nice but there are substitutes in the market.

Either the goal or the system must be adjusted. Yet, it is not about the financial modeling. That sits in the middle. You are only talking and thinking about the task/career. The task/career you focus on is the means of deploying the system advantage you create to achieve your goals. It is a broader discussion that we need to have about the system and goals.

Finally, building this set of interlocking activities takes time. You may be slower at your career as you build this and fine-tune it, but you will accelerate faster once you perfect it. In other words, a career competitive advantage built on a systems view of competitive advantage leads to a slower start in one’s career but a better ending.

Keep me posted.


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6 responses to Competitive advantage in your career

  1. Hi Vinay,

    Thank you for this very positive comment.

    In terms of systems dynamics, we tend to think about it from a corporate finance and strategy perspective. The best book on this subject is “The Strategy Paradox” by Michael Raynor of Deloitte.

    You have to think hard to see how it relates to systems and portfolios but it is there. Other books may be more literal in their relationship to the subject matter but this book offers the very best solution to the problem by a long shot.

    So read other books for subject matter knowledge and this book for the solution, which actually comes from finance.

    Hope that helps.


  2. Hi Michael,

    You hit it out of the park on this article. I have never looked at competitive advantage being system of organizing what one/company does & the need for it being difficult to replicate that system – true builders of advantage – sounds like DNA of person.

    Great example of Southwest Airlines and benchmarks. I have also used benchmarks in the past to position company at Point A and moving various functions to Point B…as they help develop roadmaps and performance improvement initiatives….but it is like becoming good at a sub process level….when the entire harmony of the enterprise …. system of organizing is missed….

    You are really making me wonder about the usefulness of benchmarking … and if clients really benefit…..may be to fix a specific problem…with a band aid…..

    Also like Prakash and Jen – found this hidden gem from the podcast.

    I heard the very interesting conversations which you had with Bill Matassoni. During his interview he mentioned about how even now he is re-reading with purpose books on scenario planning and Systems dynamics. It would be great to get your recommendation on what you have read in you or your colleagues have read.

    I would like to use this for a real life client situation. So appreciate your input on background reading material & potential toolsets.

    Have you run across strategydynamics and their toolkit? what is your opinion.

    Bill mentioned about Spatial Strategy. i am not sure i ever came across that kind of work while i was at Deloitte. Could you pls point me in a direction.


  3. Hi Prakash,

    Yes, this is a critical article. I will probably send out a reminder email about it since it seems most clients have not read it, even though it was published over 9 months ago.


  4. Like Jen N, I stumbled upon this article after listening to Bill M’s podcast. This article requires few reading before fully grasping the message. Powerful article indeed.

  5. Hi Jen,

    Yes, this is one of those critical articles we published. One that could make a massive different if you follow the advise.


  6. Michael, this is an incredibly deep article, which I only stumbled upon because you referenced it in Bill Matassoni’s podcast. Incredibly deep. I need to go back and re-read it because it hasn’t fully sank in.

    And then start to think about what my comparative advantage is , and how to deploy it.


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