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Capability & Strategy

W

hen we think of business capabilities, most of us refer to the skills embedded in our people, processes, and institutional knowledge.

In any competitive environment, a company must be good at what it does and possess skills that make it stand out. Distinctive competencies allow growth companies not only to make more money from existing businesses but also to extract greater value from new opportunities.

Yet, entrepreneurs that succeed in sustaining growth tend to think more broadly about capabilities. A broader definition of capability is one that includes all resources useful in gaining competitive advantage. Let’s focus on three other classes of resources: unique assets, growth drivers, and leverage relationships.

Unique Assets
Unique assets are physical or intangible assets that are hard to replicate and confer competitive advantage on their owner. They include infrastructure, intellectual property, distribution networks, brands and reputations, and customer information.

Growth Drivers
Growth drivers include acquisition know how, deal structuring, financing skill, risk management, and capital management.  These all are necessary in creating and sustaining growth. These growth skills are usually transferable from one market or business unit to another.

Leverage Relationships
The other important capability involves relationships.  Ties with existing customers and suppliers that can provide growth opportunities should be nurtured. Those with powerful individuals, businesses, and governments can unlock opportunities that can make a significant difference in the rate of expansion into new markets or product lines.

How well an entrepreneur assembles these additional capabilities that a new business requires determines how successful the venture is at gaining and keeping positional advantage.

Some capabilities are more important than others, and combinations are generally harder to imitate than individual capabilities. The business builder’s challenge begins with the need to assemble the capabilities most critical to making money.  Lasting competitive advantage comes only when companies assemble difficult-to-imitate combinations of capabilities into groups.

For every entrepreneurial idea or opportunity, it is important to distinguish the capabilities that influence competitive success from those that are merely necessary to play the game.  Capabilities that are less critical can be outsourced or controlled by others.  Operational excellence is a necessary ingredient, but will not likely drive success.  What counts in the end is the set of unique assets, growth drivers, and leverage relationships that the entrepreneur can assemble in pursuing their dream.

About Dr. Michael Burcham

Michael is an executive coach, entrepreneur, investor, and strategist with 30 years of experience leading investor-backed, high-growth organizations.

“I built and sold a $40M company with Dr. Burcham as my mentor. This is the thing: if you EVER get the opportunity to learn from this man, from that moment forward, you’ll list him as one of the most influential people in your life, even if you live to be 90. And, you’ll know how lucky you were to have that opportunity and you’ll immediately say YES to any chance to be in his presence again—his wisdom is that impactful.”

Sherry Stewart Deutschmann

Former CEO, Letter Logic

“If you are looking for a trusted mentor and coach for yourself or your leadership team, I highly recommend Michael Burcham. He has worked with me as my executive coach for well over a decade now. Our conversations and his feedback have helped me sharpen my critical thinking skills. He’s a trusted advisor that I can confidentially speak with about any issue—and I know I’ll get valued feedback. I highly recommend him.”

Ryan McGrath

CEO, Asset Living

“Dr. Burcham’s depth and breadth of experience makes even the most ADD entrepreneurial leader sit up and take notes! His coaching skills bring out the ‘best you’ possible. He selflessly shares the good, the bad, and the ugly—leaving you with an authentic and moving experience sure to spur action and professional growth!”

Julie Lenzer

Director, U.S. Department of Commerce

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