This post explores edge competency concepts that can lead to extraordinary improvements in product launch success. These improvements exceed what is possible using a traditional "alignment of resources" model.
Core Competencies Background
To provide a mental anchor, I found it helpful to compare core competencies and outsourcing. Often, core competencies are described as a set of business critical capabilities that a company is doing well and wants to improve. Many firms have adopted a strategy of improving their core competencies and outsourcing other functionalities. In the United States, one common strategy is for a company to focus on design and outsource manufacturing. Another strategy is to find new ways to sell and outsource support.
As presented in the 59ideas blog:
The term edge competencies is coined as a direct contrast to core competencies...Edge here refers to the edge of the company - which is where the company meets the outside, the customers, the suppliers, the world at large.
Another insightful description is presented at The Foundation for P2P Alternatives:
In a world of cheap coordination, the edge - the boundary between the firm and the external - is the new core. That's because, counterintuitively, the strategy that dominates the shrinking core is to leverage the edge: not to simply build complementarities between internal sources of value creation, but between both internal and external sources of value creation... Players who have built edge competencies have learned to marry, remix, and recombine markets, networks, communities, and, crucially, the firm, in new, radical ways.
As described by Umair Hague in January 2006, when a team can leverage the potential for value creation outside of the company, hyperefficient coordination is possible because:
- Building and maintaining resources is more efficient
- Allocating resources is more efficient
- Building and storing capital (such as social capital) is less difficult
- Provides new opportunities for self-organization and self-regulation
Implications for Product Development and Launch
I have observed that many teams outsource activities that directly relate to product development and launch. Stated another way, when management deliberately shrinks core capabilities as part of an effort to improve operational efficiency, new product launch innovation may suffer.
Product Life Cycle Considerations
When deciding what functionality to outsource, it is appropriate to review product life cycle factors. The closer to the time of the product announcement of a radically new product, the greater the need to encourage feedback, iteration, and collaboration in the development team. A product that is in the maturity and decline portions of the life cycle has different priorities.
For example, when selecting a firm to provide PR functionality it is wise to ask if the desired contributions for a PR firm for the development and launch of a new product are different than the contributions of a typical PR firm that provides general PR services for a company.
Development and Launch Considerations
Here are two scenarios that describe how PR functionality could be incorporated during product development and launch:
- Scenario 1: A general PR firm engages when most of core product development is complete. A primary activity for the PR firm is to gather information from R&D, marketing, and sales representatives. The outputs from the PR firm's activities include a few new product press releases. To a large extent, the actions of the development team are not impacted by feedback from the PR activity.
- Scenario 2: A PR specialist becomes a valued part of the development team early in the process. PR goals are incorporated into the launch objectives. The PR specialist's immersion in other development activities inspires PR innovation for this product launch. There is additional synergy in the development team.
Imagine extending the second scenario. When this happens, a team can expect more and more of the advantages that are described in discussions of edge competencies. The value amplification can range from linear to polynomial (Metcalfe) to exponential (Reed) to combinatorial (Haque).
Product launch is a great opportunity to demonstrate integration across the value chain to produce innovation and growth. For more information, visit the OpLaunch Launch Architecture page. For help implementing this in your organization, contact me.
