Organizations try things. If what they do succeeds, they "learn" that what they have done breeds success. So they persist, becoming ever more focused in what they do, and ever more specialized in the skills they acquire.
Two things invariably happen to undermine success:
- Competitors soon learn how to do the same thing, and conditions change, so that what worked in the past no longer applies.
- Companies have trouble adapting because they often build competencies that don't advance new products, markets, or strategies.
Hence the phrase "competency trap."
But three strategies can help avoid competency traps.
- The first is to avoid excessive specialization. Building a broader range of competencies and knowledge, so you can react quickly to changes in market conditions.
- Develop peripheral vision, "only the paranoid survive." Markets don't change all at once. Pay attention to the facts, not to what you want to believe.
- Finally, understanding that a company's greatest strength can become its greatest weakness when circumstances change can help build a mind-set of continuous learning and vigilance.