7 Powers & Playing to Win. Utility & Compatibility | by Roger Martin

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Original article

Key takeaway

For entrepreneurs: Understanding and leveraging the "7 Powers" framework can help create sustainable competitive advantages, but be cautious of relying solely on switching costs or talent as cornered resources.
For investors: When evaluating companies, look beyond the "7 Powers" to consider how firms configure multiple activities to create unique, hard-to-replicate advantages.

Summary

Roger Martin analyzes Hamilton Helmer's "7 Powers" framework in relation to his own "Playing to Win" strategy approach. While finding high compatibility overall, Martin highlights some reservations and limitations of certain powers. He emphasizes the importance of distinctive choices, sustainable advantages, and the configuration of reinforcing activities in creating successful strategies.

Insights

The "7 Powers Compass" aligns well with Martin's view on cost/value benefits and barriers to competitive replication.
Switching costs may not be a truly sustainable advantage and can potentially backfire.
Talent as a cornered resource often benefits the talent itself more than company shareholders.
Counter-positioning typically provides only a short-term advantage before competitors respond.
The configuration of reinforcing choices (activity systems) may be an additional "power" not explicitly included in Helmer's framework.
Successful strategies often incorporate multiple aspects of the 7 Powers rather than relying on a single one.

Implications

Strategy practitioners should consider the 7 Powers as a helpful but not exhaustive list of ways to achieve competitive advantage.
Companies relying on switching costs should be wary of potential customer backlash and competitor innovations.
Firms must carefully balance the value created by talent with the value extracted by that talent.
Strategies based on counter-positioning need to quickly transition to more sustainable advantages.