What Makes A Firm Competitive? Wisdom from BCG’s Bruce Henderson
This year I have been reflecting on the legacy of Bruce Henderson. A Vanderbilt alumni and Owen School professor, Bruce was a pioneer in the business world, founding the Boston Consulting Group and participating in the creation of the management consulting industry. To celebrate the hundredth anniversary of his birth, BCG launched an Institute in honor of its founder and followed up this summer with a new book on strategy. It is a fitting way to remember such a great management thinker.
Holding the Henderson Chair at Vanderbilt, I feel very fortunate to have met Bruce during the last year of his life. Bruce had an office inside the faculty lounge. I was a new Assistant Professor at Owen and would often look to see if there was a light on in his office when I stopped by the lounge for a cup of coffee. At that point, Bruce’s health was failing, but his intellectual presence in the school never wavered. After he passed, I stopped by one day to comfort his wife Bess as she cleaned out his books. We all felt the tremendous loss.
Bruce contributed much to the study of strategy. Management books are chocked full of his insights and famous quotes. Working on the Owen School’s strategy this year, I turned to Bruce’s teaching on competitive advantage. Bruce argued that competitive advantage was multifaceted and that every firm needed to understand what made it different than its competitors. At a lecture delivered at Owen in the early 1980s, he argued that organizations must have a particular mix of characteristics that provide a unique advantage in the marketplace. (See this wonderful video of Bruce in action – extra credit for anyone who can identify the date/occasion of this lecture)
Over the past year, we have spent a lot of time thinking about Owen’s unique advantages. Both our Alumni Board and Board of Visitors dissected the school, thinking deeply about its attributes. Students joined the discussion at town halls and faculty and staff formed working groups to debate the school’s competitive advantage. Alumni and recruiting firms provided their ideas through surveys and interviews conducted by Huron Consulting. In the latest issue of Vanderbilt Business magazine, we share some the survey findings in a fun infographic.
What did we conclude? Owen has many strong characteristics, but our personal-scale, collaborative culture, diversity, and location in a vibrant, creative city are standout areas of significant competitive advantage. Based on this shared understanding of Owen, we developed a new mission statement for the school, centered on delivering world-class business education on a personal scale. Taking Bruce’s advice to heart, we are doubling down on what makes us unique. For example, as you’ll read in a feature story of Vanderbilt Business, “Being There,” we are investing in our immersive experiences – giving students the opportunity to put their classroom skills to the test in a real-world environment (albeit one geared toward learning). Such experiences put small groups of students, faculty, and business practitioners together in concentrated deep dives within an industry or subject – typically within the context of an industry epicenter like New York for financial services. The one-on-one, personal-scale interaction allows students to apply their unique skills and see how their interests can be developed.
Of course, we are also making more of our home in Nashville. While there’s been no shortage of publications heaping praise on Nashville, that cachet has brought with it a spike in the number of business opportunities flourishing in this community (see “Inside the It City”). So we have launched new immersive experiences right in our backyard – like our entrepreneurship immersion in conjunction with Nashville’s thriving new Entrepreneurship Center. Of course, we are also constantly enhancing our healthcare business opportunities and finding new ways to teach innovation and creativity leveraging the music industry.
Over the next few months we will be talking a lot about Owen’s unique features and our strategic initiatives to strengthen our competitive advantage. Certainly personal-scale will be at the heart of many of them. That thinking extends from on-boarding new students months before they arrive in Nashville through new life-long learning initiatives we are developing for our alumni. I think Bruce would be proud of Owen’s progress as we focus on his one defining question – “what makes me different than my competitor.”