Strategic advantage comes from possessing a proprietary insight; it means that you know something valuable that others do not appreciate. These insights are “facts” that belongs to you and not to others. That proprietary insight gives you an advantage over your rivals.

Now, if you don’t feel comfortable that an insight is a fact, consider that it is a hypothesis that you want to prove and enhance.  One good example is Starbuck’s growth from a stand-up only coffee bar to a social lounge. By the time that rivals figured out that Starbucks was doing something different, it was already established.

Reality is socially constructed

Imagine one person saying this to another, “I’ll telephone you tomorrow at six o’clock.”  Does that mean 6AM or 6PM? What if the person is in a different time zone? You can’t understand the “truth” of the fact of six o’clock without considering the context of social/cultural conventions like time zones or AM-PM.

Thus, time is subjective.

The overvaluing of objective truths

You’ve probably heard the story about black swans. As Nassim Nickolas Taleb writes,

“before the discovery of Australia, people in the Old World were convinced that all swans were white, an unassailable belief as it seems completely confirmed by empirical evidence. The sighting of the first black swan…. illustrates a severe limitation to our learning from observation or experience and the fragility of our knowledge”

Whenever we hear about objective truths, we’re likely in the realm of conventional knowledge. There is no opportunity for gaining advantage in that space. Facts are not as clear cut as we tend to assume. When we are in a hurry, or not considering the context and the culture, it is easy for our minds to overlook things that will turn out to be important.

Instead, the strategic thinker looks for interesting and small signals: the discontinuities that can be exploited by a good strategy.

The microskill of contextualization

Contextualization is the act of understanding the themes and patterns of the particular situation. A competent strategic thinker notes the particular policies, institutions, worldviews, and circumstances that shape a given moment in time. In other words, the “truths” that are useful to a strategic thinker are those that are shaped by context. To say that competitive advantage is important means entirely different things to a philanthropy, military unit, entrepreneur, or mayor of a small city.

Subjectivity is good. Do you agree?