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The “Consumption Chain” Solution to Differentiation That Lasts (The Build Network post)

You can’t prevent your business model from eroding. But you can build a company that’s capable of managing business-model transitions. One way to do that, says Columbia Business School professor Rita Gunther McGrath, is to develop the habit of thinking creatively about differentiation.

McGrath first espoused this theory in her classic Harvard Business Review article, Discovering New Points of Differentiation, which she coauthored with Ian C. MacMillan in 1997. McGrath and MacMillian noted that companies, in seeking to differentiate themselves, had become too focused on end products or services and, as a result, were missing other opportunities to interact with customers. “We believe that if companies open up their creative thinking to their customers’ entire experience with a product or service–what we call the consumption chain–they can uncover opportunities to position their offerings in ways that they, and their competitors, would never have thought possible,” they wrote.

That was 15 years ago. Build recently caught up with McGrath to ask what has or hasn’t changed since then. Here are a few highlights of the conversation..

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