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Transcript: It takes an entrepreneurial spirit to be competitive today

Businessmen run a competitive race. You need an entrepreneurial spirit to be competitive in business today.

KARL MOORE – This is Karl Moore of the Desautels Faculty of Management at McGill University, Talking Management for The Globe and Mail. Today I am delighted to speak to David Teece who is a senior professor at the Haas Business School University of California, Berkeley.

Good afternoon, David.

DAVID TEECE – Good afternoon, Karl.

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KARL MOORE – David, you have written a lot of important work about competitive strategy and how do we do that. How do you see competitive strategy going forward these days?

DAVID TEECE – Competitive strategy has to go forward in a different tempo then it has in the past. The thing that has been missing from strategy analysis is an assessment and an understanding of capabilities, organizational capabilities – how they are created, how they evolve, and how they transform. Without an understanding of that, you may understand markets well and maybe you possibly understand your competition but you won't understand yourself and nor will you understand the fundamental foundations of competitive advantage. Because at the end of the day, how well you do is a function of the capabilities you have and can build and the market place you are addressing and your ability to match the two.

KARL MOORE – So how does a firm understand its capabilities – the things that really drive their ability to be successful in competition?

DAVID TEECE – One would hope that managers will have a deep understanding of their organization's capabilities but the fact is they often don't because a lot of those capabilities have been built up over time and are part of the history of the company. One way to understand your capabilities is to understand where you have been, to understand your own history – the things you can do well, the things that you can't do well and to understand why you do well the things you do well and then to look at the environment and see if those things are still relevant today and into the future. At the end of the day it requires a manager not only to sense opportunities but to be able to seize the minute, requires a new type of manager – one that I call the entrepreneurial manager. Not just for small companies but also for big companies, maybe even especially for big companies, you need entrepreneurial managers. That is maybe an oxymoron in some people's vocabulary but it's not in mine.

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