One of my favorite movies is Akira Kurosawa’s classic Seven Samurai, in which mercenary warriors transform a fearful village of farmers into a formidable fighting force.
The samurai don’t achieve this by just handing the villagers swords and expecting them to fight bandits. Instead, they look for existing talents that can be repurposed. They don’t see mere farmers; they see potential swordsmen in their grain-harvesting motions and strong warriors in their rice threshing.
It’s a lesson in how success usually lies in harnessing and adapting existing strengths rather than in grasping for entirely new ones—and it’s one that leaders put to use in any successful transformation. Businesses rarely succeed by making radical culture shifts and becoming something different; they do so by understanding what makes them great and building on that. They find their superpowers.
Find Your Superpowers
This isn’t a new idea. It’s been 35 years since C.K. Prahalad and Gary Hamel wrote the seminal Core Competence of the Corporation in the Harvard Business Review. But companies still regularly go astray because they ignore their unique skills and try to be something they’re not.
Boeing is the most recent example of this. Its superpowers have always included managing extraordinary manufacturing complexity. Building a modern airliner isn’t just difficult; it’s an engineering and logistical marvel that requires thousands of components and people to work in harmony. In an attempt to cut costs, though, Boeing outsourced much of its production and attempted to manage a network of external suppliers—a core ability it does not possess. The result has been delays, safety issues, and a tarnished reputation. Boeing’s stock has fallen 13% in the past year, while the broader market surged. Boeing’s outsourcing experiment failed because it ignored what it was great at—a trap that companies fall into all the time.
Abilities over Assets
Why does this happen? It’s because traditional strategy techniques are present-focused. They emphasize a company’s assets rather than its abilities—what a company has, over what it knows how to do. And while it’s great if a company owns a large fleet of trucks, it may be far more useful to see those trucks as the ability to manage a complex delivery network. Trucks can be bought and sold. Logistics competence takes time and effort to develop.
During a corporate acquisition, buyers often focus too heavily on tangible assets like factories, vehicle fleets, or intellectual property. If they’re lucky, they later find that the greater value lay in the acquired company’s abilities. When Kraft Foods acquired Cadbury in 2010, the $20 billion it paid turned out to be a steal because it wasn’t just getting a global chocolate brand, it was getting a company that excelled in its ability to develop management talent on a global scale. That’s part of what makes its successor company, Mondelez, great today.
To be sure, it’s a lot easier to see an asset than an ability, especially when it’s yourself. My teammates and I have worked with a number of private equity firms to develop growth strategies for companies they’ve purchased. Much of the initial due diligence around an acquisition focuses on clear measures like financial performance. Some of the savvier P.E. firms dig into information about customer satisfaction. But from the outside, it can be easy to see that a company is successful but incredibly hard to know why it’s successful. Even after the acquisition, those abilities are often obscured by what we call “management folklore.” For instance, leaders might swear that their success is due to superior customer service. On closer examination, we find out that customers are actually loyal because the products are just a little bit cheaper than competitors.
That’s why it’s crucial to dig deeper to separate fact from folklore, often bringing in outside perspectives to help a company identify its genuine superpowers. And if you want to know what really makes you personally great, don’t go on your own gut instinct. Ask your friends.
Stick To Your Game
Of course, this doesn’t imply that companies should stand still and never seek to reach for new capabilities. As Seven Samurai teaches us, abilities are transferable. But leaders have to know what those abilities are and how to adapt them rather than trying to turn the business into something it’s not. That’s like trying to turn a basketball player into a baseball star—and as Michael Jordan’s brief, inauspicious baseball career shows, even the greatest talent doesn’t translate directly into other roles.
Over the years, IBM has reinvented itself multiple times. I don’t know many technology companies that are over a hundred years old. The company started out making scales to weigh produce. Then they moved first to punched card machines, then on to mainframe computers, PCs, professional services, and now AI. Throughout all that time, they leveraged a few core strengths like direct B2B sales and early-stage research. The company has more patents than anyone. And six Nobel Prizes.
Conversely, IBM has also been good at recognizing its limitations and acquiring the capabilities it needs. In the early 2000s, the company realized it needed to evolve from just selling computers and software to being a leader in professional services. So it bought the consulting arm of PricewaterhouseCoopers.
But what it did next was a masterstroke. Rather than displacing the Pricewaterhouse leadership team, it put them in charge. In essence, they said “We just bought you. Now tell us what to do.” IBM demonstrated the humility and strategic clarity that made the transformation a success.
Contrast this with Hewlett-Packard. Under Carly Fiorina’s leadership, HP tried to pivot from being an innovation powerhouse to a services-driven company, emulating IBM but without acquiring the necessary abilities to do so. HP’s superpower was in technical invention, not service. The result was a hollowed-out company that lost its identity and competitive edge.
The lesson is that radical shifts in culture are really hard. When market shifts make change a matter of survival, it has to be attempted. But trying to be something different just to save money—as in Boeing’s case—is rarely worth it. It’s far better to figure out what you’re already good at and how to leverage that.
The Three Sources Of Superpowers
A company’s abilities spring from three sources: its talent, its culture, and its business activities.
The people within a company are its most immediate source of abilities. In the late 1990s, Jeff Bezos recognized that Amazon’s transformation from online bookseller to e-commerce behemoth would depend on having world-class logistics. At the time, Walmart was the preeminent leader in supply chain management. So rather than just buying warehouses and trucks or trying to turn his existing abilities to that task, Bezos headhunted several supply chain execs from Walmart. Similarly, General Motors has recently hired Tesla executives to develop its electric vehicle capabilities. New talent is the quickest way to develop new abilities. It’s also the easiest way to lose them if they walk out the door.
A company’s culture can also be a source of unique abilities. For years, Starbucks has succeeded because it has a deep culture of caring. The company has struggled in recent years because leaders focused on efficiency at the expense of this cultural strength.
A company’s business activities naturally shape its abilities. We tend to get good at something if we do it for a long time. That’s particularly true if we do it for really demanding customers. Four Seasons Hotels excels at customer service. It also stays good at it because its clientele demands it. By leveraging existing activities, companies can expand their abilities into new areas. Uber realized early on that its logistics network for ride-sharing could be adapted for food delivery, package delivery, and more.
Like the villagers in Seven Samurai, every company has unique abilities that can be identified, harnessed, and adapted to new opportunities. But finding them doesn’t come easy.
It requires brutal honesty, introspection, and a willingness to step back from day-to-day pressures to cut through corporate myths and reconnect with the business’s core identity. Instead of asking what you own, figure out what you know how to do—and then strive to do it better than anyone else. Over the lifetime of every company, there have been good days and bad days. Success isn’t about changing who you are. It’s about figuring out when your best days were and trying to have those days every day.