Ultimately, only companies themselves can
achieve and sustain competitive advantage. To do
so, they must act on the fundamentals described
above. In particular, they must recognize the central
role of innovation— and the uncomfortable truth that
innovation grows out of pressure and challenge. It
takes leadership to create a dynamic, challenging
environment. And it takes leadership to recognize
the all-too-easy escape routes that appear to offer a
path to competitive advantage, but are actually
short-cuts to failure. For example, it is tempting to
rely on cooperative research and development proj-
ects to lower the cost and risk of research. But they
can divert company attention and resources from
proprietary research efforts and will all but eliminate
the prospects for real innovation.