77 Q UA RT E R _ 0 2 _ 2 0 2 6 on replicating a competitor’s source of advan tage—efforts that rarely succeed. Instead, they should aim to be good enough in the competitor’s capability while reinforcing their own sources of advantage. Why? Our research has yielded an important insight about the difference between winning and not losing. When we looked at the actions of pairs of competitors, we found a good- enough threshold—the market’s expectations for basic value. Falling below this threshold due to a critical failure (a reputational crisis, for exam ple, or a labor shortage that hampers production) can negate the benefits of investment in expanding competi tive advantage. Conversely, investing more in elements that don’t differen tiate the offerings in customers’ eyes will not yield returns. The key is to stay in the middle, except for the few areas that matter. Talent can illustrate the concept of winning versus not losing on a capability. In industries where expertise is the offering (such as professional services), where critical skills are scarce, or where top-decile com panies far outperform the rest (such as niches of high-tech research where having the most-skilled workers disproportionately influences success), talent is an essential competitive advantage for being a market winner. - - - - - - - - An online version of this article is available on McKinsey.com Not losing on talent is quite dif ferent. There’s a large middle ground between not recruiting the very best talent (because it won’t pay divi dends to do so) and investing enough in people and culture to operate at the minimum expected threshold for the industry, then differentiating on other attributes such as ease of doing business, reliability, or cost. The distinction between how to win and how to not lose holds true across many attributes of a company’s over all competitive advantage, including innovation, operations, and brand.