Business progress requires transitions from existing to projected states of affairs. The cognitive orientation needed for these movements depends on our ability to bring experience under the control of patterns that generate actionable clarity - lucidness suited to the circumstances in that it orients us: we keenly understand 'what to do next'. Efficacy of action - achieving the outcomes to which actions are directed - depends on ordering elements and relations in patterns that are suitably exact - that is, having the exactness necessary for projected states of affairs to become increasingly probable as transitions evolve. Explanatory Power is the capability that integrates these two dimensions.
Many firms do not go far enough to test the fit of their analyses within the larger fabric of explanation that separates the real from the specious, the probable from the improbable, or even the highly probable from the moderately probable. The strongest actionable clarity crystallizes at explanatory distances greater than most firms are accustomed to seeing. Ironically, those distances are much closer than we realize. But when they aren't reached-for, they might as well be a thousand miles away.
Other things being equal, a firm with greater Explanatory Power always has a competitive advantage. The probability of its realizing projected states of affairs is higher than the probability that attaches to the efforts of a firm with lesser Explanatory Power.