November 10, 2005

Excerpts: Big Winners and Big Losers - Agility Based Strategy

By: 800-CEO-READ @ 7:19 PM – Filed under: Management & Workplace Culture

This table is from Appendix A of Big Winners and Big Losers by Alfred Marcus. The bestsellers listed in this table focus on the importance of agility in business strategy.

BookMain Argument About Agility
Clayton Christensen and Michael Raynor,The Innovator's Solution: Creating and Sustaining Successful Growth
  • Large companies lack agility; they almost exclusively make bets on incremental improvements.
  • They fail to enter markets perceived as undesirable, leaving this space uncontested because of what their executives believe to be the small profit margins.
  • They are too concerned about the core competencies that have served them well in the past.
  • Rapidly improving value requires breakthrough improvements; smaller,fringe companies tend to understand this better than large companies.
  • The small, fringe companies often are able to provide simple, convenient, low-cost products that appeal to less-demanding customers; therefore, they are able to gain entry and to challenge dominant firms.
  • Ultimately, the fringe companies move these innovations to the mainstream and pose formidable challenges to the established firms.
Sydney Finkelstein, Why Smart Executives Fail: What You Can Learn from Their Mistakes
  • Managers doggedly pursue the wrong goals based on their past successes.
  • Their failure comes from a lack of agilityan inability to see and pursue new opportunities.
  • This is reinforced by a reliance on the wrong type of metrics, which they use in evaluation.
  • Managers lack ofclear or realistic understanding of themselves and their companies hold them back.
Richard Foster and Sarah Kaplan, Creative Destruction: Why Companies That Are Built to Last Underperform the Market and How to Successfully Transform Them
  • Success depends on the ability to cast aside the value propositions ofthe past for the value propositions of the future.
  • Too many managers ignore important changes that are taking place in the external market; they focus on operational excellence to the exclusion of almost anything else.
  • Too many managers fail to make the rapid strategic adjustments that are needed for their firms' growth and survival.
  • Most are culturally locked in to their established routines.
  • They have a comfort zone that makes them unwilling to recognize that business models mature and become outmoded.
  • Survival depends on an understanding of this type of discontinuitythe regular creation and destruction of whole industries.
  • Most growth comes from the emergence offast-moving new entrants in the new industries.
Seth Godin, Purple Cow: Transform Your Business by Being Remarkable
  • Rapid movement to new markets is needed to set a company's products apart.
  • The main challenge that managers must meet is to create remarkable products; these products should be either "horrible" or "amazing."
  • The products should be absolutely unique and different.
  • The main task of management is to strive continuously to maintain theuniqueness of their products.
  • Managers must keep innovating; standing still is a sure-fired route to failure.
  • Managers have to keep shifting their business models for sake of rapid product development.
  • "Every purple cow fades unless it figures out how to be remarkable again."
Mary Kwak and David Yoffie, Judo Strategy: Turning Your Competitor's Strength to Your Advantage
  • Masters of movement continuously have shown that they have the ability to outmaneuver their opponents.
  • Small corporate "Davids" often have been able to defeat much larger corporate "Goliaths" because they are faster moving and more agile than their opponents.
  • To succeed,the upstarts manage to throw their competitors off balance, which neutralizes the competitors' initial advantage.
  • The upstarts also must maintain their own balance to survive the inevitable counterattacks that the competitors they have attacked will launch.
  • They have to go for the kill when they have the leverage to pin their opponents.
Adrian Slywotzky, Value Migration
  • The firms that succeed make the right moves; by making the right moves, they create value.
  • "Business chess is a game... (of) constant shuttling between a focus on the current move and imagining the next several moves out."
  • Managers must make these moves to avoid value loss and preempt the next growth cycle.
  • They must move from obsolete to new business designs; at least seven patterns of value migration exist.
  • Each pattern rests on an understanding of the customer and of innovative business designs.
  • Managers must understand market value, customer priorities, and future industry positions to make the right moves.
Adrian Slywotzky, Richard Wise, and Karl Weber, How to Grow Markets When Markets Don't
  • Corporate mindset, culture, history, leadership, and commitments reduce the ability that managers have to recognize and pursue new opportunities.
  • To succeed,managers should follow a sequence of moves to differentiate their company's offerings.
  • The aim should be to help customers make better decisions about their lives.
  • Companies better serve customers through innovations that address the hassles and issues surrounding a product, rather than making improvements in the product.
  • Managers should start by working on customers' most urgent problems, the issues customers constantly wrestle with, and the headaches they have.
  • They should not rely on classic product-focused strategies that involve simple product extensions, enhancements, and even product breakthroughs, because even these can be easily copied.
  • Winning moves come from having maverick ideas about product use.
  • Managers should focus on the customer value chainhow the customer spends time on and off the job.
  • Managers should look for bottlenecks, repetition, information gaps, and missed opportunities in the customer's value chain.
  • They should try to improve the customer's cost structure and reduce complexity in using products.
  • They also should speed products to the market and reduce risk and volatility in their use.
Donald Sull, Revival of the Fittest: Why Good Companies Go Bad and How Great Managers Remake Them
  • Inflexible commitments create inertia that prevents adjustments in business formulas that at one time were successful but are no longer so when competitive situations change.
  • Managers should not respond to the future by doing more of what worked well for them in the past.
  • They must make creative adjustments to the new situation.
  • The essence of these readjustments is to move away from old commitments and to create new ones.