A colleague recommended an older book for me to read, Gary Hamel’s and C.K. Prahalad’s Competing for the Future – this was first published some 17 years ago, but seemed like an interesting book so I gave it a go. And it was a good thing that I did, as it turned out to be one of the better business books out there. It also turned out to be echoing (or, given its publishing date, preceding) familiar advice from some of my favorite authors like Jeffrey Pfeffer and Bob Sutton.
Despite its age, Competing for the Future translates very well to today. Understandably some of the examples mentioned are outdated, but that’s always the risk with example cases. One of the most important messages is to reward unorthodoxy – and exhorting the fact that it’s vital to be unorthodox – something that is still missed in most companies. A story from a big pharma company chairman illustrates it well, in that he regularly tracks down projects that were rejected long before they reached the board. Why?
I know that whatever we get to see at the board level is going to be pretty consistent with our existing model of the business. I’m looking for the projects that are a bit off the wall, that could change our model of the business.
Another point well worth heeding is that restructuring or acquisitions often don’t work, and that incessant downsizing is the equivalent of corporate anorexia. A company is surrendering today’s business if it gets smaller faster than it gets better, and surrendering tomorrow’s business when it gets better without becoming different. A related point that is also highlighted is that most companies are overmanaged and underled.
One eerily accurate prediction is made when talking about the music business. Remember, this was in 1994;
Now imagine a world in which there is a broadband, two-way communication into the home. You can call up on a screen the top 1,000 or 10,000 pieces of music – song-by-song, symphony-by-symphony, aria-by-aria. You can read what the critics have said about the particular selection and listen to a 90-second sample, to see if it suits your musical tastes. Once satisfied, you can have your chosen selections downloaded onto a digital recording device. At the end of the month, you get a bill. Take it a step further, and you can even imagine a “home juke box” where you could order up an evening’s music – personally customized, of course – to accompany a 1960s rock-and-roll party, a romantic dinner for two, or a backyard Tex-Mex barbeque. [..] Think what will happen to record stores as we know them – poof, they’re gone!
Sound familiar? The “music-by-theme” bit is still lacking a bit, but other than that detail, all of the above – and more – is delivered by Apple’s products, Spotify et al. Of course the book also has its share of predictions that didn’t pan out just as expected, but that’s the nature of innovation – win some, lose some. When searching for innovation, Hamel & Prahalad warn against being customer-led; customers are notoriously lacking in foresight, and by being customer-led you end up being a perpetual follower, and worse.
Overall, the book highlights many, many excellent points and gives great advice. It has its flaws, such as the outdated examples and a relatively shallow selection of example companies, but the advice offered is quite solid. Yet, after 20 years, at least 90% of the companies out there have not taken any of this advice, which is somewhat discouraging. Many points have also thereafter been successfully re-iterated and re-established in more recent best-selling business books by other authors. So what’s wrong? Do the people who have the power to change things – or feel they have the power to change things, as it’s rightly pointed out that revolutions don’t start from the top – in their company not read these, or just fail to act / follow through?