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The book starts with an introduction by Gary Hamel, who lists the books featured per issues - management, leadership, complexity, people, customerd, global, the future, renewal, competition, efficiency, strategy, and fun. Then, Stuart Crainer describes 50 management and business classics in alphabetical order of the authors. The classics featured range from Sun Tzu's Art of War (500 BC) and Machiavelli's The Prince (1513) through to modern works from Gary Hamel, Michael Porter, Peter Senge and Tom Peters. I do not think that anybody will argue the author's selection, since all books are truly greats. Since the complete book consists about 300 pages, each classic receives about 4-6 pages (introduction by Gary Hamel, biography of author(s), and a description of the main ideas and issues). This is enough for a quick insight and description, but do not expect to become a specialist in any of the issues.
The breakdown into issues makes it easy for readers to choose a subject/books. You can then have a quick flick through the particular summary/summaries. If you like the summary/summaries, you will still require to purchase or borrow the book(s) since the summaries are not that detailed. I used this book during my MBA-course (in particular during the earlier part), where I used it as a type of tool since it pointed me to the best book(s) for a particular subject. (I must admit that I also bought Stuart Crainer's 110 Ultimate Book of Business Gurus, but I do much more prefer/use this one.) The book is simple to use and is written in simple US-English.
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As one with an appreciation of literature, apart from being a teacher, I enjoyed the simple "read" of the book. I was able to complete it during my "free" periods during one school day. It is entertaining, yet thought provoking. I would recommend it as simply a good book to read and enjoy, as well as one to expose learners of the Spanish language to.
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To those who have already are familiar with the literature of developing new business models (such as Digital Capital), little in this book will be new. For those who are very focused on gradual improvement, the arguments here will be foreign and puzzling. Because of Gary Hamel's stature, many will read this book and begin to grasp the changed nature of the leadership and management challenges of the 21st century. Because of ways the argument is articulated and illustrated, many more will miss the point. That's too bad.
Basically, Hamel is arguing that the kinds of changes that most people think of as revolutionary need to become everyday occurrences. This observation is based on an accelerating rate of uncontrollable change and resulting opportunities for innovation; an economic environment where fewer companies prosper while more become mediocre or below average; more pressure for performance from investors; rapidly developing business skills in business process, product, market and model innovation; broad human potential to imagine more and make it happen; and potential for improved communication and application of innovation.
As a strategist, he does an excellent job of outlining the key issues of these factors, and how to organize an enterprise to accomplish more with these opportunities. By providing an analytical context for understanding the phenomena, he helps others understand what he describing intellectually. For those who have not had these experiences, the descriptions will seem to be alien emotionally.
The book is designed to be a clone of Tom Peters' more flamboyantly-conceived works like The Circle of Innovation. The language is extreme, often bordering on being vulgar, and will make many people uncomfortable. That appears to be Hamel's purpose. The pages are laid out in vivid colors, photographs and graphics making it seem unlike most business books you have read before. This will make the book seem even stranger to many. That also appears to be Hamel's purpose. The downside of this approach is that many will simply reject the message along with the way it is presented. That's a missed opportunity on Hamel's part and on the reader's part. The message is more important and serious than the presentation.
On the other hand, I would like to give the editors at Harvard Business School Press credit for being flexible in working with Hamel to create the presentation of this book.
The book's biggest weakness is in using Revolution as the metaphor. Any student of revolutions will quickly tell you that revolutions usually lead to counter revolutions after a period of maximum turmoil. That's not what Hamel is talking about, so his metaphor will confuse many while annoying others who do not want to turn their organizations into revolutionary bands. He doesn't seem to mean to invoke Revolution in either sense, but he never makes that point clear.
The second biggest weakness is that he presents a new paradigm that is very complex and requires mastering vast quantities of new skills for most people. Many readers will be overwhelmed by the prospect. So if they hear Hamel as a herald, they may be discouraged about following the herald.
The third biggest weakness is drawing major conclusions from very limited data. For example, he asserts that companies that master this new paradigm will eventually end up taking over the assets of companies that do not, after getting their customers and top employees. He cites AOL's merger with Time Warner as his example of an asset takeover. Without going into a full analysis, that example does not fully match this argument. For example, Gerry Levin from Time Warner will be the surviving CEO. And there are few other examples where new model companies end up buying the assets of old model companies.
The fourth weakness is encouraging people to grasp the potential of powerful, underlying trends without giving them much help in understanding how to do this. That is a subject for an entire book, not just a few pages in one.
One surprise for many people will be that the book is aimed more at the rebels at lower levels in a company than at its formal leaders. The rebels will learn a lot about how to become more effective in pushing their new ideas. Those who think like the conventional wisdom will find much less guidance to help them. In fact, Hamel has a side bar about working as a consultant with Royal Dutch/Shell and the difficulties that people there had in coming up with new ideas until the consultants trained them. Conventional wisdom is based on very complicated psychological processes, and changing that conventional wisdom in useful ways is a subject well beyond the scope of a brief chapter.
You should think of this book as introducing the subject of constantly improving business models, and inviting others to follow and flesh it out. I look forward to future books by Gary Hamel and other leading thinkers in further developing the questions posed here.
While you contemplate an expanded purpose for business enterprises, you should also consider what other purposes should be added that Hamel has not addressed. Hamel's having posed such an important question should not stop us from trying to build even better ones.
Within this general framework, in Chapter 3, Gary Hamel writes, "In the new economy, the unit of analysis for innovation is not a product or a technology-it's a business concept...I doubt you can find a dozen individuals in your company who share a common definition of your company's existing business concept. How could they if they can't even identify the elements of a business concept? Though consultants talk incessantly about 'business models,' I've never met one who has a coherent definition of what a business model actually is. It's hard to invent a new business concept if you can't agree on its components...To be an industry revolutionary, you must develop an instinctive capacity to think about business models in their entirety." Then, Hamel describes his business concept that comprises four major components and several subcomponents:
I- Core Strategy: It is the essence of how the firm chooses to compete.
1. Business Mission: This captures the overall 'objective' of the strategy-what the business model is designed to accomplish or deliver.
2. Product / Market Scope: This captures the essence of 'where' the firm competes-which customers, which geographies, and what product segments-and where, by implication, it doesn't compete.
3. Basis for Differentiation: This captures the essence of 'how' the firm competes and, in particular, how it competes 'differently' than its competitors.
II- Strategic Resources: These are unique firm-specific resources.
1. Core Competencies: This is what the firm 'knows.' (skills and unique capabilities)
2. Strategis Assets: They are what the firm owns such as brands, patents, infrastructure, proprietary standards, customer data, and anything else that is both rare and valuable.
3. Core Processes: This is what people in the firm actually 'do.' (activities)
III- Customer Interface
1. Fulfillment and Support: This refers to the way the firm 'goes to market,' how it actually 'reaches' customers-which channels it uses, what kind of customer support it offers, and what level of service it provides.
2. Information and Insight: This refers to all the knowledge that is collected from and utilized on behalf of customers.
3. Relationship Dynamics: This refers to the nature of the 'interaction' between the producer and the customer.
4. Pricing Structure: This refers to the price choices depending on the traditions of your industry.
IV- Value Network: It surrounds the firm, and which complements and amlifies the firm's own resources.
1. Suppliers
2. Partners
3. Coalitions
On the other hand, according to Hamel these four major components are linked together by three 'bridge' components:
1. Configuration: Intermediating between a company's core strategy and its strategic resources is first bridge component.
2. Customer Benefits: Intermediating between the core strategy and the customer interface is second bridge component.
3. Company Boundaries: Intermediating between a company's strategic resources and its value network is third bridge component.
More detailed discussion of these business concepts briefly mentioned/summarized above and the other unique ones, I highly recommend this invaluable study.
In the article they compared GTE and NEC, and suggested that NEC was an much better company because it focused on its core competence. And how did they measure the performance of GTE and NEC? Turnover!
But wait, what about profitability? Nothing whatsoever! The truth is, GTE left NEC in the dust in terms of profitability throughout the 1980s & 90s. Indeed, by mid/late 1990s, NEC was struggling. NEC's CEO (who held NEC's "core competence" so dearly) was replaced and the new CEO steered NEC away from its "core competence" in an attempt to regain profitability.
Go to the library and read the article and judge for yourself. Don't bother buying it.
The authors argue that top executives need "to identify, cultivate, and exploit the core competencies that make growth possible - indeed, they'll have to rethink the concept of the corporation itself." Top executives need to rethink the corporation as a portfolio of competencies instead of a portfolio of businesses. On the third page, the authors finally define core competencies: "Core competencies are the collective learning in the organization, especially how to coordinate diverse production skills and integrate multiple streams of technologies." The authors base this definition on the fact that a company's short-run competitiveness derives from the price/performance attributes of current products, but that long-run competitiveness derives from an ability to build, at lower cost and more speedily than competitors. Core competence is about the organization harmonizing streams of technology, communication, involvement, and a deep commitment to working across organizational boundaries. And the authors claim that unlike physical assets, core competence does not diminish with use. Than the authors continue with an important issue of describing what core competence is NOT. There are three tests to identify core competencies in a company: (1) potential access to a wide variety of markets; (2) significant contribution to the perceived customer benefits of the end product; and (3) it should be difficult to imitate. The authors provide insights into how to make the distinction between core competencies, core products, and end products. They also compare the traditional strategic business units with core competence, whereby they note that competence building does need a corporatewide strategic architecture in order to enable exploit competencies.
This article was a landmark in the strategic management field and was probably the most influential published in the 1990s. The authors followed this article up with their 1994-bestseller 'Competing for the Future'. Although the principle of 'core competence' is difficult to understand, it has a strong impact on diversified organizations. I sometimes wonder the relationship with Porter's 'Competitive Strategy' (1980), in particular the generic focus-strategy. Highly recommended to all managers and MBA-students. A true classic. The authors use understandable business US-English
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