CitationDownload as .RIS
Emerald Group Publishing Limited
Copyright © 2004, Emerald Group Publishing Limited
Recipe for remodeling
Art KleinerArt Kleiner is the Director of Research and Reflection at Dialogos, a consulting firm based in Cambridge, MA; a faculty member at New York University's Interactive Telecommunications Program; and the "Culture & Change" columnist for strategy+business magazine. His most recent book is Who Really Matters: The Core Group Theory of Power, Privilege, and Success (Doubleday, 2003).
The Ultimate Competitive Advantage: Secrets of Continually Developing a More Profitable Business ModelDonald Mitchell and Carol ColesPublished by Berrett-Koehler
Anyone who buys business books through Amazon.com is familiar with Don Mitchell's other role, as one of Amazon's "top ten reviewers" – the amateur reviewers whose praise for books sold through this online store is most cited by purchasers as influential. Since Mitchell is their highest-rated business book reviewer, he is arguably one of the most widely read reviewers of business books in the world.
I learned about this firsthand when Mitchell posted a review of my own book, Who Really Matters: The Core Group Theory of Power, Privilege and Success. Suddenly, I became aware that scores of other Web sites pick up Amazon reviews automatically. The Web itself has become a kind of virtual echo chamber in which Don Mitchell's words (and those of other top Amazon reviewers) reverberate with the magnified impact of marbles hurled against the walls. In effect, through promoting his own books online by reviewing other peoples' books, Mr. Mitchell has redefined his own personal brand and almost casually redefined the criteria by which we judge business expertise in the process. And that makes him a living example of the kind of business model redefinition that he describes in this book.
To be sure, he also has a day job. Don Mitchell and his co-author, Carol Coles, are CEO and COO, respectively, of Mitchell and Company, their strategy consulting firm based in Cambridge, Massachusetts. This is their third book, and it steps afield from their own work as consultants. They attempt something similar to what former Stanford Business School instructor Jim Collins had attempted for Good to Great. Mitchell and Coles surveyed corporations that had achieved some credible success during the 1990s and tried to draw a common lesson from the most successful. Where Collins identified seven factors leading to success, they focused on one: the winning companies had all adapted their basic business model – their way of sourcing, pricing, packaging, and selling – to fit the changing demands of their business environment.
Business models were once the unspoken mainstays of corporate stability. Most mainstream companies, during the relatively slow-moving twentieth century, introduced many new products and services without changing their basic methods or approaches. The business environment, of course, became much more fluid and mutable during the 1980s, but many businesses never quite managed to adjust their business models accordingly. Thus, we have entire industries, such as the American chemical industry, once among the most innovative businesses in the world, that have retreated over the past 30 years into ever-more-desperate producers of commodities.
This book argues that the way out of this cul-de-sac is through perpetual reinvention, specifically by analyzing and rethinking business model development. Those who have not been to business school sometimes suspect that there is some kind of in-depth analytic "magic" about business model work – some secrets to the kingdom – that allows some businesses to succeed where others fail. But Mitchell and Coles, without quite saying so explicitly, make it clear that there are no such secrets. Strategic planning is best done as an iterative, imaginative exercise by real people with real businesses, trying things and building up their own capabilities and perspectives as they succeed and fail.
Mitchell and Coles tell one story after another of proprietors – in large and small companies – who took the trouble to look closely at their customers, their processes, their products, and their own interests and ask themselves: What could we be doing differently? Goldcorp, a mining company, finds untapped motherlodes by opening up its proprietary information to geologists around the world and inviting them to compete in a prospecting contest. Huffy breaks out of its staid bicycle business through a new line of scooters and an innovative strategy of outsourcing and Web-sales. Habitat for Humanity sets up a decentralized structure in which each regional locale, in effect, operates its own subsidiary of the global non-profit.
The stories are well researched and the analyses are brief (even terse) and complete. You could, in fact, work your way through this book and apply each one of the examples here to your own small business (or your own small part of a large business). Reading it is not unlike reading a cookbook, with the intent not of using any of the recipes verbatim, but of expanding your own culinary repertoire.
Unfortunately, it is hard to come away from the book without a headache. The format is dense, daunting, and confusing. There are numerous cross-references back and forth ("you'll read more about this company in chapter 9") without any clear or easy way to navigate to that chapter. The book could be far more effective if it were laid out like a developmental path for the readers – a way for readers to build their own capacity to explore their self-imposed limits (and remove them).
Even more egregious is the ingrained impersonality of The Ultimate Competitive Solution. No one comes to life in the pages of The Ultimate Competitive Advantage. We learn very little about the personal factors or even the organizational challenges that led various corporate leaders to pursue the innovative strategies that worked for them. The one compelling exception (a Harvard Square barber who reinvents himself as a de facto sage and traveling hairdresser) is so interesting that it makes you realize what the rest of the book could have been.
And that leads to a third problem: there is no unified set of precepts for developing business model innovation, or even a clear definition of how business model innovation differs from day-to-day strategic thinking. In the end, this book does not describe "thinking outside the box" so much as "playing with the box" – taking on a creative perspective within the constraints and parameters of your own business.
But these criticisms also confirm the strength of The Ultimate Competitive Advantage. It is going to find its audience in bright, energetic business people who are already convinced of the value of redefining the way they do business every year or two and are interested in looking for examples. Having browsed through this book, those people are now in a position to recognize the value in similar stories in Fortune, Business Week, Inc., Strategy & Business, or Fast Company. Ultimately, there may be some kind of universal process for business model redefinition to be devised, but you won't find it in the pages of any of those magazines, or in The Ultimate Competitive Advantage either. Nor, I suspect, do you need one. There is no analytic substitute for a collaborative, educated, experienced and innovative mind. For 30 years now, such minds have been drawn to business, rather than to the professions or government. Unfortunately, they are rarely given the credit they deserve or the opportunities they need. The Ultimate Competitive Advantage can help them see what they are capable of achieving.