“How to make fundamental change in your business model, while still running your business, is what this book is about.”, writes Chris in his 2007 book, because “Strategies are becoming obsolete faster than ever before.”
By ‘fundamental change’ he means a redefinition of the company’s core capabilities, because he in his research found that, while defending the status quo, big-bang acquisitions and diversification to hot markets have a success rate of 5-10%, the redefinition around unexploited capabilities, hidden customer assets or undeveloped (existing) platforms shows success rates of 20-40%.
And it makes sense to focus activities with proven higher success rates, or?
“A hidden asset, as I refer to it in this book, is something that you possess whose value, properties, or potential you have not fully appreciated or realized.”
(At romeo sierra consulting we call that a ‘talent’.)
“We define a core capability by its ability to create economic value (for a customer) and by its value to provide a source of differentiation against competitors.”
(At romeo sierra consulting we call that a ‘monopolistic moment’.)
We just want to focus here on one of the seven steps to become “unstoppable”, because this step demonstrates the central responsibility and desperately needed competence of the c-level / top management: “Ask your management team to list on a piece of paper the three or four capabilities that are most central to your ability to differentiate yourself against competitors or that create the most economic value for customers.
Ask them how the situation will shift in the future.
You might be surprised by the range – or the hesitancy – of their answers.”
Since the beginning of 2005 we (romeo sierra) made the same observation when confronting managers with our respective set of three (paired) questions aimed at their company or brand:
What Difference Do You Make? (Independence)
What Value Do You Create? (Brilliance)
Why would anybody Miss You? (Relevance)
At the end of his book Chris supports my true believe in his own words: “Yet my overwhelming feeling from seven years of studying success and failure among companies searching for profitable growth is that, ironically, many of the most challenging demons are internal and our most difficult foes are often ourselves. The following are also true:
If you do not know yourself, it is difficult to judge what you should become.
If you do not know where you are, it is difficult to decide where to go and how.
If you do not know what you are really good at, it is tough to know what to do.”
Even if this sounds really simple, reality really bites, as Chris writes:
“Sometimes to be reborn, you first must die.” … “For all companies that try to redefine, we estimate that the success rate is probably about one in five.” … “The typical time to recognize, execute, and reap the results of a new strategy was three to four years, although it can vary by industry and company circumstance.” … “… the renewal programs were formulated by new CEOs brought in to rejuvenate the strategy.” … “… were in or just entering a crisis in the core when they began to make broad changes.” … “Turbulence was the rule not the exception …”
To get a sincere process started, you should read Chris’ book first, perhaps you then call Bain, where he heads the Global Strategy Practice, or you just “… retreat to simplicity and see whether you have agreement to this question: “What are we the best at doing, and why?”
But please remember: Never underestimate the complexity of simplicity.
Of course, all the above sounds obvious, but who really questions himself (or his company’s or brand’s capabilities and assets) continuously? Most managers question themselves when it is too late to change the easy way.
Who really has an embracing change program in place? Who changes?