The Hindu Business Line : Race to double-digit growth

The way to achieve market triumph that leaves ‘rivals floundering in your wake and struggling to respond’ is ‘an action-oriented framework… founded on the concept of strategic excellence from beginning to end,’ declares ‘Breakout Strategy’ ( www.tatamcgrawhill.com).

The book, which is on ‘meeting the challenge of double-digit growth,’ is the result of the coming together from the US, Scotland and England, of the authors Sydney Finkelstein, Charles Harvey and Thomas Lawton, and a fusion of academic research and business application.

They reminisce how the project had its genesis in an in-house executive MBA programme for an investment bank in the mid-1990s, aimed at facilitating the fast-tracking of the best and the brightest asset managers into leadership roles. “The programme was global in its reach; we ran sessions in Hong Kong, London, New York, Paris, and Tokyo.”

Importantly, the three professors didn’t stop with asset managers; they went on to talk to ‘information technology consultants, health care professionals, industrial lubricant advisors, rail vehicle manufacturers, insurance underwriters, mobile communication providers, transport infrastructure consortia, airline managers, and a host of other executives,’ to identify the need for ‘an integrated strategy system that managers could understand easily and use straightaway.’

Instant remedies to solve fundamental business problems are a waste, the authors advise. Any pursuit of cure-all solutions is at odds with the strategic approach to business growth, they reason.

A common and tragic flaw, which they uncover, is the undue dependence on ‘a wealth of detail on industry and market trends’ in preference to ‘more fundamental thinking about what makes a product or service appealing or how the product or service can be delivered reliably to customers.’

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As a result of such mixed-up focus, managers down the line are faced with ‘the task of implementing strategies that they don’t understand fully and that are based on strategic thinking that doesn’t always appear to make sense.’

Confused and misapplied methodologies continue to blight the business landscape and up-end companies, the authors rue. “The inherent flaws that were implicated in some of the major business disasters of recent times, which are so apparent in retrospect, could well have been recognised much earlier had corporate leaders approached strategy with the rigour that the subject requires.”

The foremost finding in the book is that the secret of successful breakout companies is ‘not the sophistication of their approaches to strategy but the brilliance with which they execute a simple strategy.’

For instance, many winning approaches of companies such as Wal-Mart, Tesco, Microsoft, Fidelity, Ryanair and Starbucks are ‘often the simplest,’ be they about:

‘creating a workable vision by understanding needs and aspirations;

facing customers with a value proposition that covers all the important bases;

aligning what you do with what the customer really wants;

balancing the people and process sides of business to deliver on your promises; or

liberating the energies of any strategy’s toughest critics – those who work within the business.’

Another broad characteristic of breakout winners is the use of collaborative strategy, with processes in place for ‘acquisition and assimilation, innovation and new product development, business growth, and knowledge management.’

An example cited in the book is of Cemex, where ‘the rapid incorporation of acquired businesses into a global framework supported by advanced information systems has enabled tight cost management, correspondingly high returns on investment, and the generation of high levels of free cash flow to fund further acquisitions in emerging markets.’

A read worth burning the midnight oil for.

www.businessline.in/webextras

D. Murali

http://BookPeek.blogspot.com

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