The One-Pager on “Competing for the Future†[DFHW: Living the 4-Hour Work Week]
I’m going to start a new activity for this blog: brief synopses of books I’ve read or reading — some on topics relevant to the 4HWW and some on topics relevant to my MBA program. It will consist simply of the title of the book, a one paragraph summary of the main ideas, and three bullets of the most important take-aways. I figure more can be said and remembered about an important book that way than in any other lengthy discourse.
Book: Competing for the Future
Author: Gary Hamel, C.K. Prahalad
In a nutshell: A strategy for staying successful in highly competitive industries is to periodically reinvent yourself and continuously challenge your own time-proven successes (”you can’t intercept the future by repeating the past”). This books helps readers understand the full scope of evaluating the market and the company and strategies for reinventing while reducing risk.
Top Three Take-aways / Unique Insights:
- Definition of a “profit engine”:
- Defining and understanding the served market
- Defining and understanding the value proposition for that market
- Determining the margin and value-added structure for services/products to the market
- Configuration of skills and assets to yield the margins
- Configuration of administrative and supporting systems to support continued yield
- Decomposing the Profit Engine into 4 parts, with 4 questions to be answered each
- The Concept of the Served Market
- What is the basic value proposition?
- How is the market segmented?
- What kind of customers are served?
- Where are the customers?
- (What customers and needs aren’t you serving?)
- Revenue and Margin Structure Definition
- Where in the business system do you take profit?
- Where do the margins come from?
- What determines the size of the margins?
- What are the major cost and price drivers?
- (Could profits be extracted at a different point in the supply chain?)
- Configuration of Skills and Assets
- What do you believe you know how to do well?
- What physical infrastructure supports the business?
- What kind of skills predominate in the company?
- What is the trajectory of development spending?
- (Might customer needs be served better by an alternate configuration of skills/assets?)
- Flexibility and Adaptiveness
- How alert are you to new value delivery models?
- How easily can investment programs be reoriented?
- How easily can infrastructure be reconfigured?
- Which constituencies would most resist change (inside and outside the company)
- (What is the vulnerability to market changing factors?)
- The Concept of the Served Market
- The best way to remain competitive is to be the first (or one of the first) to conceive of alternate value-delivery models, even if that means jeopardizing existing, legacy business models and profit engines. Be your own toughest competitor and challenge all your assumptions, even if in the short-term it adds more risk.
If you only had to read 10 pages: Pages 67-72
Original post here: rexreed
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