In my review of
“Competing for the Future” by Gary Hamel and CK Prahalad
posted on Amazon.co.uk, I gave this famous strategy book a rating of Four Stars.
This means I think it is Good and Well Worth Reading.
Here is my book review.
Still relevant for big companies
This book popularised the important insights and ideas that came out of resource based strategy in the early 1990s because it’s one of the few strategy books that crossed over into the mainstream management books.
It was written at a time when business process re-engineering and restructuring were the popular panaceas for business success but there was one fundamental problem…you can’t cut your way to growth.
The authors were intrigued by the question of why smaller rivals could beat much bigger, richer companies and why market power and market share advantages were not a strong enough defence.
This focused their attention on the entire process of creating future competitive advantages. They noticed that some management teams had more foresight and competed to build future competencies rather than immediate market share.
I particularly like the power of these three questions asked early in the book to focus attention on how much time you really spend thinking about what may happen.
1 – What percentage of your time is spent on external rather than internal issues?
2 – Of this time, how much is spent considering how the world will be different in five to ten years time?
3 – Of the time devoted to looking outward and forward, how much of it is spent consulting with colleagues to build a shared, well tested view of the future?
They found a 40/30/20 rule which meant that just 2.4% of time was spent building a shared view of the future. In some cases it was less than 1% and that’s a sobering thought.
They argue that strategy should be about competing for future opportunity share rather than market. It is based on building competencies that give you the opportunities to compete in multiple markets, many of which don’t exist yet.
I accept that this is a very important book on strategy but it’s not one of my personal favourites.
Like many books that start out as articles in the Harvard Business Review, I have the feeling that it’s been padded to book length. It is impressive in the early sections where it makes clear how little time senior management spend thinking about the future and therefore, no wonder, there are problems with strategy.
It also feels dated with examples from the technology world that have long since been and gone.
It’s not a book for SME’s interested in competitive strategy. I first read the book when I was working in the corporate world but for small groups and I didn’t get much out of it that I thought I could take away and apply. It’s much more about how corporate strategy and how to build and develop core competencies that can be used across the entire organisation.
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