How to Grow When Markets Don't: Discovering the New Drivers of Growth [Paperback]

The argument in the book is that, in mature economies/markets, many firms have come to a point where growth by traditional means is no longer feasible. That is, firms have to think of means other than new product innovation, M&A, international expansion and pricing. The most clever route to growth, the authors say, is "demand innovation", i.e. to find out new revenue generation areas which were not thought of by your company or by your customers before. In order to do that, i.e. to create a new-generation demand, you must first consider your hidden assets and second analyze your customers. When you find areas of friction in your customers' processes and when you can use your hiden assets to improve those processes, you are into next-generation demand.

The idea sounds excellent. In fact, it is excellent. However the method suggested for working out new demand areas is not new at all. First of all, the hidden assets concepts is ver much like the "core competencies" as put forward by Hamel&Prahalad in "Competing for the Future". It is exactly the same theme. Moreover, eliminating the customers'/clients' frictions is also not a very new idea. You can find a much more elaborate and admirable version of this idea in McGrath&MacMillan's "The Entrepreneurial Mindset". This latter work is a million times better as regards the robustness of the methodology.

So, the whole book, in a nutshell, boils down to two suggestions:

1. Study your B2B client's internal processes and see if you can make them outsource some of their sub-processes to your company so that you "innovate" a revenue area which was not thought before (at least by you). So, "demand innovation" reduces to finding new areas for outsourcing, but from a sub-contractors' point of view.
2. Develop some of your core competencies to such levels of efficiency that you can conduct those services much more efficiently for your client than if they did it themselves.

The book has "few" detailed case studies for supporting these ideas. But only one or two are thought-provoking (Cardinal Health especially).

A good portion of the book is devoted to suggestions regarding corporate-culture for promoting next-generation demand thinking. What kind of a corporate culture, management approach and leadership structure are conducive to transforming your company into a demand-innovator? This portion is also about stating what is already known. There isn't anything novel and interesting.

There is a reference to a web-site of the book, claiming that there is considerable support stuff in there. However the material in the web-site is terribly shallow and looks more like a marketing gimmick to attract readers to MERCER web-site. In any case, if there is more useful stuff which is necessary, why not put them in the book in the first place?

In conclusion, I thought the book was not worth reading. It could be written in four or five pages, including the case studies. I could have read the above editorails and suffice with what was explained there. That is all you need. I wasted my time, you don't waste yours.

I took a chance with this book after hearing Mr. Slywotzky on the radio and realizing that I still had a decent balance on an Amazon gift certificate. As the owner/operator of a small wire manufacturing company, the messages about the problems of commoditization and global overcapacity hit home with me. My company has always focused on staying in niche businesses that were not quite large enough to be of interest to larger manufacturers. It worked well for literally decades until about a year and a half ago when we found that a certain "small" product line was not too small to escape the attention of some mainland Chinese businesses. After taking a 60% gross margin haircut (Ouch!!!) to retain the business, I started to become very scared.

At this same time in another product line, we began manufacturing some equipment to more easily dispense an oscillated wire product. We luckily decided to lease this machine rather than sell it, and it has become a lynchpin in our ability to establish and maintain a dominant position in this market. As this machinery has evolved, it also became the rough outline of a business model that I continue to try to pursue. This book is a very good refinement of my rough idea plus a lot more. I intend to try to use the authors' ideas to think about a new product line that has some disruptive elements to it(yes, I think that Clayton Chritensen is worthwhile, too).

I may just like this book because they are preaching to the choir, and I feel that I have arrived at a lot of the same conclusions, albeit in much rougher form, on my own. One thing that I do know is that all the games of incremental, internal change are not enough when mainland China shows up in your backyard.

P.S. - One thing the authors' don't touch on much, but that should be noted is that the ones who are most responsible for commoditizing your products are your own customers. You can be sure that the bigger they are, the more sophisticated the sourcing organization that they have in Asia.

They go on to offer valuable guidance, supported by a variety of
compelling and fresh examples, on how companies in mature industries can
find new growth by identifying customer "higher order needs" that
represent new opportunities and then using their "hidden assets" to meet
these needs profitably.

The book also departs from many other management/strategy books in
addressing head-on the organizational challenges associated with making
new growth concepts work in large companies. I found the description of
organizational barriers to growth hauntingly familiar and the
prescriptions on how to work around them practical and well-grounded in
the real world experiences of the companies profiled.

If I have any criticism of the book, it is that I would have liked to
have seen more discussion around shorter-term growth tactics. The
authors do devote a chapter to this topic, with some interesting
examples of ways to pursue higher order growth right now, but in today's
environment, the importance of short-term improvement can't be
overstated.

All in all, Slywotzky and Wise have come up with thought-provoking
manifesto for finding a path to growth amid a stagnant economy.