Living on the Fault Line: Managing for Shareholder Value in the Age of the Internet [Paperback]

Those are obvious observations, but Moore, with his 'hands-on' attitude to directing companies, provides a survival strategy for these potential dinosaurs. To start with, he says, such companies must intensify their focus on core activities and outsource all non-core activities, functions he actually prefers to label 'context'. The need for this paring down of focus flows from the fact that business cycles are now being accelerated by the Internet, and companies no longer have the luxury of weeks or months in which to respond to competitive moves. Having to deal with an abundance of non-core activities, says Moore, simply distracts management and eats into their time.

Another key factor is the company's stock price. In the Internet era, senior managers have to watch share movements much more closely because they represent a mirror (sometimes a distorted one) of their performance. This is pure survival of the fittest, argues Moore. "Individual investors are often wrong, but collectively, over time, they cannot be," says Moore. This is important for business leaders to remember because over time, "capital flows to competitive advantage and abandons competitive disadvantage", he says. It also provides an information system that can advise business managers which markets they should invest their resources in and which they should get out of.

His message, however, will not be new to many business leaders. Renaming 'non-core outsourcing' as 'context outsourcing' does not add much to a well-understood concept. And the CEO of every listed company in the world surely knows that a low stock price cannot be ignored for long.

Other advice also borders on the obvious: "Remember, the goal is to pick markets based on the size of their untapped potential, not their total size." Or: "In growth sectors where sustainable competitive advantage is largely a function of staking out early positions in developing markets, a pure P&L [profit and loss] approach to strategy and planning is horribly misguided."

In the absence of much genuinely new material, the book is augmented with summaries of Moore's previous books, something that strengthens the sense that the author is searching for ideas for books and conference keynotes in order to keep his own career 'inside the tornado'.

This book combines the perspectives of many different books into one. As a result of spanning so much material, the book operates at about 100,000 feet above sea level. Although the view is breathtaking, you can't see most of the details. For managers and executives, that means being left with concepts that they may have trouble implementing. The way to overcome that weakness is to go on to read other books that do address these issues in more detail like Built to Last and The Innovator's Dilemma.

The first part is familiar material about how the Internet is changing business. It goes on to focus on the IT department of a traditional company as the weak link in responding to Internet opportunities and challenges.

The second part repeats Moore's shareholder value perspectives from The Gorilla Game (a book I liked much better than this one). Basically, he feels that management and the board should look at the level and direction of stock price as a litmus test on the company's strategy and implementation.

Part three hits the high points of relating well in the middle of creating a competitive advantage while technology is changing.

Part four discusses how top performance changes at times during a technological wave. This is probably the most interesting part of the book. It is quite well done.

Part five examines the key concept of focusing on what creates competitive advantage internally, and getting rid of everything else by outsourcing and partnering. I thought this was a little too simple. In many cases, your internal perspective may be the worst place to try to do key activities. For example, Wal-Mart reportedly began to do better with Internet development after it did more outsourcing in this core area. Keep in mind though that apparently Wal-Mart is still struggling with the Internet. This section was really addressing The Innovator's Dilemma material and concepts.

Finally, how do you institutionalize the way your company will attack the Internet and future technologies? This is routine material from a variety of books, and you can skip it if you are well read in business.

If you like your business books highly condensed and simplified, you'll rate this book a 5 star. If you like more detail, you'll rate it lower. If you have to have lots of detail, skip this book. It is resistible for you.

After you read this book, I suggest you think about when you may communicate at too high a level of generalization. People need it simple. See the excellent book, Simplicity, more more ideas!

This book is a good summary of why to companies downsize,outsource and for anyone who read "Killer App"; why Roland Coarse came up with the law of diminishing firms ...

In the Internet age virtual companies working in Marketspace acting big while remaining small will be the norm for the 21st century.