- Hardcover: 192 pages
- Publisher: Harvard Business School Press (1 May 2005)
- Language: English
- ISBN-10: 1591397200
- ISBN-13: 978-1591397205
- Product Dimensions: 16.5 x 2.3 x 24 cm
- Average Customer Review: 2 customer reviews
- Amazon Bestsellers Rank: 1,889,569 in Books (See Top 100 in Books)
The Only Sustainable Edge: Why Business Strategy Depends On Productive Friction And Dynamic Specialization Hardcover – 1 May 2005
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'John Hagel and John Seely Brown are among the most insightful analysts of trends in management. [The Only Sustainable Edge] contains some compelling ideas about the challenge facing a lot of businesses: the growth in competition caused by lowered trade barriers and technological change…Some thoughtful analysis of probably the biggest business challenge of the age.' (Financial Times 2005-08-03)
Offshoring and outsourcing have generated substantial savings and often controversial news coverage for many companies. But these technologies aren't even close to being the real story. Two of business' leading strategy thinkers argue that the only sustainable advantage will come not from using technology to cut costs - but to get better faster than rivals. The authors identity two key forces - dynamic specialisation and productive friction that will dramatically reshape the competitive landscape and show what firms must do to understand, build and exploit these forces before their competitors do.See all Product description
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Authors John Hagel III and John Seely Brown focus on a few elements of this change as it had developed into management practices by 1995, outline the benefits of going in this direction, and describe what to do in broad outlines.
They build the book around five big themes:
1. Process outsourcing and offshoring provide access to specialization that you cannot otherwise match.
2. Flexible connections with suppliers, customers, and distributors allow you to make the most of these relationships.
3. Letting outsiders help establish the plan and agenda allows you to go in more productive directions than if your organization calls all of the shots.
4. Strategy development has to shift towards building capabilities from these dimensions. Prior approaches to strategy development are largely obsolete.
5. Shifting IT architecture and software to permit rapid flexibility in adding connections to other organizations.
The book will remind you of a shorter version of Michael Porter's books on competitive advantage and competitive strategy, except with a changed focus on developing capabilities. The book also shares Porter's affinity for using abstractions and general language that makes it hard to follow the arguments in the book. Also like Porter, you won't find very many examples.
What I found most inexplicable about the book is the authors that ignored the broader topic of continuing business model innovation (the issues presented here are just a subset of those opportunities) and the newer ways that companies are accessing new knowledge and capabilities (such as through the worldwide contests conducted by Goldcorp and Procter & Gamble). Indeed, I was shocked to see none of the most successful business model innovators cited in the book. Instead, there are lots of references to narrow studies that describe obsolete practices for strategy and implementation.
But if you want to learn how to rapidly throw together a global sourcing and distribution network for a large company that can be flexibly changed as the needs arise, this book is an excellent resource.
The book does a good job of showing how some companies are competing in ways that would be unimaginable just a few years ago and the authors lay out a compelling case that companies who do not respond to these new threats and opportunities are taking an enormous risk. Whether or not you believe the change will be as widespread as the book implies, the changes are real and will impact your business to at least some degree and this makes the book worth reading.
Most helpful customer reviews on Amazon.com
It's one of the few organizations that can operate with little to no concern for the bottom line. I mean, it's not like the military is going to go bankrupt or be subject to a hostile takeover. However, as one who has owned my owned business in the civilian sector and now works in the Federal sector, I can say that what works in business will work for the military. The principles of business are true regardless of the application. The idea of collaboration and cooperation can apply to any situation and in any organization that wants to survive...and not just survive, but thrive in the 21st century.
Of special interest to me was the concepts that the authors put forth on the importance of building relationships with other organizations that share a similar goal and working to change the paradigm of competition to cooperation, for the mutual benefit of all.
I am recommending this book to my supervisors, who are beginning to realize that in order to thrive in the current economy, we must think and act like a business.
Several years have not made the book less relevant, but more.
Yes, it reads a little intellectually...what do you expect from Harvard, right? But don't miss the the keen insights offered in this work because you stumble over some of the prose. Like I tell my kids, "Think, there's very little competition!" This is a book worth reading if you want to understand the dynamics of today's constantly-changing business culture.
If ideas are the new currency, as it is often said, then relationships are the new assets. How rich are you?
Hagel and Brown are two well pedigreed authors, and they attempt to explain their view on what is the next frontier in corporate strategy. The answer is that value of the firm lies not inside the firm but at its edge. The edge is a broad metaphor for geography (India, China and Brazil), maturity (old econ and new economy), physical edge (inside the firm as well the partners outside).
The key insights from this book are
- Two types of forces have converged to squeeze margins -Informational technology, and Public policy shifts. Try telling this to the 500,000 people who have lost their jobs in the valley.
- Three key elements of the new model for business strategy are
- A. Reconveive sources of strategic advantages by accelerated capability building across boundaries. This implies - Dynamic specialization, Connection and Coordination of 3rd parties and Leveraged capability building. Elaborated using the Li & Fung, Hong Kong retailer example.
- B. Master new mechanisms to build advantages - This implies focusing on efficiency as well as effectiveness, process outsourcing and offshoring, loose coupling of extended business processes and production friction
- C. Adopt new approaches for developing strategy
- Given this framework, conduct a diagnostic that inventories the key initiatives for the last 12 months, as well as the proposed initiatives for the next 5 years. At the end of this diagnostic, you should be able to identify what activities you can offshore and outsource and therefore you can dynamically specialize.
- Process networks is predicated on loose coupling of processes and Productive friction. Productive friction can be decomposed into four factors, Performance Metrics, People, Prototypes, and Pattern Recognition.
- Process networks are enabled by performance fabrics and IT is critical in achieving a solid performance fabric. Web services is critical in implementing this new fabric.
Hagel and Brown have transformed a solid Harvard Business Review paper into a 200 page book that does not do sufficient justice to the expended ink. The approach is geared towards policy wonks at think-tanks rather than day-to-day business manager trying to compete in a flattening world. The authors do not provide prescriptive advise that can be implemented easily. Their case examples are shallow and do not reflect the points well. I would have preferred if the authors take their core argument and apply it to a business unit within a Fortune 500 organization and experiment with their strategy before writing this book.
To the busy executive, one less book that is cluttering our target reading lists.
Your searching for practical strategic ideas,
Fred "Grounding" Sanford