Based on empirical evidence, the authors vividly put forth the idea that simplicity, focus, and mastering the art of continuous change , nearly trumps strategies of radical hange or constant reinvention
In a world so dominated by pundits who vouch for reinvention as an inevitable tool for companies to remain competitive, the authors Chris Zook & James Allen, by the virtue of their multi-year study of hundreds of organizations, believe the contrary. Based on empirical evidence, the authors vividly put forth the idea that simplicity, focus, and mastering the art of continuous change, nearly trumps strategies of radical change or constant reinvention. They believe that the best performing companies endure by maintaining simplicity at their core. These are the companies that don’t stray from their business model in search of radical renovation; instead, they build a repeatable business model that produces continuous improvement and allows them to rapidly adapt to change without succumbing to complexity.
The authors show how companies like Ikea, Nike, Apple, Toyota, and Tetra Pak amongst others, have consistently outperformed competitors not by responding to passing trends, but by repeating what works, based on three key principles: a strong, well-differentiated core; clear non-negotiables; and systems for closed loop learning. But, how do the great repeatable models succeed? The authors explain that a clear, repeatable differentiation (design principle 1) makes common measures and belief easier to create and use (design principle 2), which drives more transparency, learning and adaptation (design principle 3), which in turn pushes the entire business down an experience curve faster than less repeatable competitors. The authors have painstakingly explained the three design principles, devoting a separate chapter to each. Further, they have lucidly explained why great repeatable models stay ahead viz. by compressing the distance between management and the front line; by deciding better and faster; and by mastering the art of continuous improvement. All these backed up with numerous success examples.
However, the authors agree that every strong idea brings with it some potential vulnerabilities that must be recognized and guarded against. It cites the examples of Dell, Nokia, and Starbucks, each of which represented a model of focus and a paradigm of repeatability. Yet, these very companies stalled for different reasons. The authors point out two prominent reasons viz. loss of focus and failure to adapt fast enough.
As a ready reference for readers, the authors have compiled ‘the top ten conclusions’ which compresses most of the most important insights shared in the book. These conclusions cut across different topics – how the world is changing and what it means for strategy, the power of the great repeatable models, the design principles of strategies build around repeatable models, and their benefits, and of course, their limitations. A central insight from this book is that complexity has become the silent killer of growth strategies; it creeps up on companies, confounds learning, slows response time, and saps organizational and management energy.