Dealing with Darwin: How Great Companies Innovate at Every Phase of Their Evolutionby Geoffrey Moore
Geoffrey Moore is one of the most respected and bestselling names in business books. In his widely quoted Crossing the Chasm, he identified and addressed the greatest challenge facing new ventures. Now he’s back with a book for established businesses that need to learn how to adapt—or suffer the slow declines into marginalized performance that/b>… See more details below
Geoffrey Moore is one of the most respected and bestselling names in business books. In his widely quoted Crossing the Chasm, he identified and addressed the greatest challenge facing new ventures. Now he’s back with a book for established businesses that need to learn how to adapt—or suffer the slow declines into marginalized performance that have characterized so many Fortune 500 icons in recent years.
Deregulation, globalization, and e-commerce are exerting unprecedented pressures on company profits. In this new economic ecosystem, companies must dramatically differentiate from their direct competitors—or risk declining performance and eventual extinction. But how do companies choose the right innovation strategy? Or overcome internal inertia that resists the kind of radical commitments needed to truly set the company’s offers apart?
Illustrating his arguments with more than one hundred examples and a full-length case study based on his unprecedented access to Cisco Systems, Moore shows businesses how to meet today’s Darwinian challenges, whether they’re producing commodity products or customized services. For companies whose competitive differentiation to the marketplace is still effective, he demonstrates how innovations in execution can help boost productivity, whether a company is competing in a growth market, a mature market, or even a declining market. For companies in danger of succumbing to competitive pressures, he shows how to overcome inertia by engaging the entire corporate community in an unceasing commitment to innovate and evolve.
For any business competing in today’s eat-or-be-eaten economic jungle, this groundbreaking guide shows not only how to survive, but also thrive.
Business is becoming increasingly competitive - globalization, deregulation and commoditization have taken their toll everywhere you look. Companies are forced to innovate or fold; it's a constant pressure that goes beyond mere competition - it's about survival. Who will the survivors be? The ones that win the scarce resources of customer purchases; the ones that gain customer preference because of their innovation; the ones creating next-generation offers and raising the bar for the future. It's evolution in every sense of the word. Survival of the fittest. In this summary, bestselling author and consultant Geoffrey A. Moore puts into clear relief the fact that innovation is not an optional "nice-to-have" in business - to innovate forever is a design specification. It's no longer a strategy; it's a requirement.
The economic argument in favor of innovation focuses on pricing power - avoiding commoditization and the resulting vendor price wars brought about by consumers simply searching for the best deal. Over time in these situations, the market stabilizes at prices at or below cost, creating returns for investors below the cost of capital. Investors do not stay in marketplaces like these very long. When innovation is applied, however, offers become more and more differentiated from one another, leading to different ones becoming the preferred choice for different market segments. Vendors in those segments then have pricing power, and the markets stabilize at prices well above cost, creating returns above the cost of capital, attracting more investment.
The Economics of Innovation
In essence, when innovation creates differentiation, it creates attractive economic returns. This is not, however, the only possible outcome from innovation. In addition to differentiation, there are three other possible outcomes: neutralization, productivity improvement and waste.
Types of Innovation
To better understand the various types of innovation, Moore organizes these types into clusters. The innovation types fall into these four clusters or innovation zones: the product leadership zone, the customer intimacy zone, the operational excellence zone and the category renewal zone. Beyond these zones, innovation strategies are formed, one that gives every promise of creating the separation you need from your direct competitors, earning the customer preference your profit margins require. Now, says Moore, you must overcome the inertia of your own organization that fosters resistance to making the changes necessary to implement it.
Inertia is not the enemy of innovation, but it does resist it at the point of change. Therefore, at that very point, management must learn to deconstruct inertia in order to reconstitute it elsewhere. You must extract resources from context in order to repurpose them for core. Context includes most of the things you do to meet commitments to key stakeholders and to comply with industry laws and standards. Core is that which differentiates your company to create sustainable competitive advantage. Extracting resources from context to repurpose for core accomplishes three key objectives:
- It solves your balance sheet problem, enabling you to fund your future from your current asset base.
- It solves your income statement problem, enabling you to increase the revenues and margins earned by your current asset base.
- It solves your inertia problem. By taking mass out of context, you reduce its inertial resistance to core. The more mass you move from context to core, the more powerful this change dynamic will be.
Natural selection is a game with no time-outs. It does, however, allow for unlimited substitutions. Resource recycling not only delivers efficiency; it also provides refreshment. There is respite for the weary as long as it is followed by an energized willingness to re-engage. Communities need abiding sources of employment. Customers need stable sources of supply. Governments need a vital tax base. Investors need opportunities to create attractive returns. We are all more or less strategically aligned. We are just being asked to execute at a new level of competitiveness. Copyright © 2006 Soundview Executive Book Summaries
- Portfolio Hardcover
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- 6.10(w) x 9.10(h) x 1.20(d)
- Age Range:
- 18 Years
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