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LEAD AND DISRUPT:
how to solve the innovator’s dilemma
Charles A O’Reilly III and Michael L Tushman, Stanford UP, 2016
A
ristotle said: “Whom the gods want to destroy, they send 40 years of success.”
It’s the classic ‘innovator’s dilemma’; the better a business gets at doing one
thing, the harder it is to change course – leaving them increasingly vulnerable to new
entrants. But are corporate lifespans really inevitably so limited? Not according to
these Stanford University and Harvard Business School heavyweights. The authors
explore the concept of ‘ambidextrous leadership’ – the key new skill companies
need to stare disruption in the face. It used to be that when the business developed
a new venture, the best solution was to ‘spin it off’ quickly. But that misses out on
the crucial assets of the main business. Defined as being able to stay competitive in
core markets, while also advancing into new domains, the new approach revolves
around developing a leadership style that can both ‘exploit’ and ‘explore’ at the same
time. Easier said than done.
OBLIQUITY
John Kay, Profile Books, 2011
F
or decades, ICI was the UK’s most successful manufacturing company, built on
championing the “responsible application of chemistry”. In 1991, having survived
a hostile takeover attempt, the company shifted gears and rejected its previously
“fluffy” mission in favour of a harder-edged vision to “create value for shareholders
through market leadership and a competitive cost base”. Following that, its decline
was relentless. A similar story lies behind the decline of Boeing, which used to “eat,
breathe and sleep the world of aeronautics” until its new CEO Phil Condit told staff
they would need to shift to “a value-based environment where unit cost, ROI, and
shareholder return are the measures by which you’ll be judged”. The direct pursuit
of profit destroyed value at ICI and Boeing at a rate of knots. Why? Distinguished
economist John Kay argues that, paradoxically, our goals are best achieved when
we approach them obliquely rather than directly. More prosaically, in the words of
GE’s CEO from 1981-2000 Jack Welch, the direct pursuit of “shareholder value is the
dumbest idea in the world”.
HOW BRANDS GROW:
What marketers don’t know
Byron Sharp, Oxford UP, 2010
T
here’s a lot of pseudo-science in marketing, such as the truism that 80% of
sales come from 20% of customers, or that retention is more cost-effective and
strategic than acquisition. Marketing professor Byron Sharp cuts through these claims
with robust, evidence-based research that is depressingly rare in the field. Of course,
there are brand loyalists, like Donald Trump quaffing multiple Cokes each day. But
to focus on segments like this, offer them loyalty programmes or to expend effort
‘differentiating’ your brand, is a mistake. Brands grow through increasing light usage
across the broadest, mass-market spectrum. The average Coca-Cola consumer only
buys one can a month, after all. Most consumers spend just a few moments a year
thinking about your brand. The key is building a consistent and distinctive brand
identity that is front of mind in those brief moments. This discipline-shredding book
might just convince you of something you’ve suspected for a while: many corporate
marketers don’t actually know how marketing works.
March – May 2019
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