Posts Tagged ‘core competence’

Competing for the future

Competing for the future is one of the best management books I have ever read, and it also has some important lessons for entrepreneurs or anybody who is thinking about starting a business. Competing for the future is written by Gary Hamel and C.K. Prahalad who are among the best and most original management thinkers in this generation and their most famous contribution to the field of strategy is probably that of core competencies.

Some of the important consequences of Hamel’s and Prahalad’s work is that while companies have core competencies and things they do extremely well, industries change and evolve and companies might not be able to change with them and so they become stuck while continuing to focus on the things that were yesterdays success parameters. Of course managers could avoid some of that by asking themselves more questions about where their industries are headed in the future, however when a certain strategy has brought you success in the past it is very difficult to change the direction the company is going in. Also don’t underestimate how much ego is at stake, most corporate cultures still stigmatize failures so it is quite rare for the same CEOs to strategic shifts that differ significantly from the strategy followed in the past. Therefore a good way to look at it for entrepreneurs today is that there are a lot of companies today where the future has essentially caught up with them and all the systems and processes they have in place are geared to an industry an environment that is no longer relevant.

One of the quotes that I have really taken to me from the book is that “starting resource positions are a very poor indication of future leadership”. This is tremendous news for anybody who’s trying to start something, bacause it means that whoever is going to leas in ten years is not decided by who has the biggest budgets today. Many industries today change at a break-neck speed and there are loads of opportunities to find things that large corporations today are not doing very well and attack those niches with all the scrapiness and clout you have. As an example of this opportunity take advertising. Advertising continues to drive many business models online and yet as this blog shows the majority of the billions of advertising dollars are still spent on television and newspaper ads so there is still a lot of billions in advertising dollars thar are going to migrate from offline to online. Even outdoor advertising is still a huge market that seems ripe for disruptions, possibly by these guys.

So I suggest you go ahead and read the book and study some of the examples of successful cases where corporations that have been huge underdogs have ended up overtaken their much larger competitiors. You can buy the book and read reviews of it here.

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Posted: oktober 11th, 2010
Categories: startups
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