Good to see the Boston Consulting Group encourage us to focus on the core business (as we should have been doing in the first place), protect product development, look at competitors’ weaknesses etc. – and all with analysis too, rather than gut feel !

Unfortunate, though, that some of the proposals conflict, and some are positively dangerous. “.. begin with aggressive moves to cut costs and increase efficiency … some means of lowering break-even points are obvious: stripping out layers of the organization … consolidating central functions … “.

If you’re in danger of going under, maybe, but I keep coming across companies where everyone is ludicrously flat out and simply failing to get important things done. The strong impression is that many managements are grossly under-staffed, not top-heavy. And what goes out the door when you throw out those “time-wasters”? – the organization’s memory and knowledge of how to do simple, critical things. And those constant reorganizations do the same – in function after function, no-one knows how to do things because none of them have been there more than five minutes.

What you need in present conditions is settled people who really know what they are doing. [Reminds me of the three dimensions of organizational capability - the ability to do critical tasks well, fast, and cheap - see chapter 9 of Strategic Management Dynamics - analyst-driven obsession with doing things cheap does serious damage to doing things well, and fast.]

Then the article repeats that other current fad “Rethink your business model” – almost always wrong and in present conditions a bad distraction from making what you have work really effectively.

There’s some good stuff too though, so take a look – but with brain engaged!

Merely seeing the pattern is interesting but so what? This is a fundamental tool for something virtually no companies do well – truly competitive strategy.

The basic principles are simple:

• Trying to do a bit better than everyone, at everything, to get a bit more market share [as most firms do] is hopeless – very costly, everyone can see what you are doing and does the same, and it just doesn’t work.
• Competitors vary in their scale and strength, and therefore in the benefit you would gain if they weren’t around.

… so it is clearly best to pick your 1-2 key victims and focus competitive efforts just on those - for which the ‘power curve’ is the ideal tool. Having picked which wounded wildebeest to take down, some simple principles help identify how to do it.  These are explained in chapter 5 of Strategic Management Dynamics, and you can download the extract that explains how to destroy competitors [the power curve is what you need for Figure 5.27].