Competing for the Future

Hamel and Prahalad caution that complacent managers who get too comfortable in doing things the way they have always done will see their companies fall behind. For instance, the authors consider the battle between IBM and Apple in the 1970s. Entrenched as the leading mainframe-computer maker, IBM failed to see the potential market for personal computers. That left the door wide open for Apple, which envisioned a computer for every man, woman and child. The authors write, "At worst, laggards follow the path of greatest familiarity. Challengers, on the other hand, follow the path of greatest opportunity, wherever it leads". They argue that business leaders need to be more than "maintenance engineers", worrying only about budget cutting, streamlining, re-engineering, and other old tactics. Definitely not for dilettantes, Competing for the Future is for managers who are serious about getting their companies in front. --Dan Ring, Amazon.com

Reader Reviews:

As important now as ever.. (2/2 people found this helpful)

It's been a number of years since Hamel co-wrote this seminal work, and its essence has been re-worked frequently, both by him and others. Indeed, it's a testament to its importance and relevance that it forms the backbone of so much of today's 'accepted wisdom'.

However, neither nostalgia or originality are the reasons to buy this book - rather it's simply that it's so well written - each argument is clear, progressing through why competitive strategy is not quite as mechanical as Porter would have us believe, and then illustrating how this has been achieved by well-known companies.

The result is a compelling and convincing read, which has stood the test of time - if you're looking for a framework for understanding how to compete with other firms, grab a copy.

Few would not profit from this book (2/2 people found this helpful)

Few companies that began the 1980s as industry leaders ended the decade with their leadership in tact and undiminished. Many household name companies saw their success eroded or destroyed by tides of technological, demographic and regulatory change and order-of-magnitude productivity gains made by nontraditional competitors. "Do you really have a global strategy", the first HBR article by Hamel and Prahalad, developed the theme that small companies could prevail against larger, richer companies by inventing new ways of doing more with less. Differences in resource effectiveness could not be explained by efficiency, labor or capital, but by amazingly ambitious goals that stretched beyond typical strategic plans, raising the question how such incredible goals could get past the credibility test and be made tangible and real to employees? Frequently the small challengers rewrote the rules of engagement; flexibility and speed were built atop supplier-management advantage, built atop quality advantages. Companies made commitments to particular skill areas a decade in advance of specific end-product markets. How did executives select which capabilities to build for the future? Some managers were foresightful, others imagined and gave birth to entirely new products and services. These managers created new competitive space while laggard companies protected the past rather than creating the future. Existing theory throws little light on what it takes to fundamentally reshape an industry and the gap provoked this book in which the goal is to enlarge the concept of the industry and not just the organization. Being incrementally better is not enough because a company that cannot imagine the future won't be around to enjoy it. This book is about strategy and how to think by drawing on the experience of companies that have overcome resource disadvantages to build positions of global leadership. It is about companies that escaped the curse of success to rebuild industry leadership a second or third time. It has been written for companies that believe that the best way to win is to rewrite the rules; it is for those who are not afraid to challenge orthodoxy, for those who prefer to build rather than cut, for those committed to making a difference and staking out the future first.

We need to ask ourselves eight questions:
- does senior management have a clear and broadly shared understanding of how the industry may be different in ten years time? Is management's view of the future clearly reflected in short-term priorities?
- How influential is my company in setting the new rules of competition within the industry? Is it regularly defining new ways of doing business and setting new standards of customer satisfaction?
- Is senior management fully alert to the dangers posed by new, unconventional rivals? Are potential threats to the current business model widely understood? Do senior executives possess a keen sense of urgency about the need to reinvent the current business model?
- Is my company pursuing growth and new business development with as much passion as it is pursuing operational efficiency and downsizing? Do we have a clear view of where the next revenue growth will come from?
- What percentage of our improvement efforts focuses on creating advantages new to the industry, and what percentage focuses on merely catching up to our competitors? Are competitors as eager to benchmark us, as we are to benchmark them?
- What is driving our improvement and transformation agenda - our own view of future opportunities or the actions of our competitors? Is our transformation agenda mostly offensive or defensive?
- Am I more of a maintenance engineer keeping today's business humming along or an architect imagining tomorrow's businesses? Do I devote more energy to prolonging the past than I do to creating the future?
- What is the balance between hope and anxiety in my company; between confidence in our ability to find and exploit opportunities for growth and new business development and concern about our ability to maintain competitiveness in our traditional businesses; between a sense of opportunity and a sense of vulnerability, both corporate and personal?

These are not rhetorical questions. We are told to get a pencil and rate our company because these questions go unanswered in many cases. Such questions challenge the assumption that top management is in control or even that their knowledge and experience may be irrelevant or wrong-headed for the future. The urgent drives out the important and the future goes largely unexplored; the capacity to act is considered to be more important than the capacity to imagine. A capacity to invent new industries and to reinvent old ones is a prerequisite for getting to the future first and a precondition for staying out in front. Gaining an understanding of how to accomplish this most difficult task is the central mission of this book.

What must we do to ensure that the industry evolves in a way that is maximally advantageous for us? What skills and capabilities must we begin building now if we are to occupy the industry high ground in the future? How should we organize for opportunities that may not fit neatly within the boundaries of current business units and divisions? The answers are to be found in this book. Armed with this information, a company can create a pro-active agenda for organizational transformation and can control its own destiny by controlling the destiny of its own industry. No company can escape the need to reskill its people, reshape its product portfolio, redesign its processes, and redirect its resources. There is not one future but hundreds; there can be as many prizes as runners; imagination is the only limiting factor. In no way does the success of one preordain the failure of another. What distinguishes leaders from laggards, and greatness form mediocrity is the ability to imagine what could be. If your senior management did not do well on the eight questions, then your company may not be around a decade from now. There are few who would not profit from reading this book.

Great Up-Date on Peter Drucker's Strategy Model (1/1 people found this helpful)

I am a corporate strategy consultant who works mostly with FORTUNE 200 companies. Strategic thinking has gone in and out of fashion in such companies several times in the last 40 years. With this book, Hamel and Prahalad have raised the value of strategic thinking in the current context in an effective way.

This book is clearly designed with the large company in mind, where the need to envision, communicate about, and organize for the future is most difficult. By breaking down strategic thinking into the elements described here, the authors make strategic thinking easier for those who have little experience.

Interestingly enough, many companies have "banned" strategic thinking in favor of more tactically-oriented programs that produce near-term cost reductions. Our firm did a survey of the most successful CEOs, and they reported that they felt that better strategies had the most potential to most improve their companies. These same CEOs also reported that they understood little about how to create better strategies. In such companies, COMPETING FOR THE FUTURE can provide an excellent balance.

A good book to read in conjunction with this one is Peter Drucker's, MANAGEMENT, which provides the intellectual heritage for many of these ideas. For people who need more detail than Drucker normally provides, COMPETING FOR THE FUTURE will be the more helpful book.

Concise, accessible and easy to apply (2/2 people found this helpful)

This is a very well written business book for practical application to a wide range of business scenarios - veyr readable style, well structured, and with useful illustrations and examples.

EXCELLENT FOR MANAGEMENT STUDENTS. Useful for revision. (1/1 people found this helpful)

I began to read the first page and found it very difficult to put the book down. HAMEL AND PRAHALAD go into great depth about the WHY! OF A SITUATION> THIS BOOK HELPED ME ACHIEVE AN EXCELLENT GRADE IN MY MANAGement exams of May 2000. THERE IS PHILOSOPHY BEHIND BUSINESS WHich has laid dormant for many years but HAMEL AND PRAHALAD HAVE RESEArched their work and have given us a gift of a catalyst for learning and applying more knowledge into our world of Making a success of our goals.

Gary Hamel, C.K. Prahalad

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