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Leading the Revolution helps firms develop new wealth from business concept innovation
By Chuck Frey
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Summary:
This book is full of practical but profound insights and strategies that can help you to implement business concept innovation in your organization. A must read!
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If you are a leader or manager, or simply want to be a positive force for change within your company, then Leading the Revolution by Gary Hamel is a must-read. This remarkable book is a practical guide to developing and sustaining a focus on business concept innovation, which can help you to transform the rules of competition in your industry, profoundly alter customer expectations and help you to generate new sources of wealth for you and your company.
Incremental innovation is no longer enough
In Part 1 of Leading the Revolution, “Facing up to the Revolution,” Hamel lays the foundation for the rest of this fascinating book. Most organizations today, he says, tend to be focused on incremental improvement and innovation – initiatives like total quality programs and knowledge management systems are all about “getting better” versus “getting different” (i.e., strategic differentiation). Most companies in any given industry or market tend to follow the same unwritten rules for how business is done; deviations from these de facto strategies are few and far between. What’s more, in today’s fast-changing world, these existing strategies tend to “decay” over time. That is, all strategies tend to become less effective and less capable of generating new wealth for your organization over time.
What’s needed in today’s world of rapid, often discontinuous change are innovations that are equally radical and discontinuous – in other words, innovations that rewrite the rules of customer service and competition. Prime examples of this strategy include the way in which Amazon.com blindsided existing brick-and-mortar booksellers – both in terms of the number of books it offered and in the unique customer service innovations it pioneered – and Dell’s build-to-order business model, which continues to revolutionize the PC industry.
The key: business concept innovation
In Part 2, “Finding the Revolution,” Hamel encourages executives to think beyond product innovation, which is necessary but tends to deliver a diminishing rate of return to most companies. Product innovations and product line extensions are often easily copied by competitors, which means that basing your strategy only on them usually delivers only an incremental return on investment. A more powerful strategy, Hamel explains, can be found in business concept innovation, which encompasses a much broader scope of opportunities beyond the product itself.
In this section of the book, Hamel also explains how to become your own “seer” – a voice of strategic opportunity and business concept innovation within your company. He outlines a number of practical strategies for cultivating a revolutionary point of view and tactics for uncovering fresh new insights and opportunities about customer needs. As you might expect, Hamel is not a fan or scenario planning (a popular strategic planning method), which he dismisses as another example of incremental thinking. “Most companies fail to create the future not because they fail to predict it, but because they fail to imagine it,” he explains.
How to become an activist
The last two sections of the book, entitled “Igniting the Revolution” and “Sustaining the Revolution,” are devoted to teaching the reader how to become an activist – not a wild-eyed revolutionary, bent on destroying your company’s existing culture and values – but rather a positive force for change, supporting your organization’s core values while also building a convincing case for business concept innovation. In other words, Hamel shows you how to build grass-roots support for your ideas based on a small but growing cadre of like-minded intrapreneurs, from the bottom up. Hamel includes several fascinating case histories in this part of the book: how a small group of activists transformed IBM’s attitude toward the Internet, and how one engineer at Sony convinced this electronics conglomerate to support development of the PlayStation – which has become one of the company’s most profitable product lines worldwide.
Hamel also provides a number of fascinating, detailed case histories of “gray-haired revolutionaries” – large, older companies that have successfully implemented business concept innovation, including Charles Schwab, United Parcel Service, Cemex and Royal Dutch Shell. These case histories contain many valuable ideas and insights that you may be able to adapt to your company’s situation.
Conclusion
Hamel’s focus on practical yet revolutionary business strategies and his emphasis on the “how-tos” of implementing them elevates Leading the Revolution above most other business strategy books that I’ve read. Hamel has a genuine talent for building a practical set of strategies and tactics that literally anyone can employ to make a difference within their company. The book is peppered with interesting and engaging examples, case histories, and “why didn’t I think of that?” insights that compel you to keep reading.
After reading this book, I’m convinced that the opportunities for innovators are truly astounding. If you want to be a positive force of change within your company, and on behalf of the customers you serve, this book is a must read!
Submitted on: 10/30/2002
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