Summary of the book 1. Getting Off the Treadmill 1. How Competition for the Future is Different 1. Learning to Forget 1.
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Summary of the book 1. Getting Off the Treadmill 1. How Competition for the Future is Different 1. Learning to Forget 1. Competing for Industry Foresight 1. Crafting Strategic Architecture 1. Strategy as Stretch 1. Strategy as Leverage 1. Competing to Shape the Future 1.
Building Gateways to the Future 1. Embedding the Core Competence Perspective 1. Securing the Future 1. Thinking Differently. The authors describe their book as a guide for managers who are willing to focus on the long-term and not only short-term success of the corporation a guide to imagine the future and afterwards to create it.
Like the authors state in the end of the book, it is not only about making a difference to managers but also about making a difference to customers as well as employees. The book is divided into 12 chapters, which I am succeeding going to summarise. The main reason is in their opinion the accelerating pace of industry change especially regarding technological, demographic and regulatory issues.
The increasing pace of industry change led to discrepancies between the pace of change in the industry environment and the pace of change within the companies themselves concerning structure, values and skills. Hamel and Prahalad argue, that as reasons for restructuring are often lacks in efficiency and productivity mentioned, which are often measured in ratios like Return On Investment.
Numerator management for example raising net income however is in their opinion likely harder and more time consuming. Reengineering aims to focus every process in the company in the direction of customer satisfaction, reduced cycle time and total quality, but is probably not the right tool to root out sources of future competitive advantages.
Rather proactive than reactive organisational transformation is needed. The authors plead furthermore for a new view of strategy that focuses not only on becoming smaller, better and faster but also on becoming different, what means being capable of fundamentally reconceive oneself, regenerate ones core strategies as well as being capable of reinvent ones industry.
This implies a view of strategy that recognises the need to unlearn and develop great foresight as well as the need to construct a strategic architecture and better resource leverage. Those primary challenges of becoming the initiator of industry transformation have to be followed by a secondary challenge of organisational transformation. The end of the transformation process is not clear without ambiguity, because there is not one future but hundreds. In this respect the authors call business as the ability to uniquely imagine what could be - the art that distinguishes leaders from laggards.
Hamel and Prahalad consider competition for the future not as an extrapolation of the past, because new industrial structures will supersede old ones. That means existing industries will be profoundly transformed and entirely new industries will be born.
These opportunities are inherently global whereby for example global distribution, forming of alliances and assembling of competencies will be necessary. In order to build opportunity share, companies have to have a commitment to build competence leadership in new areas, long before the precise shape and structure of future markets becomes completely obvious.
Furthermore future opportunities are likely to be found between or across traditional business unit boundaries and may need access to competencies of different business units. Thereby unlearning means selective forgetting and is even more difficult than learning because of the emotional and economic equity invested in the past.
Learning to forget is followed by the need to diversify corporate genetics and enlarge the managerial frames wherefore managers with curiosity, humility and the willingness to learn upward learning are needed. Regarding Hamel and Prahalad competing for industry foresight is the first stage of competition for the future and aims to build the best possible assumption base about the future as well as establish ones company as the intellectual leader of the industry.
Hamel and Prahalad argue that the solid factual foundation distinguishes industry foresight from a vision. Furthermore they are of the opinion that because of bureaucracy, multiple levels of approval and a lack of personal freedom it is almost impossible for large companies to be truly innovative.
In order to overcome this impediment, they suggest entrepreneurial teams which are allowed to break out of the dominant managerial frame and have access to worldwide resources. The foundation of industry foresight are the observation of weak signals and trend lines but even more important a childlike deep and boundless curiosity and innocence about what could and should be.
The authors discuss several ways to escape current orthodoxies, thus they state that companies respective their managers have to look beyond existing served markets - enlarging their opportunity horizon - in order to discover white spaces. This means that managers must conceive companies as a portfolio of core competencies broad class of customer benefits rather than a portfolio of individual business units specific product-market focus. Furthermore they have to abstract away from business units to underlying core competencies as well as from traditional product and service definitions to underlying functionality elements.
Other ways to escape orthodoxies are to challenge industry assumptions about price-performance trade offs and ensure an eclectic mix of individual perspectives within the company as well as create an eclectic set of perspectives in every employee. Furthermore managers should use metaphors and analogies to transfer the unfamiliar picture of the future to every employee.
The authors argue that customers are notoriously lacking in foresight and therefore companies have also to overcome the disadvantages of being customer-led.
Last but not least industry foresight comes from the ability to empathize with basic human needs. Hamel and Prahalad state that after a company has imagined the future through industry foresight, it has to map and find the path that leads into the future through strategic architecture. Further they define strategic architecture as a broad agenda for functionality deployment and competence acquisition. This means that a strategic architecture rather identifies the major capabilities to be built than specify exactly how they are to be built.
Hamel and Prahalad describe the process of crafting a strategic architecture as a discovery process of successive approximation which implies the risks of under-specifying and over-specifying the future as well. The process is also recurrent and challenging insofar that it is full of frustration, surprises, unexpected insights, missed deadlines and possibly recursive.
In order to build a strategic architecture a careful blend of industry foresight and resource commitment is needed. None of both should go to far ahead the other one because risk-taking is the enemy of constancy even if a significant degree of residual uncertainty is likely to remain. The authors point out that after a company has imagined the future through industry foresight as well as mapped and found the path that leads into the future through strategic architecture, it needs energy in financial, but even more important, in emotional and intellectual terms in order to reach the future.
This emotional and intellectual energy for the journey is summarised by the concept of strategic intent. According to Hamel and Prahalad strategic intent is more differentiated than strategic architecture and conveys a sense of direction, discovery and destiny; what means that it is a tangible goal that can be described and it implies a particular point of view about the long-term market or competitive position that a company hopes to build.
Strategic intent must be personalised for every employee so that each of them understands the precise way in which his contribution is crucial to the achievement of strategic intent. The milestones between a companies present position and its strategic intent, corporate challenges, are more concerned with what is desirable than with what is evidently obtainable.
Hamel and Prahalad state that corporate challenges can only be met by doing different - by fundamentally rethinking processes, roles and responsibilities. In order to do so, companies have to use more often motivators like competitor and customer benchmarks. About: Gary Hamel, C. Add to cart. Table of Contents 1. Thinking Differently 2. Opinion about the book 3. Personal example of the books idea 1. How Competition for the Future is Different Hamel and Prahalad consider competition for the future not as an extrapolation of the past, because new industrial structures will supersede old ones.
Competing for Industry Foresight Regarding Hamel and Prahalad competing for industry foresight is the first stage of competition for the future and aims to build the best possible assumption base about the future as well as establish ones company as the intellectual leader of the industry.
Crafting Strategic Architecture Hamel and Prahalad state that after a company has imagined the future through industry foresight, it has to map and find the path that leads into the future through strategic architecture. Strategy as Stretch The authors point out that after a company has imagined the future through industry foresight as well as mapped and found the path that leads into the future through strategic architecture, it needs energy in financial, but even more important, in emotional and intellectual terms in order to reach the future.
Competing for the Future
Will your company survive the changes that may strike your industry in the next five to ten years? The task requires enormous commitment and intellectual energy. Difficult questions about the future also challenge the belief that top managers possess a clear, compelling view of the opportunities and risks awaiting their company. The urgent drives out the truly important. Managers spend too much time catching up to competitors by cutting costs and improving quality and productivity.