Read All About It
from March/April 2006
If you really want to get your nose into heavy thinking about strategy, here are some of the best books on the subject:Competitive Strategy: Techniques for Analyzing Industries and Competitors, by Michael E. Porter (Free Press, 1980), is a pioneering book that created the framework of modern strategy. The first of its three parts, “General Analytical Techniques,” looks at three generic strategies—cost leadership, focus, and differentiation. Next comes competitive strategy in varying industry environments, and finally strategic decision-making inside the company. Porter extended his framework further in Competitive Advantage: Creating and Sustaining Superior Performance (Free Press, 1998), which introduced the term “value chain” to business literature. Oriented more toward practical managers, Competitive Advantage begins with a summary of the earlier volume. The Financial Times called Competitive Advantage “the most influential management book of the past quarter century.”
The Innovator’s Dilemma: When New Technologies Cause Great Firms to Fail , by Clayton M. Christensen (Harvard Business School Press, 1997), introduced managers
to the term “disruptive technology” and offers a comprehensive theory of how companies deal with technological change and business-model innovation. Christensen’s ideas are coherent and comprehensive, and the book has been influential. The author has continued to develop his thinking in a pair of subsequent works— The Innovator’s Solution: Creating and Sustaining Successful Growth , by Clayton M. Christensen and Michael E. Raynor (Harvard Business School Press, 2003), and Seeing What’s Next: Using the Theories of Innovation to Predict Industry Change , by Clayton M. Christensen, Scott D. Anthony, and Erik A. Roth (Harvard Business School Press, 2004).
Profit From the Core: Growth Strategy in an Era of Turbulence , by Chris Zook with James Allen (Harvard Business School Press, 2001), grew out of a 10-year study of 2,000 companies by the Boston management consulting firm Bain & Co., where Zook leads the global strategy practice. The main message is that most companies that are successful over the long term have a strategy focused and built on one or two well-defined core businesses. The follow-up, Beyond the Core: Expand Your Market Without Abandoning Your Roots , by Chris Zook (Harvard Business School Press, 2004), shows how companies can sustain growth through carefully planned expansion into areas away from but related to the core business.
Confronting Reality: Doing What Matters to Get Things Right , by Larry Bossidy and Ram Charan (Crown Business, 2004), is an excellent account of how real-world managers develop successful, integrated strategies, written by Bossidy, the retired chairman and CEO of Honeywell International, and author and consultant Charan. The book presents case studies of Cisco, Home Depot, Sun Microsystems, and several other companies.
Blue Ocean Strategy: How to Create Uncontested Market Space and Make Competition Irrelevant , by W. Chan Kim and Renée Mauborgne (Harvard Business School Press, 2005), is a recent addition that builds on Michael Porter’s general methodology to show how companies can break out of competitive markets and redefine their businesses. The authors, both professors at the French business school INSEAD, use examples like Southwest Airlines, which created a new and profitable market in the brutally competitive airline industry, and the Australian winemaker Casella, which has been successful using unorthodox marketing techniques to sell its Yellow Tail wines in a tough market.
The Role of the Board in Corporate Strategy: Report of the NACD Blue Ribbon Commission (National Association of Corporate Directors, 2000), a comprehensive guide to reviewing the board’s role in strategy development and oversight, includes detailed recommendations for how
to improve the strategy process. The book also offers 11 case studies illustrating different aspects of board engagement.
