Customer Reviews

The Breakthrough Imperative: How the Best Managers Get Outstanding Results

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When I started reading this book it was like discovering that an old friend you hadn't seen for a while was staying at the same hotel. It made me want to catch up.

The old friend in this case was the experience curve. It was a staple of management wisdom, lo these many years ago, but no one seems to talk about it any more, even though it's a simple and powerful tool.

A good thing about this book is that the authors' aims are clear, helpful, and modest. They tell us: "Our aim is not to convey new strategies; rather it is to articulate a short list of business fundamentals that are essential to performance improvement and then show how to apply them." They do that well.

The first chapter is about the "Two Keys to Breakthrough Results." We learn about the increasing pressure on CEOs and others to deliver results quickly. The "two keys" that the authors identify turn out to be both obvious and in need of re-stating.

Key 1: Breakthrough leaders have a deep understanding of the fundamental laws of business.

Key 2: Breakthrough leaders identify and follow a clear path to performance improvement based on their assessment of the organization's potential using their understanding of the fundamental laws of business.

It's tempting to blow this off as third grade stuff, but it's profoundly simple. And it's worth re-stating because so many people seem to have forgotten it. For a recent example of someone who got it, read Jim Kilts' book about the turnaround at Gillette or Lou Gerstner's book about the turnaround at IBM.

In both cases you'll witness a seasoned and savvy executive bring a deep understanding of the laws of business to bear to determine the best course of action to take. Then you'll see that same executive lay out a clear path to improvement (easier said than done) and follow it. It's simple, but it's not easy.

To help you get at those "laws of business" the authors lay out four of them. Each one gets its own chapter.

Law 1: Costs and prices always decline. This is my old friend, the experience curve. It's a visual tool that shows the relationship between accumulated experience and the long-term decline in costs. This tool isn't as popular as it used to be, but it's still a powerful way to understand market dynamics and it's easy to use.

Law 2: Competitive position determines your options. The authors suggest another chart, this one showing you and your competitors' returns on assets plotted against your market shares. Do this and it's easy to see why driving down costs should be a continuing obsession.

Law 3: Customers and profit pools don't stand still. The advice is basic: protect your existing profit pool while you find new ones. The value-added in this book is the description of some of the predictable aspects of the ways customers' tastes and behaviors change.

Law 4: Simplicity gets results. You don't have to stand out on every dimension. Three is enough. The simpler you can keep your product line and your strategy, the more likely you are to win in the end.

The authors tell us that their four laws aren't prescriptions. They're descriptions of how business works. Then they move on to strategy or, as they put it, defining your path to success. That's what the final three chapters of the book are about.

These fellows must have taken a course in "branding" because in these chapters they can't seem to use the language that everyone else uses. I can only guess, but it seems like they think calling a goal a "point of arrival" will make them stand out from the crowd. Perhaps it will, but only in the same way as a lime green polyester leisure suit.

Make no mistake, there is a lot of good stuff in these chapters, but it's much harder to get at it than the material on the four basic laws. There's an appendix on the use of the experience curve that will be useful if you're not familiar with the tool. Another appendix is titled "The Full-Potential Performance-Improvement Diagnostic." I would have preferred a title like "How to figure out what to do."

If you're looking for simple ways to understand and analyze your business and competitive situation, you should buy The Breakthrough Imperative. The introductory chapters and the chapters on the Four Laws are excellent. The chapters on strategy and execution are not as crisp, but still helpful. But, this will be a good read and a ready-reference regardless of your level of experience. You'll want to keep it handy.

I am a CEO of consulting firm based in Doha, Qatar. One of my recent contarcts involves turning aroung a major corporation which consist of nine divisions and each division is good enough to be a company on it own. I read an article depicted from the book in the HBR. The contents are well arranged, the language is easily understood, and the practical usage of the book is best of all.

I am really indebted to the authors for sharing with us such a deep experience.

The Breakthrough Imperative is one of the best business books I have read in the past 10 years. After reading the book I required all my Senior Management Team to read the book and write me a simple two page report. Page One - what did you learn, Page two - how are you going to apply those learning to drive the business forward? Since the reading assignment I follow up with my Executives during weekly one on ones to keep the learning concepts fresh and most importantly applied in our business day to day. The book has been an excellent resource for all of us to learn from other's success and failures. I highly recommend other CEOs share this book with their Leadership Teams!

According to Gottfredson and Schaubert, there are two "keys" to achieving breakthrough results: "One is that [successful managers] have a deep understanding of the fundamental laws of business. Because of that, they see things others don't, do things others won't even consider, and avoid the mistakes that can trap even the best leaders. The other key is that they identify and follow a clear oath to performance improvement, based on an assessment of their organization's full potential. They know how to use the fundamentals to diagnose their starting point accurately, craft a realistic and compelling set of objectives, and map out a trajectory from one to the other. Neither one - understanding the fundamentals nor following the path - is enough by itself. It is the combination that enables strong execution and leads to success."

Fortunately for Gottfredson and Schaubert, who wrote this book with John Case and Kath Tsakalakis, they were able to supplement their combined 50+ years of consulting experience and their own research with several other studies conducted by colleagues at Bain & Company, notably Chris Zook (author of several brilliant books, most recently Profit from the Core: A Return to Growth in Turbulent Times that was published earlier this year) who compiled a database of 1,804 public companies in the G8 economies throughout a period of ten years. The insights that were revealed and the lessons learned serve as the framework for Gottfredson and Saenz's book. Among their conclusions was their shared belief that four laws "provide most of the fundamental knowledge necessary to guide a successful manager's initial diagnosis and oath to success." Here they are.

1. Costs and prices always decline: "Great managers apply the experience curve correctly."

2. Competitive position determines your options: ""Great managers know where they fall on the chart and what it implies for their performance-improvement options."

3. Customers and profit pools don't stand still: "Great managers anticipate profit pool shifts and plan their strategies and tactics accordingly."

4. Simplicity gets results: "Great managers keep it simple."

As Gottfredson and Steve Schaubert explain, "These laws depend on, and reflect, a fundamental fact of business, which is that [as Peter Drucker asserted decades ago] if you don't have any customers you don't have any business. The laws are powerful precisely because each one describes how to meet your customers' needs in ways that are superior to your competition."

They devote a separate chapter to each of the four Laws and throughout their narrative anchor their observations, insights, and recommendations in real-world situations. I especially appreciate their skillful use of reader-friendly devices such as Figures, Tables, and at the conclusion of each chapter an "Implications for the General Manager" checklist that identifies specific action steps to implement what is appropriate in the chapter's material. I strongly recommend that these "Implications" checklists be frequently reviewed to ensure that initiatives are on course and progressing well. Presumably Gottfredson and Schaubert share my own high regard for the wisdom of what Thomas Edison observed long ago: "Vision without execution is hallucination."

The "imperative" to which the book's title refers is for managers to achieve "outstanding" results, of course, but also meanwhile to extend and enrich their knowledge of "the fundamental laws of business." Reading and then re-reading this book will make a substantial contribution to the achievement of that objective. However, knowledge in and of itself is insufficient, even knowledge of how to use knowledge effectively. Hence the importance of the material provided in Chapters Six ("Where You're Starting From"), Seven ("Where You're Going: Mapping Your Point of Arrival"), and Eight ("The Road to Results"). Readers will also appreciate the material provided in three appendices in which, once again, Gottfredson and Schaubert make skillful use of Figures and Tables.

I view this as a "must read and then re-read at least once more" book. Its narrative is research and evidence driven. Its observations, insights, and recommendations are relevant to almost any organization, whatever its size and nature may be. And finally, Mark Gottfredson and Steve Schaubert establish and then sustain a direct and collegial rapport with their reader.

This is a brilliant achievement. Bravo!

I bought this book after seeing a slide from a presentation the authors gave on line about keys to breakthrough and driving breakthrough. The material seems relevant and has some very good points about driving your business and where you are with respect to competition, profit pools, etc.

Exceptional read on how leaders must obey four laws in the expanding global economy. The first law, cost and prices always decline, helps leaders understand the dynamics of global competition and disruption theory. The second law, competitive position determines your options, helps leaders understand the importance of being one or two in their market space. The third law, customers and profit pools do not stand still, helps leaders understand the fast pace of innovation. The fourth law, simplicity gets results helps leaders think through their strategies and boil them down to the critical few initiatives that make a difference. One of the best business books released in 2008.

In the context of the economic meltdown of 2007-2009, the cases and lessons cited in this book ring false. Were it not for the demonstration that falsehoods and mismanagement can wreak havoc on an otherwise smooth path to success, the lessons therein would have been valid. The meltdown includes the slide from power and profitability of several companies cited as cases of 'Breakthough' leadership in this untimely guide. It's a pity to have to break that bubble so summarily but that's the nicest that I can honestly be. To add insult upon injury, the author thinks nothing of duplicating earlier chapter pages and diagrams in later ones to pad the covers unnecessarily. It doesn't take a very astute read to realize that you've been hoodwinked into overpaying by twice for wasted paper.