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Living on the Fault Line : Managing for Shareholder Value in the Age of the Internet Hardcover – Bargain Price, May 30, 2000
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Moore contends the Internet has changed everything, and he means it. As many companies are now discovering, market share is worth more than earnings; virtual integration trumps vertical integration; and the IT department, once relegated to a stuffy back office, is no longer "about the business--it is the business." The best proxy of a company's success? Try its stock price. Moore writes, "Stock price is in effect an information system about competitive advantage, it can help you sort through which markets to attack, which strategies to pursue, which partners to endorse, and which tactics to execute.... Capital, in other words, flows to competitive advantage and abandons competitive disadvantage."
For some, Moore's prescriptions may seem over the top. But those grappling for a handhold on the Internet economy will find much to ponder here. For example, managers faced with a scarcity of time and resources will find his analysis of core and context a powerful prism to manage by. He defines "core" as activities that differentiate a company in the marketplace and thereby drive its stock price. "Context" is simply everything else the company already does. His suggestion: assign your best people to the core and outsource as much of the context as possible.
If you've enjoyed Moore's previous work, you'll find Living on the Fault Line a must. If you've never read Moore before, get this on your bookshelf before your competition does. Engaging and highly readable, this one's a keeper. --Harry C. Edwards --This text refers to an out of print or unavailable edition of this title.
From Publishers Weekly
Copyright 2000 Reed Business Information, Inc. --This text refers to an out of print or unavailable edition of this title.
More About the Author
Moore's life's work has focused on the market dynamics surrounding disruptive innovations. His first book, Crossing the Chasm, focuses on the challenges start-up companies face transitioning from early adopting to mainstream customers. It has sold more than a million copies, and its third edition has been revised such that the majority of its examples and case studies reference companies come to prominence from the past decade. Moore's most recent work, Escape Velocity, addresses the challenge large enterprises face when they seek to add a new line of business to their established portfolio. It has been the basis of much of his recent consulting.
Irish by heritage, Moore has yet to meet a microphone he didn't like and gives between 50 and 80 speeches a year. One theme that has received a lot of attention recently is the transition in enterprise IT investment focus from Systems of Record to Systems of Engagement. This is driving the deployment of a new cloud infrastructure to complement the legacy client-server stack, creating massive markets for a next generation of tech industry leaders.
Moore has a bachelors in American literature from Stanford University and a PhD in English literature from the University of Washington. After teaching English for four years at Olivet College, he came back to the Bay Area with his wife and family and began a career in high tech as a training specialist. Over time he transitioned first into sales and then into marketing, finally finding his niche in marketing consulting, working first at Regis McKenna Inc, then with the three firms he helped found: The Chasm Group, Chasm Institute, and TCG Advisors. Today he is chairman emeritus of all three.
Top Customer Reviews
The first part is familiar material about how the Internet is changing business. It goes on to focus on the IT department of a traditional company as the weak link in responding to Internet opportunities and challenges.
The second part repeats Moore's shareholder value perspectives from The Gorilla Game (a book I liked much better than this one). Basically, he feels that management and the board should look at the level and direction of stock price as a litmus test on the company's strategy and implementation.
Part three hits the high points of relating well in the middle of creating a competitive advantage while technology is changing.
Part four discusses how top performance changes at times during a technological wave. This is probably the most interesting part of the book. It is quite well done.
Part five examines the key concept of focusing on what creates competitive advantage internally, and getting rid of everything else by outsourcing and partnering. I thought this was a little too simple. In many cases, your internal perspective may be the worst place to try to do key activities. For example, Wal-Mart reportedly began to do better with Internet development after it did more outsourcing in this core area. This section was really addressing The Innovator's Dilemma material and concepts.
Finally, how do you institutionalize the way your company will attack the Internet and future technologies?Read more ›
In Living on the Fault Line, Geoffrey Moore presents an interesting premise: that because of the Internet, traditional businesses must play by a new set of rules, rules that are based on the technology adoption lifecycle that he originally presented in his first book, Crossing the Chasm.
He aruges quite successfully that these these companies need to understand new market dynamics and shareholder value, which is based on competitive advantage over time discounted for risk, versus the quarterly report, which he argues gives a limited view of a company's performance.
He also argues that the market valuations for some of these Internet companies are rational, and that shareholder value is the true metric of a company's performance. This section is particularly brillliant because it is understandable to people like me... my eyes usually glaze over with this stuff. Geoffrey makes it exciting, and understandable.
And then he gets into the issues that prevent large established companies from dealing with new compeitition moving at Internet speed. And just like Crossing the Chasm, the author also offers strategies that companies need to consider to regain their competitive advantage and in effect, re-cross the chasm, which for many, had been done the first time many years and even decades or so ago.Read more ›
Geoffery Moore is the clearest and most insightful thinker in the dynamics of technology markets. His application of the technology adoption life cycle and the concept of crossing the chasm is now the cornerstone of most technology marketing strategy.
In 'Living on the Faultline' Moore is applying his models and his thinking to more traditional business. He comes very close to succeeding. His review of the impact if the Internet, the role of IT, the importance of shareholder value, the thinking required to develop sustained competitve advantage and managing culture are all well done. His grasp of the Innovators Dilema is also very good.
I think that problem is that it is too soon to know. Using digital and network technology to creating innovative business model outside the technology business is new. The evidence for what works and what does not work is still uncertain.
Moore is a keen obsverer of structural dynamics. His models took the black magic out of technology strategy development. I hope that in his next book Moore has developed a new model to help managers understanding what is happening in their competitive environment.
In the mean time, 'Living on the Fault Line' serves as a good overview of the most important thinking in these areas.
Moore is arguing that the Internet has, as a few commentators have already noticed, changed the face of business. Much of what he says is not new at this point--you don't need Moore to tell you that outsourcing is critical, and that the first-mover advantage is so important that many companies are sacrificing earnings for growth.
What is new, and what will be controversial, is Moore's discussion of stock price as a real-value indicator. He argues that because the stock price and trend is a real-time survey of the investing community, it is a useful guide to how well a company is doing. There is of course some truth in this (when the stock of a high-flyer tanks, it's a bad sign), but I and many others will no doubt question whether a high P/E means that the company is doing well, or whether its investor relations are simply outpacing the rate at which the market comes to understand these companies.
All in all, well worth reading, as it has much more real substance than many e-business books that are being published these days.
Most Recent Customer Reviews
This was written in the dot com boom era of 2000, and consequently espouses some theories that were ultimately disproven. Read morePublished on January 10, 2009 by Eric Kassan
The author himself clues us in to the value of this work in his own preface. At the top of page xiv his comments about his previous work include a telling sentence, "In sum,... Read morePublished on April 26, 2003
A good book, while not as important as Gorilla game and Crossing the Chasm.
The significance of it is, i think, on page 96, where the author states the several levels of... Read more
Geoffrey's Moore's latest book should be required reading for all executives in the age of the Internet. Read morePublished on August 26, 2001 by Max More
Living on teh Fault Line will mainly be of value to those who are new to working in technology-based businesses. Read morePublished on February 10, 2001 by Donald Mitchell
Geoffrey Moore is the master at taking complex marketing questions and answering them with simple frameworks. Read morePublished on January 31, 2001 by Ray Salemi
Unlike others (such as Allan Kennedy in THE END OF SHAREHOLDER VALUE) Moore suggests that stocks that may be perceived to be overvalued based on normal measures (see Graham and... Read morePublished on December 29, 2000 by Jeffrey L. Seglin
Those who have read Crossing the Chasm and/or Inside the Tornado already know that Moore is among the brightest, most eloquent of contemporary business thinkers. Read morePublished on August 17, 2000 by Robert Morris
Lots of duplication from Geoffrey Moore's earlier efforts. But, if you are looking for an introduction that brings together his concepts of crossing the chasm with new products... Read morePublished on August 7, 2000 by Robert Stackowiak