Customer Reviews

Living on the Fault Line : Managing for Shareholder Value in the Age of the Internet

5 star:		(6)
4 star:		(8)
3 star:		(2)
2 star:		(0)
1 star:		(2)

 

 

This book combines the perspectives of many different books into one. As a result, the book operates at about 100,000 feet above sea level. Although the view is breathtaking, you can't see most of the details. For managers and executives, that means being left with concepts that they may have trouble implementing.

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? This is routine material from a variety of books, and you can skip it if you are well read in business.

If you like your business books highly condensed and simplified, you'll rate this book a 5 star. If you like more detail, you'll rate it lower. If you have to have lots of detail, skip this book. It is resistible for you.

The Internet is having a profound impact on the ways companies conduct their business. Nowhere is this change more profound than with traditional companies who have been successful many years, now faced by threat of a new Internet business in their market. Start ups with incredible market caps have completely turned markets upside down, often rendering the old ways of doing business obsolete, almost overnight.

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.

I believe that any person in business, whether they are in the Fortune 500 of today, or tomorrow, needs to read this book as Moore provides a language and framework that we all need to understand in order to be successful in the 'new economy.'

I am a little disappointed. This is a good book. I wanted it to be an important book. It is not.

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.

Geoffrey Moore is one of the most interesting writers on management active today, and his work is usually more interesting to read than most of what's published. This book is no exception.

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.

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 / services, reaching the bowling alley (capturing niches) and the tornado (widespread acceptance), this book describes the concepts quickly and well.

Obviously, Geoffrey works with a variety of high tech firms and was careful not to be too negative about any of them... too bad. He could have more effectively driven home his points with more examples of how companies are unable to make transitions necessary in the face of change. In fact, he seemingly goes out of his way at the end to show how company cultures built around cultivation, competence, collaboration, and control can evolve and how these cultures might co-exist... I find this pretty hard to believe having worked at the extremes of his cultural models.

I fear that some executives who read this will leverage it to provide needed lip service to Wall Street to raise stock value without changing anything. Wall Street doesn't sort this out in the short term in many cases... Geoffrey gives too much credit to the market. However, if companies could be as flexible to change as he advocates, long term shareholders probably would receive much more value for their holdings.

By the way, a hidden value in this book is that it may help you decide what kind of company you are most likely to enjoy working for and some key indicators you should look for.

Living on teh Fault Line will mainly be of value to those who are new to working in technology-based businesses.

This book combines the perspectives of many different books into one. As a result of spanning so much material, the book operates at about 100,000 feet above sea level. Although the view is breathtaking, you can't see most of the details. For managers and executives, that means being left with concepts that they may have trouble implementing. The way to overcome that weakness is to go on to read other books that do address these issues in more detail like Built to Last and The Innovator's Dilemma.

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. Keep in mind though that apparently Wal-Mart is still struggling with the Internet. 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? This is routine material from a variety of books, and you can skip it if you are well read in business.

If you like your business books highly condensed and simplified, you'll rate this book a 5 star. If you like more detail, you'll rate it lower. If you have to have lots of detail, skip this book. It is resistible for you.

After you read this book, I suggest you think about when you may communicate at too high a level of generalization. People need it simple. See the excellent book, Simplicity, more more ideas!

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. In the Introduction to this book, he explains that it is "about managing for shareholder value, a discipline that has been widely endorsed but rather poorly described. Specifically, it is intended to answer one question that is haunting numerous management teams at the turn of the century: [italics] What should a company that rose to prominence prior to the Internet know and do about its stock price now that the Internet is upon us?" There are related questions:

1. What are the fundamental changes that collectively represent the transitions to the new economy?

2. If a stock price directly equates to sustainable competitive advantage, what must a management team do to convert that stock price into an appropriate management information system?

3. What are the most effective strategies for recognizing, catching, and then riding the next technology "wave"?

4. What are the most effective strategies for coping with the "destabilizing effects" on markets caused by shifts in underlying technologies?

5. As markets evolve through a series of four distinct stages which comprise the "the technology adoption life cycle", how and where (and especially WHY) can a new technology cause so many corporations to fail?

6. Which cultural models should be considered if the objective is to sustain "long-term vibrant success"?

With uncommon skill, Moore addresses these and other key questions. Although it may seem that this book was written only for decision-makers in large, publicly traded companies, I now suggest that almost all of the information and suggestions provided are also relevant to privately held companies as well as to non-profits. Moore's ultimate objective is to explain HOW to maximize value of any organization in the Age of the Internet. He suggests that an organization conduct a series of workshops for its senior managers, each workshop based on one of the chapters in this book. That is an excellent suggestion. The material could also be the substance of an off-site "retreat", with its Table of Contents serving as the agenda.

Those who share my high regard for this book are strongly encouraged to read Ehrbar's EVA, Christensen's The Innovator's Dilemma, and Collins & Porras' Built to Last.

Geoffrey Moore's other books (Crossing the Chasm, Gorilla Game) are significantly better than this work. The book is largely a rehash of the earlier works - a fact that is touted in a Fast Company article on Moore.

Well, the book could be a good synopsis of his other work, bringing newcommers up to speed fast. It isn't. Large blocks of text from his earlier work seem to be copied into this one (sorry to be harsh)with limited positioning or arguement. The book does not flow.

Moore's earlier books are terriffic, and explain how things work. People wanting to understand this body of work would be better off buying and reading the other books rather than going through this one. Even through that takes more time and costs more money.

His inclusion of the value disciplines at the end of the work appears more like a bolt-on that adds little value.

In short, skip this one -- no new ground broken here. Read the other books Crossing the Chasm and then Gorilla Game. This will give you a better understanding of the ideas and implications.

Fault line unfortunately does not deliver.

After Geoffrey Moore's Inside the Tornado, one never expected another such gem in such a short time period. It seems like Geoffrey Moore's Consulting experiences and insights related to the Internet economy are once again packaged 'wonderfully well' to deliver great value to all kinds of readers in the hi-tech world - product/service, marketing/strategy, ...

Geoffrey's insights on how the Internet impacts the competitive landscape and changes the way one perceives value and value-creation are a definite "look into the future". How to integrate strategy and marketing with Information Technology to overcome potential chasms and tornadoes is depicted in the usual Moore style - plain and simple but crisp and captivating!

This was written in the dot com boom era of 2000, and consequently espouses some theories that were ultimately disproven. That said, this book does make one think, and proposes some innovative ways of looking at shareholder value and corporate culture. This book has five major themes-

1. Separate core versus context, and outsource context. In short the author encourages outsourcing anything that does not have the potential to significantly improve stock price. He also calls these areas "hygiene" as they have the ability to hurt one through neglect, but will not add significant value. Unfortunately he completely overlooks the costs associated with managing outsourced providers. Since, if done wrong, these functions can significantly hurt your business, there must be quality control, and leaving that to the vendor would be allowing the fox to guard the hen house.

2. Understand the source of market value is, in essence, the product of competitive advantage gap (the advantage between your products and competitors') and competitive advantage period (how long the gap will last). While these are obviously qualitative measures, they do present a compelling way of analyzing what will affect market value, and by how much.

3. For factors determining competitive advantage, five layers are proposed. From most fundamental to lease significant are technology, value chain domination, market segment leadership, execution/value disciplines, and differentiated products.

4. The Technology Adoption Life Cycle (TALC) is summarized and applied, but it is best introduced in "Crossing the Chasm" or "Inside the Tornado" - earlier books by the same author.

5. There are four fundamental cultures (Competence, Control, Collaboration, and Cultivation). While individual functional areas tend toward certain ones, the entire company must ultimately identify with the same culture for maximum effectiveness.

The book is well written, but it lacks the coherence and focus of the author's earlier books. And having certain theories disproven by time (valuation of visionary companies and value of outsourcing to name the most prominent) doesn't help.