Customer Reviews

The Momentum Effect: How to Ignite Exceptional Growth

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As good as (maybe even better than) Blue Ocean Strategy


It is worth reading this book and Kim and Mauborgne's Blue Ocean Strategy together (the authors of both books all teach at the same school and Kim and Mauborgne have endorsed The Momentum Effect, calling it a "must read"). Personally I think The Momentum Effect is even better than BOS.

The strategy canvas in BOS is a fantastic tool and I've used it a lot but I've always had three nagging questions about the blue ocean book. First, blue oceans sound great, but if I'm stuck in a red ocean is it really true that my only hope is to find a big innovation to sail into a blue ocean? Second, if you do manage it, how do you stop your blue ocean turning red. Third, what are the fundamental mechanics and processes that underlie the creation of uncontested market space. These are three things that Larreche's book is brilliant on.

First, he points out that even in red oceans (I don't think he uses that term - he talks about "old established firms" in highly competitive markets) it is possible to generate growth through a series of small cumulative improvements rather than trying all out for a "big bang". He has an amazing graph on page 214 showing cumulative impact of a series of 1% improvements in key performance criteria. As an aside, this graph is an example of one of the differences in this book - Larreche's background was in developing marketing simulation software (eg Markstrat which I used doing my MBA) - the simulations are used sparingly but they add depth.

Second, he explicitly states that he is not offering a once through process - if you want to stay on top you have to keep working, keep improving. Lots of books "say" this but few really take it to its logical conclusion, preferring to offer a cosy "destination point" as if beating your targets this year gives you an out for not doing it next year. In the real world reaching one goal is just the jumping off point for trying to hit the next one. Larreche's process shows how constant iteration can be built into your business and how it becomes a source of strength - "momentum" comes from the feedback effect of taking each small success and building on it to make an even bigger one and so on.

But for me the real strength of the book is in the way it answers my third point. In Part II, it devotes about 80 pages to the process of designing what he calls "power offers". Part III has the same sort of space devoted to the practicalities of actually executing the strategy. This is one of the first strategy books I've read that manages to balance the grand design with the practical implementation.

In short, if you liked Blue Ocean Strategy, you'll love this - if you've always had doubts about BOS - this book might answer them.

This is one of the most powerful and exciting books I've read in years. I've been following Larreche's work for about ten years now, since I came across some reports he did for the FT. A few years ago I also got a chance to see him speak. The guy is great and I've been waiting for this book ever since - especially as, unlike some other management guru/professors/authors he also has experience of the real world (he was on the board of a FTSE 100 company for a long time).

It doesn't disappoint.

The process he sets out is simple but it is also very powerful - and it also makes sense. He starts by challenging the assumption that increasing marketing spend is the best way to deliver growth. He argues that this is often just a way of buying growth that your products aren't good enough to earn. Instead, he says, you should develop a genuinely deep understanding of your customers that goes beyond the usual surveys and segmentation studies and gets under their skin - then use that understanding to create better products then be ambitious enough about the way you deliver the product and make sure that your customers' experience is so good they start to become engaged - this engagement will help you learn more about your customers and so the whole thing kicks off again.

It might sound simple but in practice it's not easy. However, the tools that are all through the book are a great help in putting this into practice - just one (the customer value wedge) is worth the price alone - I've already used it three times today already with members of my team.

That's just one example. Most strategy books combine a bit of research and with good stories. What really makes this book stand out is a grounded realization that the real world is a messy place where things don't always go right first time. It's brilliant.

When I first leafed through this book, I thought it was a novel. How else could one interpret the fact that tables, figures and diagrams are just a small part of only the 10% of its total pages! Authors of scientific, marketing and management books have not used us to such a minimalism. J.C. talks substance, not visuals. Even for this reason, this book is exceptionally impressive. This "nothing less than exceptional growth" book smells strong, innovative thinking. It's a book on business total philosophy rather than a simply marketing or management text. It provides a sharp anatomy of things, supposedly known in a business enterprise, with the result that bold substance is revealed. Doing things right is not enough for Larreche. One has to do things exceptionally right. "Very satisfied customers" is not enough. Delighted customers should be the basic purpose of any business. Superb, total value to customers is running throughout the book. More revenues for less relative marketing expenditures is to look for. Anything else does not provide proof of the existence of momentum in a business firm. Larreche, a recognized expert of marketing, emphasizes its customer value building wisdom, rather than its routine functional elements commented about and stressed in all common marketing texts. This book, as product, provides the customer with real super value. It has been some time since I read a real best seller to be!

A lot of companies and agencies are pushing buzz words such as Customer Centric approach or Marketing 360°. The book from Jean-Claude Larreche is a great balance between strategy perspective and operational implications. It demonstrates that the success in creating value and momentum for growth is at the end of the day a cultural shift within companies. It offers a thinking platform and practical examples which are very useful to convince and address your customers and targets (internally and externally).

I strongly recommend this book for:
- Marketers who are looking for a holistic approach to review their customer focus strategy
- Consultants and agencies for reviewing their recommendations in light of what is driving success at the end of the day

I do not recommend this book for people who think that:
- They have the best product and brand in the world which is good enough to be sold by itself
- Decision makers for whom quarterly results is the main horizon for their strategy

If you've ever had the feeling that when your boss says "our customers come first" what he really means is "our customers come first as long as serving them properly doesn't impact on profits, in which case, `give me the money'". This is the book you need.

He shows that once you've made your business efficient, the only way to grow is by creating offerings that generate profitable revenue - obvious I know but apparently not given some of the meetings I've sat through. More importantly, he shows the only way to do that is by really understating your customers - what makes them tick. Again, obvious but he points out that while most firms believe they understand their customers, very few really do.

I've always found the question "how much time have you spent with customers in the last month?" to be a real killer. Ask that question of anyone in your firm who isn't in sales and then ask yourself how come we think we know what our customers want if we don't even spend time with them?

This isn't just a book about customer focus, but it is about how to ensure that the customer becomes the central guiding light for every aspect of your business and why that matters. There is plenty of stuff in here for you to use to convince skeptics about how much profit growth you are missing out on by not harnessing the momentum that customer focus can deliver.

If you've always wanted to know what made a book on a 13 year old's adventures become Harry Potter's 325 million selling success and like me you had the feeling there was more to it than just a good story but couldn't really tell what.

If you've always asked yourself how Apple managed to recover from its mid 1990's difficult years and become the worldwide record iPod and iPhone selling company it is today and thought there was more to it than just brilliant product development and smart advertising but still haven't quite worked out what.

If like me you've asked yourself how Virgin Airlines managed to make the difference in the highly competitive airline business challenging the greatest and had the feeling it wasn't just about the good marketing.

Well, if like me you want to find out how they did it and want to understand today's strategic challenges in business, reading Jean-Claude Larreche's The Momentum Effect will be the enlightening, eye opening, thrilling experience it has just been to me.

I just finished the book and having been involved with strategic marketing and business development for over 20 years, better than Kotler's Marketing Management and Porter's Competitive Advantage, Larreche's Momentum Effect will provide you today with the most enlightening research conducted on some outstanding business successes (Skype, WalMart, Ikea, etc) and will take you with a practical toolbox on a clear and simple roadmap to reach unbeatable growth and truely make the difference whatever your industry or business field may be.

Whilst reading JCL's The Momentum Effect, I was taking notes of all the changes and initiatives I could use (ex: growing vibrant customer retention and building a power offer). Implementation is starting now.

When I told my first boss I was leaving to do an MBA he told me I was wasting my time and that if you hear a new idea in business it is probably wrong. I'm not sure if I agree with him but his point was that business is simple, we should know what we're supposed to do, its just very hard to do it right.

I think the author of this book would agree with him (although, given that he's a professor at INSEAD, probably not the bit about an MBA being a waste of time). Most of the individual ideas in this book are not new but I've never seen them presented with as much power or in a way that shows how they all connect together.

For example the link between satisfaction and retention is obvious and has been made many times before. What I haven't seen before is the way he argues that because satisfaction is a state of mind rather than an action, and action is driven by emotion, therefore it is the intensity of a customer's satisfaction (ie shifting it from a rational, cognitive state of mind to a passionate and emotional state of mind) really matters. Strong emotions drive powerful actions. Average, four out of five, satisfaction isn't enough to create really powerful emotions so it won't produce noticeable improvements in retention or engagement. 5 out of 5, however, is a different story.

Something else that's new and powerful is the way that he shows how these things are all connected in a sort of feedback loop. Intense levels of satisfaction (he used the word "vibrant") create intense levels of retention and engagement, both of which have measurable business benefits themselves, but more importantly, the intense levels of customer engagement can provide feedback that help firms improve their offering yet further, increasing satisfaction levels even more and creating a virtuous circle of ever increasing success.

I've read plenty of books that take old ideas and rehash them in a blindingly obvious way - this book takes old ideas, adds some depth to them, makes connections between them and creates something that is greater than the sum of its parts.

Here's a challenge for you to consider. Airline mergers don't work because the more market share a carrier captures the more downward price pressure hurts its bottom line. My book Competing for Customers and Capital is perhaps the only one that shows how to pinpoint this crippling financial dilemma in airlines.

If mergers don't work, what's an airline CEO to do? While my book points to the problem, it doesn't offer a solution. For a road map on how to find a way out of this dilemma I recommend they read J.C. Larreche's book The Momentum Effect: How to Ignite Exceptional Growth. Here's what Sir Richard Branson, who knows a thing or two about the airline business, says on the cover:

"This book shows you how to build momentum and leave your competitors trailing in your wake."

What might airline CEOs learn from it? One example of the insight that jumped from the pages of this book when I read it is the subject of my review.

The relationship most air carriers have with passengers never develops beyond their onboard experiences, online booking and ticket purchases. As JC says on page 154:

"There is no emotional connection. To generate the momentum effect requires a much deeper and more committed relationship than that offered by passive customers who just don't complain. Companies should measure their success by the number of delighted customers they have--people so thrilled with a product or service that they can't help but tell others about it."

Would offering a non-stop flight in place of a connecting one create vibrant satisfaction? Not really. While non-stop flights are very desirable, we've all learned to live without them. Finding a non-stop flight is great, but it does not create vibrant satisfaction. A non-stop flight is not something for which you would say: I can't-imagine anything more satisfying in airline travel. What sort of air travel service might lead you to express vibrant satisfaction?

We often hear the idea that "less is more." But that concept always is expressed in terms of money. The following sentence on page 27 of JC's book explains when less is more from the airline passenger's point of view:

"... less should mean that they get exactly what they need and nothing more, with no superfluous elements that create complexity and could destroy value."

Reading this sentence started me thinking: In my experience are there any airline services that create complexity and destroy value? Yes!

We pack our clothes in a suitcase, carry it to the airport, check it and know the TSA is likely inspect it. Maybe open it and search through our stuff to find out if what the scanner shows is a "digital camera" really is one. The inspectors "repack" our bag with a little printed notice that they were there. At out destination we wait patiently by the carrousel in the hope that this time our baggage will arrive, then roll it to a taxi or shuttle, take it to a hotel or other venue, unpack and lay out clothes for the next day. Then we replay this curse of checked baggage by returning the clothing to our suitcase. We carry it to the airport check-in, hoping to retrieve it from baggage handling at the end of the flight and take it home.

This is an endless, superfluous cycle of baggage handling, re-handling, and re-re-handling. A cycle of unnecessary complexity that often destroys what ever value might be created by an on-time arrival. Next to running the gauntlet of check-in lanes, checked baggage is biggest hassle we encounter in flying. Why do airline passengers need to check their baggage? If you think about it we don't need "baggage handling" as we know it. What we actually need is to have our baggage waiting for us when we arrive at our destination!

So I'm thinking how could an airline provide a service that does not require I check my bags at all? A light bulb flashes in my mind: why doesn't an airline partner with FedEx or UPS to pick up my baggage from home the day of my departure and deliver it to my destination timed with my flight arrival? No baggage to carry to the airport and check-in. No TSA inspection. No waiting at the baggage carrousel to pick it up and schlep it to the hotel. Then, just before the return flight, the express service picks up my baggage at the hotel and returns it to my home timed with my arrival. With this option my baggage never goes thorough the passenger air transportation system!

Here's the punch line. After JC's book led me to this idea I began searching the Internet to see if anyone had thought of it before. And I discovered that the folks at LuggageForward.com have been in the business of doing this for several years. So, why doesn't one of our legacy carriers cut a deal with Luggage Forward to bundle its service into their online reservation system? This 'power offer' would not only create more satisfied passengers, it also would create value-added revenue for the carrier while reducing the cost of mishandled baggage! If you want to learn more about this 'power offer' in air travel see my blog at http://customersandcapital.com.

The only thing I know about air travel is from 50 years as a passenger. But with that knowledge and JC's book I was able in a matter of minutes to design an offer that's so powerful it's already being delivered (on a small scale) to airline passengers. No "market research." No "focus groups." Just a personal knowledge of the air travelers' baggage handling problem and The Momentum Effect: How to Ignite Exceptional Growth. If I can do it, anyone can design a 'power offer.'

With so much being written about 'delighting customers', the 'customer experience', 'customer satisfaction' and the like it is great to read a book that really goes beyond the ordinary, to really dig into how organisations can really leave their competitors behind.
And it's none of this; engage customers differently or deliver compelling offers, this book really takes it to the next level.....Compelling Value, Power Offers, Vibrant Satisfaction, Vibrant Engagement and Vibrant Retention.
Great descriptions that really help organisations understand the need to go beyond good to the heart of building momentum.
If you've read all the standard texts on the topic, I'm sure you'll find a stimulating, thought provoking journey beyond ordinary thinking.
Enjoy!

Eureka! Once in a while you come across a unique book that puts everything together for you. This book puts together the best of strategy, marketing, innovation, business development and so much more. No wonder Sir Richard Branson liked the book. The book closely emulates the genius of the man and how he grew Virgin. J.C, what a great book! I will use "The momentum effect" model for my management consulting projects. Jim Kayalar is a Certified Management Consultant(CMC) with the Institute of Management Consultants USA(IMC - USA) with 20 plus years of business experience in a myriad of industries.