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The Only Sustainable Edge: Why Business Strategy Depends On Productive Friction And Dynamic Specialization Hardcover – May 2, 2005
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"...check out [this] smart new book by the strategists John Hagel III and John Seely Brown." -- Thomas Friedman, The New York Times, April 29th, 2005
From the Inside Flap
"Hagel and Browns vision of new innovation processes is compellingand quite frightening. These disruptive forces will create exciting growth opportunities for the firms that harness them and will ruin those that ignore them."
Clayton M. Christensen, Robert and Jane Cizik Professor of Business Administration, Harvard Business School and author, The Innovators Dilemma and The Innovators Solution
"As a practitioner working with global supply chains, I find this book captures the essence of our efforts to orchestrate loosely coupled networks on a global basis. This book is a must-read for all executives seeking to improve the performance of their global supply chain."
Victor Fung, Group Chairman, Li & Fung
"Intensifying competition in global markets calls for an effective business strategy. This book introduces fascinating views on how to renew strategic thinking with valuable insights on how to spur innovation and talent development."
Pekka Ala-Pietilä, President, Nokia Corporation
"The two great theorists of information technology, John Hagel and John Seely Brown, show the importance of talent development, specialization, connectivity, and coordination. This indispensable book is an absolutely fascinating guide for business leaders."
Walter Isaacson, President, the Aspen Institute and author, Benjamin Franklin: An American Life
"The authors brilliantly challenge conventional thinking with a penetrating analysis of the forces shaping the current business environment. This book is both intellectually powerful and downright practical, with straightforward questions and guidelines for business success in the global economy. It will force more than a few executives to rethink their strategies."
Robert D. Hormats, Vice Chairman, Goldman Sachs International
"In a rapidly evolving global capitalist system, this book is the shortest path to survival and success it is a bible for the new connected age. It is an absorbing narrative, an acute assessment of the environment, and a must-read for everyone."
Vinod Khosla, General Partner, Kleiner Perkins Caufield & Byers
"The authors document the impact of globalization and provide a roadmap for competitive success through continual cultivation of distinctive capabilities. Their compelling message is relevant for those developing strategies for institutional survival in the private and the public sectors."
William H. Janeway, Vice Chairman, Warburg Pincus LLC
"Hagel and Brown brilliantly articulate the stages of evolution for organizations and construct a framework for creating sustainable value through accelerated capability building. This book offers a valuable guide for organizations seeking answers for operating effectively in a borderless world."
K. V. Kamath, Managing Director and CEO, ICICI Bank
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Top Customer Reviews
It's one of the few organizations that can operate with little to no concern for the bottom line. I mean, it's not like the military is going to go bankrupt or be subject to a hostile takeover. However, as one who has owned my owned business in the civilian sector and now works in the Federal sector, I can say that what works in business will work for the military. The principles of business are true regardless of the application. The idea of collaboration and cooperation can apply to any situation and in any organization that wants to survive...and not just survive, but thrive in the 21st century.
Of special interest to me was the concepts that the authors put forth on the importance of building relationships with other organizations that share a similar goal and working to change the paradigm of competition to cooperation, for the mutual benefit of all.
I am recommending this book to my supervisors, who are beginning to realize that in order to thrive in the current economy, we must think and act like a business.
Several years have not made the book less relevant, but more.
Yes, it reads a little intellectually...what do you expect from Harvard, right? But don't miss the the keen insights offered in this work because you stumble over some of the prose. Like I tell my kids, "Think, there's very little competition!" This is a book worth reading if you want to understand the dynamics of today's constantly-changing business culture.
If ideas are the new currency, as it is often said, then relationships are the new assets. How rich are you?
The authors also demonstrate unusual depth. On the surface, "The Only Sustainable Edge" is your passport to a globalized world: the authors take you to China, India and other locales normally seen as far-off places to which we off-shore and/or out-source (the authors nicely distinguish between those two practices) and show us, instead, the specific conditions and cultural traits in those countries that create innovative practices we could learn from. But what gives this book such deep resonance is its underlying vision of a globalized world and the shift in theory and practice its operating principles demand. Because the tropes the authors use are brilliantly complex - they encode so much information - you can't help but grasp the implications. Take just these three examples:
"DYNAMIC SPECIALIZATION": The pre-globalized world world was divided into what Isaiah Berlin called "hedgehogs" - generalists, who know a little about a lot of things; and "foxes" - specialists, who know a lot about one thing. In a globalized world, the specialist is neither fox nor hedgehog: the specialist must know a lot about one thing...and how it works in many, many different contexts. To (I can't believe I'm using this word) grok the specialist as a boundary-crosser, moving laterally across a broad spectrum, is also to understand the shift from a vertical to a horizontal focus (what Thomas Friedman calls "flattening"). Likewise, the transcendence of the fox/hedgehog paradigm suggests that oppositional constructs themselves may be passé. Indeed, throughout the book, the authors look to maintain the tension between opposites rather than resolve the tension either one way or the other. (Thus, unlike the early enthusiasts of chaos theory, who replaced "things" with "flow", Hagel and JSB have a healthy respect for both.)
2) "PERFORMANCE FABRIC": Pre-globalization, growth was measured size and/or efficiency. In a globalized world, growth is measured by complexity. You grow by deepening and broadening your connections, forming new partnerships, entering into new collaborations, growing one's skills across many more contexts. That tapestry of connections is what Hagel and JSB call "a performance fabric". I'd be tempted to say that the richer the tapestry, the richer the company and its shareholders, but now I'm thinking "tapestry" doesn't do justice to the elasticity of the performance fabric. Perhaps "trampoline" would be better - it gives you that added bounce you need to vault into a higher stratosphere, a higher level of complexity. (Perhaps it could be said that in a globalized world, companies have to grow up.)
3) "PRODUCTIVE FRICTION": Pre-globalization, boundaries were thought to be hard and fast, built like moats around a castle to protect one's enterprise against competitors, predators (or pirates) and/or regulatory bodies. In a globalized world, boundaries are points of connections as well as separation. Companies and individuals have to collaborate with competitors. Those working in and with countries that have different ideas of property and the boundaries we create to protect property, need to negotiate boundaries rather than impose them. Rubbing up against each other in this way creates friction, but, as anyone who's ever watched "Survivor" knows, rubbing two sticks together produces fire. Likewise, productive friction sparks new ideas and new solutions.
In fact, I had my own experience of productive friction reading this book. While I sometimes found the going difficult, rubbing up against the unfamiliar business syntax and vocabulary produced a fireworks of thoughts and images. That mine had less to do with the business models Hagel and JSB are proposing than with the social model I was extrapolating from it was inevitable because, as the authors themselves suggest, much of the information in this book translates immediately to the social arena. How could it not, given that the underlying principles are the same? If the abilities to be sensitive to your surroundings, to respond quickly to change, to be able to negotiate tension rather than to try to resolve it either one way or the other are crucial to the success of companies and workers in a globalized world, how could they not be useful for its citizens as well?
That said, this is a business book. Hagel and JSB focus on the business model and leave the social model to the reader's imagination. They provide companies with criteria by which they can analyze their strengths and weaknesses and offer a host of best practices - both of American companies and those of other countries - to help companies compete and grow in a globalized world. Neophyte that I am, I can only presume the value of these precepts to business. But as a shareholder in some of those companies, I'm prepared to hold them accountable to the standards set forth in this book.
The general gist of the book is that in an enviornment of intense global competition that the only sustainable competitive advantage is the ability to change.
On a chapter by chapter basis, the first chapter "Beyond Margin Squeeze" sets the forces that are creating this new environment where traditional notions of competition such as product, brand and geography are giving way. Its a good summarization of the environment facing most companies.
The second chapter on outsourcing tries to expand the outsourcing view from one of cost (labor arbitration) to skill acquisition. The authors try, but this chapter is not really convicing enough to change the view and conventional wisdom on outsourcing.
The third chapter is perhaps the best in shaping what it really means to be a dynamic company. You can use the word agile, but the gist is that you need to look at the company differently if it is going to compete by being able to change and fit with the market.
The remaing chapters keep this book from being a 5 as they rehash some of the authors prior ideas and thoughts.
So, the first part of this book is great for those who want to put some shape and substance onto the evolving consumer, global world and what it means to the enterprise remaining successful.
If you are facing the need to point out the need for a signfiicant change in the way you structure, run and organize your business, then the first part of this book is the best set of new ideas to hit the market in a long time.