The Only Sustainable Edge: Why Business Strategy Depends On Productive Friction And Dynamic Specialization Review

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The Only Sustainable Edge: Why Business Strategy Depends On Productive Friction And Dynamic Specialization ReviewIf you feel that you miss (...), Enron and the other excesses of the the late 90's, please buy this book. Otherwise, don't.
Hagel and Brown are two well pedigreed authors, and they attempt to explain their view on what is the next frontier in corporate strategy. The answer is that value of the firm lies not inside the firm but at its edge. The edge is a broad metaphor for geography (India, China and Brazil), maturity (old econ and new economy), physical edge (inside the firm as well the partners outside).
The key insights from this book are
-Two types of forces have converged to squeeze margins -Informational technology, and Public policy shifts. Try telling this to the 500,000 people who have lost their jobs in the valley.
-Three key elements of the new model for business strategy are
-A. Reconveive sources of strategic advantages by accelerated capability building across boundaries. This implies - Dynamic specialization, Connection and Coordination of 3rd parties and Leveraged capability building. Elaborated using the Li & Fung, Hong Kong retailer example.
-B. Master new mechanisms to build advantages - This implies focusing on efficiency as well as effectiveness, process outsourcing and offshoring, loose coupling of extended business processes and production friction
-C. Adopt new approaches for developing strategy
-Given this framework, conduct a diagnostic that inventories the key initiatives for the last 12 months, as well as the proposed initiatives for the next 5 years. At the end of this diagnostic, you should be able to identify what activities you can offshore and outsource and therefore you can dynamically specialize.
-Process networks is predicated on loose coupling of processes and Productive friction. Productive friction can be decomposed into four factors, Performance Metrics, People, Prototypes, and Pattern Recognition.
-Process networks are enabled by performance fabrics and IT is critical in achieving a solid performance fabric. Web services is critical in implementing this new fabric.
Hagel and Brown have transformed a solid Harvard Business Review paper into a 200 page book that does not do sufficient justice to the expended ink. The approach is geared towards policy wonks at think-tanks rather than day-to-day business manager trying to compete in a flattening world. The authors do not provide prescriptive advise that can be implemented easily. Their case examples are shallow and do not reflect the points well. I would have preferred if the authors take their core argument and apply it to a business unit within a Fortune 500 organization and experiment with their strategy before writing this book.
To the busy executive, one less book that is cluttering our target reading lists.
Your searching for practical strategic ideas,
Fred "Grounding" Sanford
The Only Sustainable Edge: Why Business Strategy Depends On Productive Friction And Dynamic Specialization Overview

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