| If you liked "Blue Ocean Strategy" and are not put | | | | In this section he also gives a clear framework for |
| off by a little bit more practical approach to assessing | | | | analyzing and developing innovative business models |
| the strategic map of your business, you will love | | | | that not only illustrate a clear path to profits, but also |
| "The Profit Zone" by Adrian J. Slywotzky and David J. | | | | show how you can assess the levels of "profit |
| Morrison. | | | | protecting power" embedded in the business model. |
| At over 330 pages (including appendices) this is "the | | | | Furthermore, he clearly illustrates a construct for the |
| business model innovation" book for busy executives, | | | | customer-centric business that can be applied to any |
| entrepreneurs, consultants and business students. | | | | company big or small. As you read, you find that this |
| Over the years, I have probably read at least one | | | | customer-centric thinking is foundational to building |
| hundred books in the areas of business and | | | | the kind of company that continually reinvents to |
| marketing strategy, this book is one of the most | | | | stay within the defined "profit zones". |
| practical for the issues it raises, the insights gleaned | | | | In "How Profit Happens", the book concludes part 1 |
| from its dramatic case studies, and the questions it | | | | with an overview of 11 (out of 22 listed) profit |
| forces you to ask about your organization. | | | | patterns. They are: |
| Background | | | | - Customer Solutions/ Customer Development Profit |
| Adrian Slywotzky who authors this book is a | | | | (GE case study) |
| management consultant (albeit a highly regarded one). | | | | - Product Pyramid Profit (Nicholas Hayek, SMH and |
| As such, this book is advertising for his services. But | | | | the Swatch Story) |
| what a great ad it is! | | | | - Multicomponent System (Coke Case Study) |
| For me, business books by the most brilliant | | | | - Switchboard Profit (Charles Schwab) |
| consultants generally rank just below books by | | | | - Time Profit (Intel under Andrew Grove) |
| successful "been there, done that" CEOs. However, | | | | - Blockbuster Profit (Disney et al) |
| the author has a background as the CEO of his own | | | | - Profit Multiplier Model (Disney) |
| companies and you can tell by the sensibilities of the | | | | - Entrepreneurial Profit (Thermo Electron case study) |
| book. | | | | - Specialization Profit (ABB business case study) |
| The Book | | | | - Installed Base Profit (Microsoft and others) |
| Even if the author was a complete nobody, this book | | | | - De Factor Standard Profit (Microsoft) |
| would be immensely valuable for the issues it raises | | | | While I wish the authors would have come up with |
| and the concepts it shares. The sophisticated | | | | catchier names for these business design |
| concepts in this book are delivered in a very | | | | frameworks, the concepts underlying them are |
| accessible manner that the busy executive will find | | | | sophisticated and sound. |
| very useful and practical. | | | | Part one of the book also includes a strong but |
| This is "Blue Ocean" thinking before "Blue Ocean | | | | concise treatment of the strategic control points to |
| Strategy" became a blockbuster hit. | | | | protect the sustainability of profits, as well as an |
| Part 1 | | | | analytical matrix for assessing the value of a business |
| The author's promise is nothing less than to "unlock | | | | design. |
| the secret of profitability" by creating essentially a | | | | Part Two |
| catalog of innovative business designs that have built | | | | Part two of the book highlights the reinventors |
| superior profits, and by illustrating the attributes of | | | | primarily responsible for the innovative business |
| the "reinventors" who were primarily responsible for | | | | designs their organizations used to create |
| those innovations. | | | | uncontested market spaces and thrive in |
| The first cornerstone principle I noticed is the | | | | hyper-competitive ones. They include well written |
| argument that "market share is dead" and no longer | | | | accounts of Jack Welsh, Nicholas Hayek, Andrew |
| sufficient as a path to eventual profitability for | | | | Grove, Bill Gates and a other powerfully innovative |
| business organizations. He rightly points out many | | | | figures. |
| instances of market share leaders who saw sudden | | | | Although I have come across many accounts of the |
| and massive erosions of capital and market value | | | | strategic and managerial exploits of some of these |
| over the last few decades. He points out the role of | | | | figures listed above, the "Profit Zone" puts their |
| increased customer power in the appearance of "No | | | | strategic choices in a whole new light. |
| profit" zones across many industries. | | | | Part Three |
| The authors are downright evangelical in their zeal for | | | | In another series of articles titled, "The Best Business |
| sustainable profitability as the key attribute | | | | Books and How to Eat Them" I talk about how |
| organizations should strive for. As a small business | | | | anyone can get the most value out of a business |
| consultant who occasionally stumbles upon a big | | | | book. One of the pieces of advice I share is on how |
| business client with other sensibilities, this focus on | | | | to convert the concepts into questions relevant to |
| profitability in business model design greatly resonates | | | | your own situation. |
| with me. | | | | |