Competing for the Future

"On the road to the future, who will be the windshield, and who will be the bug?" - Gary Hamel To be competitive in today's world, you must focus not only on the here and now, but also focus on creating the future because "Nothing is more liberating than becoming the author of one's on destiny." Hamel and Prahalad deeply understand the very core of competition, and provide the reader with an understanding of how to build a great company. Chapter 1: Getting Off the Treadmill In addition to paying attention to their position in the current market, companies must focus more on creating the future of the industry and their stake in it. Chapter 2: How Competition for the Future is Different Competition for the future is competition to maximize the share of future opportunities. Chapter 3: Learning to Forget Unless a company wishes to meet the fate of the dinosaurs, it must stop looking in the rear view mirror. Chapter 4: Competing for Industry Foresight Industry foresight allows companies to envision ways of meeting unarticulated needs. Foresight arises from wanting to make a difference in people's lives. Chapter 5: Crafting Strategic Architecture "Not only must the future be imagined ... it must be built." Strategic architecture is a set of plans on how to turn your dream into reality. Chapter 6: Strategy as Stretch "It is not cash that fuels the journey to the future, but the emotional and intellectual energy of every employee." Strategy must be built upon the juncture of where the firm is and where it wants to be. Chapter 7: Strategy as Leverage The real issue for many struggling managers is not a lack of resources, but too many priorities, too little stretch, and too little creative thinking about how to leverage resources. Chapter 8: Competing to Shape the Future Getting to the future first may empower a company to establish the rules by which other companies will have to compete. Chapter 9: Building Gateways to the Future Every top management team is competing not only to protect the firm's position within existing markets, but to position the firm to succeed in new markets. Chapter 10: Embedding the Core Competence Perspective All too often, opportunity that falls between the cracks of existing market and departmental definitions, gets overlooked. Chapter 11: Securing the Future What counts most is not hitting a bulls' eye the first time, but how quickly one can improve one's aim and get another arrow on the way to the target. Chapter 12: Thinking Differently "To ultimately 'be' different, a company must first 'think' differently." To share in the future, a company must learn as much about thinking differently as it does about what to do. Competing for the Future is a lively study in how to transform today's dreams into tomorrow's reality. Don't read this book at your own peril. Competing today, without regard to tomorrow's possibilities will certainly stack the odds in your competitor's favor. Michael Davis, President - Brenc

Few companies that began the 1980s as industry leaders ended the decade with their leadership in tact and undiminished. Many household name companies saw their success eroded or destroyed by tides of technological, demographic and regulatory change and order-of-magnitude productivity gains made by nontraditional competitors. "Do you really have a global strategy", the first HBR article by Hamel and Prahalad, developed the theme that small companies could prevail against larger, richer companies by inventing new ways of doing more with less. Differences in resource effectiveness could not be explained by efficiency, labor or capital, but by amazingly ambitious goals that stretched beyond typical strategic plans, raising the question how such incredible goals could get past the credibility test and be made tangible and real to employees? Frequently the small challengers rewrote the rules of engagement; flexibility and speed were built atop supplier-management advantage, built atop quality advantages. Companies made commitments to particular skill areas a decade in advance of specific end-product markets. How did executives select which capabilities to build for the future? Some managers were foresightful, others imagined and gave birth to entirely new products and services. These managers created new competitive space while laggard companies protected the past rather than creating the future. Existing theory throws little light on what it takes to fundamentally reshape an industry and the gap provoked this book in which the goal is to enlarge the concept of the industry and not just the organization. Being incrementally better is not enough because a company that cannot imagine the future won't be around to enjoy it. This book is about strategy and how to think by drawing on the experience of companies that have overcome resource disadvantages to build positions of global leadership. It is about companies that escaped the curse of success to rebuild industry leadership a second or third time. It has been written for companies that believe that the best way to win is to rewrite the rules; it is for those who are not afraid to challenge orthodoxy, for those who prefer to build rather than cut, for those committed to making a difference and staking out the future first.We need to ask ourselves eight questions:- does senior management have a clear and broadly shared understanding of how the industry may be different in ten years time? Is management's view of the future clearly reflected in short-term priorities?- How influential is my company in setting the new rules of competition within the industry? Is it regularly defining new ways of doing business and setting new standards of customer satisfaction?- Is senior management fully alert to the dangers posed by new, unconventional rivals? Are potential threats to the current business model widely understood? Do senior executives possess a keen sense of urgency about the need to reinvent the current bus

Hamel and Prahalad brought two ideas to the forefront of management in the 1990s: Creating a strategic intent that dominates corporate thinking, and then understanding the core competencies that the organization requires to get there. Rather than create numerous 5 year plans, communicate the direction and insure you have the skills to get there.The impact of this was felt across corporate Americas. As companies struggled in reacting to changing times, they would talk more of core competencies instead of certainy of the future. Well run companies could also articulate their vision and what they're good at. (Example GE: "We are #1 or #2 in every business we run. We get there by rigorous management and continuous improvement.") These ideas are here to stay. Is it all so simple? In Consulting Demons, Lewis Pinault takes issue with Prahalad and his consulting practice at Gemini. He asserts that the ideas can be misapplied to fuel a consulting boom, and that Prahalad's missionary zeal was better for generating consulting fees than for corporate bottom lines.Bottom line - the book is a good introduction to some important strategic concepts. Although it is no longer required reading at top consulting firms, it is still relevant and important. Just take the ideas (like all pop management ideas) with a grain of salt.

Competing for the Future, by Gary Hamel and C. K. Prahalad focuses on new issues and techniques of strategic planning as discovered, articulated, and reported by the authors, both Professors of Business at the University of Michigan. The main message of the book reads as follows: in order for a company to be a success, the company must create its future instead of following other companies into the future. By "creating the future" the authors understand defining and exploiting yet unknown future market opportunities. The opportunities do not have to be confined to the company's core competencies (although the book places significant emphasis on utilizing those). Instead, the company can choose to find alternate distribution channels, beneficial alliances, and other creative means of reinventing itself. The authors offer a wide array of management tools to successfully perform the corporate definition of future consumer needs.The authors emphasize the corporate need for continuous innovation and reinvention. According to the book, many once-successful companies have failed because of their lack of regeneration and their erroneous belief in persistence of yesterday's business practices. Among the ways to successful corporate regeneration, the authors credit corporate diversity on the thinking level as successful means for breaking established corporate "myths" of the right way of doing business. The authors note that hiring personnel from outside industries can bring fresh and vital perspective on the present state of an enterprise.In order to develop the future, a company must first define it. In defining the future today, Hamel and Prahalad suggest building "the best possible assumption base about the future." The "assumption base" is to indicate to management what changes in the company's products, competencies, and consumer interface are necessary in order to address future customer needs. The collective information about the changes of tomorrow comprises company's vision. In order to create a successful vision of the future, a company needs dedicated senior management that "can escape the orthodoxies of the corporation's current `concept of self'", and can enlarge the window of today's possibilities as projected into the future. The authors stress that a corporation should stretch the boundaries surrounding its competitive position of today in order to include tomorrow's competition and changes in customer needs. The book defines a successful corporate vision as the one that demands more of the corporation than the corporation is capable of providing today. Such a "stretch" between today's capacities and tomorrow's vision ensures that the company innovates in order to achieve the set goals, whereas "perfect fit [would guarantee corporate] atrophy and stagnation".The book underscores the importance of basing tomorrow's market vision on core competencies of the corporation rather than on acqui

I am a corporate strategy consultant who works mostly with FORTUNE 200 companies, and I also write books and articles about strategy. Strategic thinking has gone in and out of fashion in such companies several times in the last 40 years. With this book, Hamel and Prahalad have raised the value of strategic thinking in the current context in an effective way. This book is clearly designed with the large company in mind, where the need to envision, communicate about, and organize for the future is most difficult. By breaking down strategic thinking into the elements described here, the authors make strategic thinking easier for those who have little experience. Interestingly enough, many companies have "banned" strategic thinking in favor of more tactically-oriented programs that produce near-term cost reductions. Our firm recently did a survey of the most successful CEOs, and they reported that they felt that better strategies had the most potential to most improve their companies. These same CEOs also reported that they understood little about how to create better strategies. In such companies, COMPETING FOR THE FUTURE can provide an excellent balance. A good book to read in conjunction with this one is Peter Drucker's, MANAGEMENT, which provides the intellectual heritage for many of these ideas. For people who need more detail than Drucker normally provides, COMPETING FOR THE FUTURE will be the more helpful book.