The Delta Project: Discovering New Sources of Profitability in a Networked Economy

A must read if you are looking for retooling the way you look at running your business. Very well written with great charts and graphs. Very well researched and articulated.

The Delta Model is a recent framework, developed at MIT by A. Hax and a variety of co-authors, to develop more efficient strategies. The core book explaining this approach is The Delta Project, has been released in 2000. Work has continued on the subject, often with Hax's Sloan Fellows students. The Delta approach goes beyond the two dominant approaches to strategy (the famous Porterian five-force model, and the less widespread enterprise competencies/resources model) and gives company strategists the tools to broaden their vision. Among the strong points of this approach, one might mention: * A far greater attention given to the "ecology" of complementors existing around the firm, and the extended company * A much more precise definition of customers (encompassing all the steps up to, and including, the final customer), and very strong emphasis on exquisite segmentation * A strong focus on the notion of "customer bonding" that partially supersedes raw competitive advantage * A rigorous emphasis on execution, and how to measure and pilot the execution of strategy * A clear rejection of the notion of commoditized product, and the formulation of new strategic stances going beyond "best price" or "pertinent differentiation" to include customer integration and system lock-in. Those new dimensions are organized along a figure infamous among Hax students, the Delta triangle. * A focus on customer needs -especially untapped ones - as opposed to benchmarking oneself against competitors

The result of several years of analysis and contribution from some of the world's leading CEOs (in addition to Hax and Wilde), the Delta Project very succinctly creates a visual representation for strategy development that is both descriptive and normative. It explains the "Bonding" principle as a primary strategic force in both SRM (Supplier Relationship Management - including complementors) and CRM (Customer Relationship Management). It shows strategy as a spectrum from "Best Product" to "Total Customer Solution" to "System Lock-In" and the multiple paths and various methods to achieve each end point.This book explains the need for process design from the start (e.g. Six Sigma), management by measurement, the failure of averages (a mean without a STD DEV is a meaningless number), and the difference in High Level and Granular metrics (what my Firm would call Critical Success Factors vs. Key Performance Indicators).Most importantly, it drives home the most critical aspect of a winning corporate/industry/market strategy - operationalization, "Execution is NOT the problem, aligning execution to Strategy is!" I see this every day in my own client consulting. This is not a MBA textbook it is a practical, quick and succinct read.

Wilde and Hax show clearly how companies can reach sustainable rather than fleeting advantage, and they do so with a framework that is applicable across industries.Most tellingly, their model holds up well to describe the fate of Internet and technology companies after the bubble has burst, even though the book was written when the boom was in full swing. Applied in today's context their work successfully explains why eBay has remained strong while companies that merely built a customer list with nothing other than a first to market (or "best product") strategy have struggled.The authors set their book apart from most business texts through the broad applicability of their model and the ability to interpret current events rather than merely past ones.

This book give a clear vision about the strategy changes that companies must take in this changing business world.