'Hyper' business strategies to beat today's competition

ON EXCELLENCE

October 03, 1994|By TOM PETERS

I recently attended the grand finale of the Whittemore Conference on Hypercompetition at Dartmouth's Amos Tuck School of Business. Four messages were delivered with particular force:

* Think disruption.

Tuck's Richard D'Aveni coined the term "hypercompetition." Today's outrageous pace of change, he says, calls for upside-down business approaches.

"Chivalry is dead," D'Aveni writes in "Hypercompetition: Managing the Dynamics of Strategic Maneuvering."

"The new code of conduct is an active strategy of disrupting the status quo to create a series of unsustainable advantages." (That's right, UNsustainable -- i.e., hunting for and quickly exploiting competitive edges, then abandoning them before the competition responds.)

"This is not an age of defensive castles, moats and armor," he continues.

"It is rather an age of cunning, speed and surprise. It may be hard for some to hang up the chain mail of sustainable advantage after . . . so many battles. But hypercompetition, a state in which sustainable advantages are no longer possible, is now the only level of competition."

D'Aveni's favorite word is "disruption."

He offers a vision for disruption, competences for disruption, tactics for disruption.

Using scores of compelling examples from hot-sauce wars to computer skirmishes, D'Aveni makes clear that there's no place to hide from this new world order. Thence his relentless attack on the static bias of most strategic thinking -- e.g., McKinsey & Co.'s 7-S business model (strategy, structure, systems, etc. -- I was its co-inventor back in 1978).

McKinsey aimed to help clients fit together the pieces to create, for example, systems and a structure that frictionlessly support the strategy. Wrong, D'Aveni snorts: MISfit is the point!

He even gives us a new 7-S paradigm, including, surprise, shifting the rules of competition and strategic soothsaying (looking for information in highly unconventional ways -- perhaps Nancy Reagan's astrologer?)

The energetic, arm-waving (though academically sound) D'Aveni is a very fresh voice urging managers to "build" enterprises dedicated to perpetual revolution.

* Think service.

How dominant are "services"? Would you believe 96 percent of us ply service trades?

That's Tuck luminary Brian Quinn's estimate. He calculates that 79 percent of us work in the official service sector (transportation, retail, entertainment, etc.), and of the 19 percent still employed in so-called manufacturing, 90 percent do service work (design, engineering, finance, marketing, distribution, etc.).

With capital investment per person in services running above manufacturing, sophisticated sector leaders such as Wal-Mart are now calling the shots -- and virtually dictating manufacturers' strategies. The world's two most competitive economies -- the United States (No. 1) and Singapore (No. 2) -- displaced longtime leader Japan this year, according to the acclaimed World Economic Forum annual survey. A big reason for our high marks: an enormous edge in services productivity.

* Think front line.

Terry Neill, head of Andersen Consulting's worldwide change-management practice, summarized in-house research that pinpoints "death by a thousand initiatives" as the chief reason corporate renewal efforts fail.

TQM on Wednesday, re-engineering on Thursday, a learning organization on Friday.

All these ideas are important, but when fired at employees like Ping-Pong volleys, they overwhelm, confuse -- and hopelessly diffuse organizational focus.

Winners, Neill claims, outexecute, rather than outstrategize, their competitors (i.e., it's the front line, dummy!). Neill translates an old French saying, "Change is a door that can only be opened from the inside." Or, as Notre Dame football coach Lou Holtz puts it: "It's not my job to motivate players. They bring extraordinary motivation to our program. It's my job not to DEmotivate them." Genuine empowerment, Neill concludes, is not the things you do to or for people; it's the impediments you take away, leaving room for folks to empower themselves.

* Think Asia.

Longtime Asia hand Jim Abegglen insists the center of the industrial world is not shifting to Asia -- it has already shifted to Asia! "Does your business strategy reflect that?" he asked 125 senior execs with a skeptical smile.

Abegglen also surprises when he says, "Think Indonesia." That country, the world's fourth most populous, is where China will be in 10 years if all goes well for China -- hardly a sure thing. Any plans to head for Indonesia any time soon? No? Why not?

Happy hypercompetition!

Tom Peters is a syndicated columnist. Write to him at Tribune Media Services Inc., Suite 1500, 435 N. Michigan Ave., Chicago, Ill. 60611; (800) 245-6536

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