Book Summary | Rethinking Competitive Advantage: New Rules for the Digital Age

 

Book :  Rethinking Competitive Advantage: New Rules for the Digital Age.

Author : Ram Charan

Many of us are experiencing the greater convenience using digital platforms. These digital platforms have enabled lower price, greater convenience, and instant access to relevant information to the consumers, businesses and employees. These digital giants have forever changed our experience as consumers and employees.

Creating competitive advantage is different in the 

digital age. In the digital age. Competitive advantage is the ability to win the ultimate price the consumer preferences, repeatedly through continuous innovation on behalf of the consumer to create immense value for shareholders. Core competencies have a self-life.  They become obsolete and new ones have to be built. Today due to information availability in abundance, the consumer takes the call.

Roadblocks to moving into Digital

1.       An overreliance to outdated theories

2.       A dominant psychology of incrementalism and short term thinking

3.       A blind spot when it comes to customers

4.       Acceptance of existing boundaries

5.       Belief in mass markets and segmentations

 

New Rules of Competition

# 1.  A personalized consumer experience is key for exponentiation growth.

The digital companies imagine a 100X market space that does not yet exist. Digital giant’s relentlessly focus on consumer’s total experience end and work backwardly.  They operate with the mind-set of Market of One – M=1, is the ultimate personalization.  Technology is important, but the ultimate focus is on the consumer. Mapping the customer journey is emerging as distinct expertise. It involves breaking apart all of the interactions and decisions steps a consumer goes through from first exposure to an idea or recognition of a need through to what happens after the person makes a purchase.  Leaders in the digital age takes on a stiffer but more exhilarating challenge.

# 2. Algorithms and Data are essential weapons

The digital platforms are built using algorithms and data that collects and analyses various customer experiences and behaviors.  Each algorithm is a simpler sequence of steps for solving a problem. The ability to personalize an end-to-end consumer experience creates market space of 100x.  A digital platform is also key to exponential growth. Standardization of data will eliminate lot fo the waste in record keeping and combined with algorithms can detect fraudulent billings Technology, logistics/ distribution and customer experience are the key pillars for digital growth.

#3. A company does not compete, its ecosystem does.

The ecosystem accelerates the growth. In digital age, competitive advantage goes to those who build ecosystem or network that leverages digital technology for the benefits of the consumers and paves the way to multiple streams of revenue. Ecosystem are never permanent, because the work is moving at such a ferocious speed, technology changes continue to accelerate and consumer expectations, continuously evolve finding new partnerships.

# 4. Moneymaking is geared for huge cash generation, not earnings per share, and the new law of increasing returns.

# 5. People culture and work design form a social engine that drive innovation and execution personalized for each customer.

Most digital companies operate with as few as three or four organizational layers. The digital companies recognize that structure goes lonely so far and that success ultimately depends upon the quality of its people. Technology plays a key role in giving people greater freedom to do their work. Technology makes real time data transparent, but still the organization depends upon people to knit the pieces together on a daily basis. Decision-making is designed for innovation & speed.

# 6. Their leaders drive learning, reinvention and execution.

Leaders continuously learn, imagine and breakthrough obstacles to create the change that other companies must contend with.

Book Review | The Execution - The Discipline of Getting Things Done

Book Name : The Execution - The Discipline of Getting Things Done 
Author : Larry Bossidy & Ram Charan

Execution is a systematic process of rigorously discussing how’s and what’s, questioning, tenaciously following though and ensure accountability.  This book is a great insight into where things typically go wrong in all big small and medium projects. This book provides a frame work on which values, principles and working strategy needs to be inherited for successful execution. The book talks about dos and don’ts in easy to understand language. Once you start relating the topics covered to your days to day operation issues which you face at work it keeps on becoming more and more interesting. The real time examples and solutions make the book interesting to read. I personally feel that the principles explained in the books can be adopted to our personal life as well as at the workplace•

Summarizing the key thoughts from the book:

1.Most often today the difference between a company and its competitor is the ability to execute. People think of execution as the tactical side of business, something leaders delegate while they focus on the perceived bigger issues.  Execution is not just tactics – It is a disciple and a system. It has to be built into a company’s strategy, its goals, and its culture.

2.Execution is a specific set of behaviors and techniques that companies need to master in order to have competitive advantage.

3.THE HEART OF EXECUTION LIES IN THE THREE CORE PROCESSES; the people process, the strategy process, and operations process

4.The skill of coach is the art of questioning.

5.To change a business’s culture you need to set of processes – social operating mechanisms – that will change the beliefs and behavior of people in ways that are directly linked to bottom-line results.

6.COMPETENCIES: Functional skills, business skills, management skills and leadership skills.

7.A ROBUST PEOPLE PROCESS DOES THREE THINGS. It evaluates individuals accurately and in depth. It provides a frame work for identifying and developing the leadership talent- at all levels and of all kinds- the organization will need to execute its strategies down the road. It is based on

  Linkage to the strategic plan and its near, - medium-, and long term milestones and the operating plan target, including specific financial targets

• Developing the leadership pipeline through continuous improvement, succession depth and reducing retention risks



• Deciding what to do about non-performers



• Transforming the mission and operations of HR

8.Succession depth analysis determines whether the company has enough high potential people to fill key positions. It also looks at whether there are high potential people in the wrong jobs and whether key people will be lost if a job is not unblocked for them.