Competing For The Future : Breakthrough Strategies For Seizing Control Of Your Industry And Creating The Markets Of Tomorrow by Gary Hamel and CK Prahalad is an important book in the history of strategy.
It popularised the important insights and ideas that came out of resource based strategy in the early nineties because it’s one of the few strategy books that crossed over into the mainstream management books.
It was written at a time when business process re-engineering and restructuring were the popular panaceas for business success but there was one fundamental problem…
You can’t cut your way to growth.
Competing For The Future Review
The Originals Of “Competing For The Future” by Gary Hamel and CK Prahalad
Gary Hamel and CK Prahalad were intrigued by the question of why smaller rivals could beat much bigger, richer companies and why market power and market share advantages were not a strong enough defence.
This focused the authors attention on the entire process of creating future competitive advantages. They noticed that some management teams had more foresight and competed to build future competencies rather than immediate market share.
Three Key Questions: The 40/30/20 Rule
I love the power of these three questions asked early in Competing For The Future, to focus attention on how much time you really spend thinking about what may happen.
- What percentage of your time is spent on external rather than internal issues?
- Of this time, how much is spent considering how the world will be different in five to ten years time?
- Of the time devoted to looking outward and forward, how much of it is spent consulting with colleagues to build a shared, well tested view of the future?
Try and ask yourself those questions before you go any further.
Hamel and Prahalad found a 40/30/20 rule which meant that just 2.4% of time was spent building a shared view of the future. In some cases it was less than 1%.
To quote from Competing For The Future “The urgent drives out the important, the future goes largely unexplored and the capacity to act, rather than the capacity to think to think and imagine, becomes the sole measure of leadership.”
The problem is that the competitive process of imitation means tomorrow’s competitive advantages will be different from those successful today.
How Do You Get To The Future First?
Competing For The Future is based around a four step process for getting to the future first:
- An understanding of how competition for the future will be different
- A process for finding and gaining insight into tomorrow’s opportunities
- An ability to energise the company from top to bottom in the journey to the future.
- The capacity to outrun competition without taking unnecessary risks
The Key Concept Of Opportunity Share
Gary Hamel and CK Prahalad argue that strategy should be about competing for future opportunity share rather than market.
It is based on building competencies that give you the opportunities to compete in multiple markets, many of which don’t exist yet.
This Isn’t Intended To Be A Competing For The Future Summary
I’m not intending to summarise each chapter of the book, this is a review of Competing For The Future.
I’m planning to write separate blog articles that pick up on the two big ideas from Hamel and Prahalad – Strategic Intent and Core Competencies.
4 Competing for industry foresight
5 Crafting strategic architecture
6 Strategy As stretch
7 Strategy as leverage
8 Competing to shape the future
9 Building gateways to the future
10 Embedding the core competence perspective
11 Securing the future
12 Thinking differently
Overall Thoughts On Competing For The Future
Competing For The Future by Gary Hamel and CK Prahalad is a very important book on strategy but it’s not one of my personal favourites.
Like many books that start out as articles in the Harvard Business Review, I have the feeling that it’s been padded to book length.
It is impressive in the early sections where it makes clear how little time senior management do spend thinking about the future and therefore, no wonder, there are problems with strategy.
It also feels dated with examples from the technology world that have long since been and gone.
It’s not a book for SME’s interested in competitive strategy. I first read Competing For The Future when I was working in the corporate world but for small groups and I didn’t get much out of it that I thought I could take away and apply.
It’s much more about how corporate strategy and how to build and develop core competencies that can be used across the entire organisation.
Have You Read Competing For The Future?
If you’re read this book by Gary Hamel and CK Prahalad, I’d be very interested to know what you think about it, so please leave a comment.
Paul Simister is a business strategy coach who helps business owners to differentiate their businesses and develop winning strategies. Get your free copy of the ebook The Six Steps Profit Formula.
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