Successful companies often become victims of their own success — as their business grows, they find it impossible to reinvent themselves. To regain and maintain growth they need to learn to thrive on radical change and disruption. Right?
Authors Chris Zook and James Allen take dead aim at one of the sacred shibboleths of business – the notion that companies must “change or die” – and score a bullseye with Repeatability. Drawing on a fascinating array of research findings and real-world examples, the authors – who have more than 50 years of strategy consulting experience between them – try to correct the traditional errors connected with over-complicating and over-planning strategy that can make it expensive and non-sustainable. In their own words, “Our data shows simplicity, focus and mastering the art of continuous change nearly always trump strategies of radical change or constant reinvention.”
The authors’ basic premise is simple: that successful companies endure by maintaining simplicity at their core. And that complexity is the silent killer of profitable growth. Companies that have shown sustainable growth, they say, don’t stray from, or regularly discard, their business model in pursuit of radical renovation. Instead, they build a repeatable business model that produces continuous improvement and allows them to rapidly adapt to change without succumbing to complexity.
In some ways this book is saying much the opposite of what Harvard Business Professor and praised author Clayton M Christensen first said in his 1995 article, “Disruptive Technologies: Catching the Wave”, which transformed the way business looks at innovation. (Christensen went on to replace disruptive “technology” with disruptive “innovation” because he said it is actually the business model that the technology enables that creates the disruptive impact.) Or what advertising agency TBWA CEO Jean-Marie Dru said in his book Disruption — that it is radical departures from conventional thought that transform brands and companies into global champions.
I cite these examples to show that the authors have taken on a very difficult task — to challenge a lot of what we have read before as business students and professionals, and present a new way of looking at things. And they score by bringing a clear, rational approach to a very complicated topic. Their view is set out over six chapters that start with the “Great Repeatable Model”, going on to define the negotiables and non-negotiables of business, and then laying out a framework of learning and leadership and closing with the “Triumph of Simplicity”.
Their research draws on the experiences of some of the world’s best-known firms. The cases have a lot of variety in them (as to the type of the organisation, the size of the organisation, the cultural background and so forth). Most business books choose the same examples over and over (by now we know GE, IBM and Coca-Cola inside out), and it gets a little tiring for the reader. Of course, there are a few examples in Repeatability with which most of us would be familiar – say, Apple, Nike, IKEA – but the good thing is the authors have developed lots of new material there.
A common theme that runs through these examples is the importance of learning and adaptability. Adapting, it goes without saying, is critical to survival, but it’s extremely difficult to do. With change constantly surrounding us, employees often do not know where to look or how to respond. This reflects in the overall reaction of a corporation. The travails of Kodak, Xerox, General Motors, LEGO, among others, can be seen in this light as cases of “arrested adaptation”, say the authors. Most of these firms ended up over time in catch-up mode. The thing to remember is that there wasn’t any “amazing and sudden disruptive innovation” that caught the incumbent flat-footed. “The stall-out was often the result of slow response over time to many signs along the way – an organisation that was not good at learning – than failure to see and prepare for huge disruption,” say the authors.
It’s a vital message, but one that too many people ignore or cast aside as facile. Learning, at the end of the day, is about the powerful difference between adapting to cope and adapting to win. Simple.
Simplicity is simple. Writing about it is not. But Zook and Allen have some clear advantages. First, they are very fine writers. This quality is highlighted when they explain ideas that can be hard to grasp (for instance, the explanation of the swarm theory, and how it can be used to explain some organisational behaviour), fleshing out examples, and connecting the core idea to the examples in useful ways.
The book also seems to have been edited well. But there’s this feeling I haven’t been able to shake off. Most business books seem to think every reader is a CEO, and Repeatability is no exception. If you’re looking for a way to improve performance of smaller teams or your own, this is probably not the place for you to look for solutions.
Build Enduring Businesses for a World of Constant Change
Chris Zook and James Allen
Harvard Business Review Press
288 pages; $30