On excellence: Hit and run strategy for hypercompetition

FOUR MESSAGES were delivered with particular force at the Whittemore Conference on Hypercompetition at Dartmouth University's Amos Tuck School of Business:

Think disruption. The school's Richard D'Aveni coined the term 'hypercompetition', saying today's outrageous pace of change calls for upside-down business approaches.

'Chivalry is dead,' he writes in Hypercompetition: Managing the Dynamics of Strategic Manoeuvring. 'The new code is an active strategy of disrupting the status quo to create a series of unsustainable advantages.' (That's right, unsustainable - finding and quickly exploiting a competitive edge, then abandoning it before the competition responds.)

'This is not an age of defensive castles, moats and armour,' 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.'

Disruption is his favourite word. He offers a vision for disruption, competences and tactics for disruption. Using compelling examples from hot-sauce wars to computer skirmishes, he makes it clear there's no place to hide from this new world order. Thence his relentless attack on the static bias of most strategic thinking, such as McKinsey's 7-S business model (strategy, structure, systems and so on, of which I was co-inventor in 1978).

McKinsey aimed to help clients fit together the pieces to create, for example, systems and structure that frictionlessly support the strategy. Wrong, D'Aveni snorts: misfit is the point] He gives us a new 7-S paradigm that includes, surprise, shifting the rules of competition, and strategic soothsaying (seeking information in unconventional ways, perhaps like Nancy Reagan's astrologer?). 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 per cent of us ply service trades? That's the estimate of Tuck School luminary Brian Quinn, who calculates that 79 per cent of us work in the service sector (transport, retail, entertainment, etc) and, of the 19 per cent still employed in so-called manufacturing, 90 per cent do service work (design, engineering, finance, marketing, distribution and so on).

With capital investment per person running higher in servies than in manufacturing, the sophisticated leaders of the sector, 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 long-time leader Japan this year, according to the annual survey of the World Economic Forum. A big reason the US had high marks: an enormous edge in services productivity.

Think front line. Terry Neill, head of Andersen Consulting's change-management practice, summarised in-house research that pinpoints 'death by a thousand initiatives' as the chief reason corporate renewal efforts fail. Total Quality Management on Wednesday, re-engineering on Thursday, a learning organisation on Friday. All these ideas are important, but when fired at employees like ping-pong volleys, they overwhelm, confuse - and hopelessly diffuse organisational focus.

Winners, he says, out-execute rather than out-strategise their competitors (ie, in the front line). 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 programme. 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. Jim Abegglen insists the centre of the industrial world is not shifting to Asia - it has already shifted. 'Does your business strategy reflect that?' he asked. He 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? No? Why not?

TPG Communications