Put down your copy of Cognitive Surplus or Rework, it’s time to talk business: or at least three books about business written by consultants that I think anyone who reckons they know what disrupted businesses should do next should read.
Consultants have one great advantage when they’re writing books: they are walking bibles of case histories. They have spent years walking in and out of businesses getting privileged access to both people, and more importantly to numbers. If they’re good, they know the difference between stuff that sounds good and stuff that really makes a difference to the business.
Unfortunately, they also have a slight disadvantage in that they are not always, shall we put it delicately, the most elegant constructors of prose. But these three books are well worth the effort.
The first of these is Beyond the core: expand your market without abandoning your roots by Chris Zook and his team at
Bain. This is one of three books, all of which deserve your attention – but this one tackles the issue of looking for adjacencies – and buying your launching your way into new markets.
You know that whole thing about ‘Asking what business you’re in’ [it all started with Theodore Levitt's HBR paper 'Marketing Myopia' if you're interested, read the .pdf here ], well, when you’ve worked it out, and you have decided you have freedom to go an buy our launch your way into a new sector or geography, you should really read Zook’s book before doing anything.
Zook looks at why some companies are good at moving into adjacencies and others don’t. I shamelessly lift some of his advice in my book (credited of course). When you read it, you can see how the likes of WPP and Cisco have continued to evolve successfully; and why Naspers and Schibsted have done such a great job of building and buying their way into being real internet businesses as opposed to newspapers with digital bits.
The key lessons: go far enough, but not too far (he has an excellent points based system of working out whether an adjacency is really too much of a stretch); and repeatability.
The next is Jonathan Knee’s The Curse of the Mogul: What’s wrong with the world’s leading media companies, which contains the great chapter heading ‘Efficiency is sexy’.
Knees argument is that media moguls love to behave as if they’re in the swashbuckling wild west of business, cutting big deals lef, right and centre, but if they just dampened down their egos, and focussed on the basics (hence the efficiency is sexy chapter), they’d build much stronger businesses.
He points out that during Michael Eisner‘s time at Disney, for example, the real increase in profits didn’t come from cinema releases, but from opening the theme parks for an extra day, removing the limit on how many people could be in the park at the same time an increasing the entrance fees. Or as he puts it in good old fashioned terms: increasing capacity and putting your prices up.
He is scathing about the internet’s impact on media businesses – pointing out [rightly] that it erodes sources of competitive advantage. I don’t completely buy his recommendation of focussing on local media, but his puncturing of egos and mogul rhetoric is refreshingly blunt.
Finally, and also on the efficiency front, is the rarest of things: a funny book about cost control. Andrew Wileman’s Driving Down Cost: How to manage and cut cost intelligently; which I suspect is doing the rounds at Whitehall at the moment. This came out with perfect timing, just as the recession hit; and at GMG we had at least three consultants send it to us as they were pitching for cost-control work.
There’s nothing particularly exciting about cost control – but Wileman is – unlike the other two – a naturally engaging writer, and he makes his points well. Rather unbelievably, there were bits that I actually laughed out loud while reading – but then, maybe I had been spending a little too much time working with consultants.
The point of all of these books is that they are no-nonsense and methodical. They aren’t caught up in hype or abstract concepts, just the real challenges of trying to make your business better. I learned a lot from all of them.
