Competing for the Future by Gary Hamel and C. K. Prahalad
“[S]eeing the future first may be more about having a wide-angle lens than a crystal ball. If a top management team cannot clearly articulate the five or six fundamental industry trends that most threaten its firm’s continued success, it is not in control of the firm’s destiny.”
Gary Hamel and the late C.K. Prahalad were the original management Gurus – respected all over the world for their sagacity, foresight, depth of scholarship and pure brilliance. The two colleagues collaborated on many great books on management, of which Competing for the Future is by far the most important.
When Prahalad and Hamel wrote this book, back in 1994, Japan was the flavor of the season, just as China is today. Those were the days of reengineering, as done by the Japanese, just as today business is all about outsourcing and China’s role in it.
Hamel and Prahalad hated the incremental changes brought by reengineering, and argued that a corporation had to go for the kill instead – investigate ways to generate more income rather than just look at ways to slash the budget and improve the return on investment. At that time, this book caused a lot of debate as the “grow big fast” strategy, which has since been made popular by internet companies such as Amazon, wasn’t all that popular in the 1980’s and early 1990’s.
Companies such as Wal-Mart, Honda, Canon and Schwab were the trendsetters of that era, just as Facebook and Google are today. These companies believed in growing big and growing fast, without worrying about slashing costs. Prahalad and Hamel spend a lot of time analyzing these companies and this makes for riveting reading for a business reader.
Essentially, this book is the authors’ war cry against incrementalism in business. Hamel and Prahalad are deeply critical of how majority of the business leaders of this era spent their time – focusing on the present, rather than on the future. They write of how CEOs wasted time on approving yearly, visiting important customers abroad, waiting for sales numbers – when what they should have been doing was to prepare – an compete – for the future.
The authors stress the important of staying ahead of the latest market trends and showing a bit of foresight. Those who arrive first into the future, are likely to benefit the most from it because of an early movers advantage, which their competitors would lack.
Prahalad and Hamel’s theories were proved to be valid a lot later by Steve Jobs by the way he transformed Apple from a company that made computer hardware into a company that invented the future – the iPod, iPad and the iPhone. Had Jobs been an incrementalist, the world would be completely different today. We wouldn’t have smartphones, for instance!
Competing for the Future is a book that has to be read by every serious student of business. Essentially, what Hamel and Prahalad say is that the choices you make today have a strong bearing on the future, and hence should be considered from the perspective of “tomorrow” rather than just “today”.