OUTSMART! A book review by Bob Morris

Posted on: June 10th, 2011 by bobmorris

OUTSMART! How to Do What Your Competitors Can’t
Jim Champy
Financial Times Press/Pearson (2008)

Previously, Champy argued in Reengineering the Corporation (1993) that “companies need to change radically and be managed from a process perspective,” in Reengineering Management (1995) he contended that “leaders had to change their way of thinking before they could change their organizations,” and then in X-Engineering (2002) he made the case that “process change must extend outside the company walls to suppliers, customers, and business partners.” What we have in his newest book is a brilliant research-driven analysis of eight results-driven companies that he and his associates selected from among about 1,000 high-velocity businesses with growth rates about 15%. More specifically, they examine their revenue producing ideas that are “neither hypothetical nor based on esoteric technologies. They don’t require hundreds of millions of venture capital dollars or the vast sums from stock offerings to implement. ” Champy then makes an especially important point: “Rather, they are strategies that any business leader can easily and immediately understand.”

These are the eight exemplary companies that have outsmarted their competition, not only surviving but growing, gaining more of the supply of their customers, forcing their rivals “to adapt or die”: Sonicbids, MinuteClinic, Smith & Wesson, Shutterfly, S.A. Robotics, Jibbitz and Crocs, Partsearch, and SmartPak. Few of those who read this book will recognize most of them by name. (I recognized only Smith & Wesson and Crocs.) Champy devotes a separate chapter to each. All of them “have found the holy grail of strategy: an unmet customer need.”

Having read and then re-read this book, here are three reasons why I think it is Champy’s most valuable contribution to knowledge leadership…thus far. First, unlike in his previous books, there is an almost total absence of theories, hypotheses, methodologies, and formulas. On the contrary, as he repeatedly stresses throughout his narrative, what “works” for each of the eight companies may not necessarily produce desired results for another, even if attempted by any of the other seven. One of his recurrent themes is “learn by doing.” With all due respect to the entertaining as well as informative vignettes he provides, Champy notes that “each example in this book is unique, and none of these companies has a formula you can follow without changes to how you operate.” Let’s say that outsmarting the competition, forcing rivals “to adapt or die” is the given vision. Thomas Edison was right: “Vision without execution is hallucination.”Champy helps his reader to understand how to learn more by doing more and doing it better. But first, businesses must know both who they are and who they aren’t.

Also, Champy recalls Charles Darwin’s three basic declarations: Species always breed beyond available resources; those with favorable variations have a greater chance of survival and pass along their variations to their offspring; and, adapted species force out weaker ones, producing whole new species. A comparable process of natural selection occurs in a business world that “has never been more complex, volatile, and demanding, yet so full of opportunity.” Champy goes on to suggest that, in fact, “the business world has become a great dynamo of fascinating new practices that can sharpen any company’s competitive edge.” One of the greatest benefits to be gained from this book is the development of an adaptive mindset, one that enables those who possess it to respond quickly and effectively to sudden and often unexpected challenges.

Finally, Champy devotes most of his attention to the “what” and “why” of successful competition, then steps aside and allows the CEOs of the exemplary companies explain in their own words the “how” of what they did (and didn’t do) to outperform their rivals. Their efforts were guided and informed by Peter Drucker’s advice to know where you are, where you want to be, and how to get there. Advice such as this from a wide variety of sources (including the CEOs of the exemplary companies) is seamlessly integrated within Champy’s narrative. Once readers absorb and digest that advice, they must then select whatever is most relevant their own organization and then it adapt to the formulation and execution of an appropriate strategy. Moreover, they need to keep in mind that today’s “holy grail” (i.e. an unmet customer need) will soon become obvious to everyone else. Hence the importance of continuous and rigorous adaptation. This is not an operations manual; rather, a manifesto. Its central idea? Adapt or perish.


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