From the Bookshelf Business survival depends on innovation by Susanna Tai Competitive edge comes from constant evolution The forces of globalisation have caused businesses of all sizes and in virtually every industry to review their strategies and rethink their approach to innovation. They can no longer rely on what has worked in the past and, like endangered species, risk the possibility of becoming extinct if they cannot adapt to the new world around them. In Dealing with Darwin: How Great Companies Innovate at Every Phase of Their Evolution, author Geoffrey A Moore sees innovation as essential for creating advantage in an ever-changing competitive landscape. He also advises business leaders to invest sufficient resources to promote innovation and make it one of their key priorities. The basic concept of the book borrows from Darwinism, likening the business world to an ecosystem where the fight for scarce resources ultimately leads to natural selection. The companies with the best strategy and execution are able to evolve and come out on top. In the introduction, Moore sets out his case. "Evolution requires us to continually refresh our competitive advantage," he writes. "To innovate forever... is not an aspiration; it is a design specification. It is not a strategy; it is a requirement." He proceeds to offer a detailed analysis of what innovation means in different scenarios. The main point is that management teams must accept the challenge of innovating in a way which is appropriate in context and differentiates them from the competition. Moore identifies 15 of the most common approaches and explains which may work best for companies at different stages of development. Four are for use in growth markets, eight for mature markets and three for "end of life" situations (p.61). Case studies Case studies, many of them relating to high-tech businesses, illustrate the theories. Thus, Oracle is cited as an example of a complex systems company which found an advantage by introducing a revolutionary portable database (p.76). Showing how process innovation can work in a mature market, the author notes how McDonald's invented "a scalable franchise". This was done largely by rigorously engineering every process from procuring, cooking and order taking to hiring, store design and facilities management. Moore repeatedly cites network company Cisco Systems. It has faced the challenge of innovating simultaneously in new and mature markets and, therefore, has had to devise numerous strategies to meet the divergent needs. Right context One of Moore's key concepts is that companies need to get resources aggressively from "context" and shift them to "core", which is what sets a company apart and gives it a competitive edge. The core is "the innovation type upon which you have based your strategy (p.202). Meanwhile, context is everything else, including what it takes to meet commitments to stakeholders, comply with laws and regulations, and meet industry standards. For Cisco, the core is targeting telecom companies, selling new technologies and focusing on China, Eastern Europe, India and Russia. Its context is its established network router business in North America, Japan, Western Europe and Australia. The book warns readers about the difficulties of implementing innovative strategies and customising them to unique situations. But it also makes clear: "That's what evolution is all about, a continual raising of the bar... natural selection is a game with no time-outs" (p.260). Moore advises businesses to keep evolving and never to assume it will be possible to continue to succeed by maintaining the status quo. Content highlights: Innovation in and of itself is valuable but becomes less necessary and less possible as businesses mature The essence of innovation is the same in any company To tackle inertia and stimulate innovation at the same time, re-examine core principles About the authors Geoffrey A Moore is managing director of TCG Advisors, a consulting firm specialising in strategy and business transformation services, and a venture partner with Mohr Davidow Ventures He has written four best-selling business books: Crossing the Chasm, Inside the Tornado, The Gorilla Game and Living on the Fault Line Moore holds a bachelor's degree in literature from Stanford University and a doctorate in literature from the University of Washington Taken from Career Times 15 September 2006 Your comments are welcome at [email protected]