The Only Sustainable Edge

Good Books: (via Emergic) John Hagel and John Seely Brown’s book The Only Sustainable Edge: Why Business Strategy Depends on Productive Friction and Dynamic Specialization explains how companies could become successful if they do the right thing. Bill Joy (Sun Microsystems co-founder) used to say: "there are always more smart people outside your company than within it." I think the bottom line is: find specialized business partners on a global scale. It's a good book.

The book has the following introduction:
Many firms have used outsourcing and offshoring to shave costs and reduce operating expenses. But as opportunities for innovation and growth migrate to the peripheries of companies, industries, and the global economy, efficiency will no longer be enough to sustain competitive advantage.

In Your Next Business Strategy, renowned business thinkers John Hagel and John Seely Brown argue that the only sustainable advantage in the future will come from an institutional capacity to work closely with other highly specialized firms to get better faster. Enabled by the emergence of global process networks, firms will undergo a three-stage transformation: deepening specialization within firms; mobilizing best-in-class capabilities across enterprises; and, ultimately, accelerating learning across broad networks of enterprises.

Hagel and Seely Brown discuss the strategic levers that will accelerate this migration, and they outline a new approach to strategy development that will help companies capture this shifting source of strategic advantage.

Calling for a forceful reinvention of business strategy and the very nature of the firm itself, this bold and forward-looking book reveals what every company must do today to become tomorrow’s market leader.

Here is an excerpt from the book:
When customers demand more and control more, a company cannot rely solely on its own capabilities, no matter how distinct. Similarly, a company will struggle to mobilize outside resources unless it can offer exceptional capabilities in return. After all, the best enterprises receive so many proposals to collaborate that they will likely form partnerships only with whoever provides truly compelling, unique value. And so the real strategic power comes when a company integrates and extends these two schools of thought, amplifying the value of its distinctive internal capabilities by creatively and aggressively harnessing complementary capabilities from other companies.

John Hagel blog.