Rethinking Competitive Advantage

September 28, 2020
According to this thin treatise from business adviser Charan (The High Potential Leader), the main takeaway from the success of today’s tech giants isn’t how they use data and algorithms but their policy of continuous innovation on behalf of the consumer. In discussing Google, Apple, and Alibaba, among others, he gives some thought to how readers can push their own companies—whether digital enthusiasts or skeptics—in the same direction. To that end, he suggests companies should follow six rules, all revolving around thinking big, being digital, and understanding and building on a viable and fast-growing commercial niche. Charan’s main example is Netflix, a company that drastically transformed itself to take advantage of the new opportunity presented by streaming, but he also discusses other major business moves, like Walmart’s purchase of Jet.com, and delves into how companies like Google shook up hiring practices in order to build top-flight workforces. Unfortunately, the advice is not particularly concrete and borders on offhanded—his suggestions to leaders on finding big ideas is to “discuss with your team” and “identify emerging trends that are likely to be sustained for the next... 10 years.” While the high-level view of successful companies is intriguing and inspiring, the generic advice is likely to be met with an if-it-were-only-so-easy eye roll.

October 1, 2020

Business consultant Charan believes that the digitization of business has radically changed the way it's practiced by successful companies, with the understanding that companies must go digital or die. He sees this digital transformation as more than just incorporating online platforms, but also restructuring what the business does. Modern technology can aggregate and analyze data on consumers and therefore allows companies to identify consumers' needs and set out to fulfill them by offering personalized products and services. This, in turn, helps them increase the size of their market. Charan is at his best in the chapter on "Digital Platforms at the Center of the Business," in which he tries to show what various portals can do and how they should be used. He also gives insightful profiles of a number of companies, such as Fidelity PI, Walmart, and Disney. However, often the advice is abstract and vague, such as "hiring the right people" or "leaders need imagination and vision." Additionally, his sketchy discussion of algorithms and their uses is a major lacuna. VERDICT This book is aimed at managers trying to understand how to transform from traditional to digital businesses.--Shmuel Ben-Gad, Gelman Lib., George Washington Univ., Washington, DC

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