Management
Issue No. 37 - October/November 2007
Inventing a lifeline in copycat economy
With barriers to entry in any business sector crumbling fast, constant innovation is the only sure way to avoid falling into “commodity hell” where the only basis for competition is price, a US expert has warned.
At the recent All TEC Day seminar, American big business advisor Oren Harari told Adelaide CEOs the company setting the agenda would lead its field – no matter how big the company was.
Global information exchange and market analysis had created a “copycat economy” where any product or service innovation was swiftly copied. Any innovator that did not use the temporary advantage to reinvest in finding the next evolutionary step would find its sales premium and marketshare swiftly eroding.
Oren’s salient example that corporate size is no protection was General Motors, North America’s top automotive company by volume, which actually sold cars at a loss in the US in 2006.
“Very often companies are looking for something that doesn’t exist – a ‘magic bullet’ that they can apply in linear fashion,” Oren says, referring to cost cutting or productivity increases across the board.
Often, he says, it’s more important to decide whether to continue a line of business at all, rather than figuring out how to manage it better.
Oren proposes that before any important strategic decision the CEO should follow a rule of thumb according to the acronym EMBER.
“First, is it Extraordinary? Will we w...
