- A Sweet Spot
- Agile, Disciplined, and Focused
- Managing the Tension
- In Summary
This chapter is from the book
This chapter is from the book
This chapter is from the book
Managing the Tension
There is built-in tension to hitting the mark. Agility means maintaining the flexibility to change direction quickly, whereas discipline and focus imply the opposite—digging in, reinforcing, and securing a space, and refusing to budge or give it up until all the benefits have been reaped. The tension between agility on the one hand and discipline and focus on the other has to be managed creatively.10 If managed well, you have realized one of the rarest, most valuable, and hardest-to-reproduce capabilities that your firm can possess. (See Table 1.3.)11
Table 1.3 -Big Winners Manage the Tension Among Agility, Discipline, and Focus
|
A Sweet Spot |
Agility (Move) |
Discipline (Protect) |
Focus (Extend) |
|
Goal |
Achieve growth |
Enhance profits |
Realize profits and grow |
|
|
Innovation |
Efficiency |
Reform and refinement |
|
|
Reinvention |
Operational excellence |
Fine-tuning |
|
Actions |
Explore |
Exploit |
Explore and exploit |
|
|
Prospect |
Defend |
Analyze |
|
Strategies |
Vision |
Mission |
Mission-vision |
|
Conditions |
Disequilibrium |
Equilibrium |
Equilibrium- disequilibrium |
|
Technologies |
Disruptive |
Sustaining |
Sustaining-disruptive |
|
Industries |
Dynamic |
Static |
Dynamic-static |
|
Image of the Future |
Unpredictable |
Like today |
Gradually evolving |
|
People |
Revolutionaries |
Controllers |
Improvers |
|
|
Break rules |
Enforce rules |
Fix rules |
If the tension among agility, discipline, and focus is not managed well, you might have a disaster on your hands. An example of a company that did not manage this tension well was Xerox. The personal computer (PC) revolution came about because of innovations made in the 1980s at Xerox’s Menlo Park research division.12 Prior to the 1980s, its research division pioneered in almost all the building blocks that went into the PC, from the mouse to the printer. Years after Xerox played a substantial role in inventing these devices, it still was in the copying business. It saw no profits from these efforts. It did not have the agility to move to a new position.
When you find a sweet spot, you cannot let internal politics keep you from taking advantage of it. You must move into the space and occupy it. If you know about a sweet spot and do nothing, what good have you done?
Managing the tension among agility, focus, and discipline is paradoxical. To be successful, you have to explore for new territory, but you also have to exploit the ground you currently hold.13 You have to prospect for new businesses while defending the positions you presently occupy.14 You have to be a constant analyzer on the lookout for new ground to occupy, while protecting the spaces you currently hold. Doing all of this well and at the same time is a formidable undertaking that strains even the best management teams.
It is rare for a company to be able to do all of this simultaneously. Thus, it is rare for companies to persist in their winning ways for long.
Keep in mind that your firm is always operating in a state of tension between what it is now and what it is trying to become. Thus, you must have a mission that expresses pride in what your firm has been good at in the past and a vision that serves as a roadmap for where you would like to go in the future. You are constantly tugged and pulled apart by the poles of what you have been, what you are good at and what got you to where you are today, and what you would like to be.
Future conditions are unclear, and you need to have options for whatever contingency arises. If you want to achieve sustained competitive advantage, you must keep at least three horizons in the forefront simultaneously. You have to defend your core business, build emerging businesses, and create real options for future growth. 15
Creating future options is where agility plays its primary role. It means building emerging businesses. Discipline means sharpening what you currently do best, while focus means reaping the full benefits of the activities in which you are currently involved. An example comes from the automotive industry. A company today must concentrate on the internal combustion engine and its associated technologies to meet current profitability goals. It has to have the discipline to do so efficiently and effectively. The competition in today’s markets is brutal. But an automotive company must go beyond today’s technologies and start to market hybrids that combine current technology with lighter and more aerodynamic materials, electric engines, and regenerative braking. And even this is not enough. A company must look further into the future and be open to a different tomorrow by undertaking research and development on hydrogen-based fuel and fuel cell technologies. An automotive company must consider these three horizons simultaneously and manage them concurrently, but concurrent management is not easy.
Concurrent management is a juggling act of immense proportions that helps to explain why being a big winner is so hard. You want to thrive today and plan for tomorrow and for the day after.
Winning companies put together the attributes of agility, discipline, and focus into larger wholes that allow them to function well today and to plan for tomorrow and the day after. Losing companies combine rigidity, ineptness, and diffuseness, which make it impossible for them to do well today, tomorrow, or the next day.
Real Trade-Offs
Winning firms face real trade-offs. For example, if a firm is agile, it must be constantly ready to move. It has to be able and willing to abandon the space it currently inhabits for something better. If it is disciplined, on the other hand, it foregoes the capacity to rapidly morph into something else. If it is focused, it deepens its commitment to the space it currently occupies.
Of the 1,000 largest U.S. firms from 1992 to 2002 (see Chapter 2), only about 3 percent were big winners. Another 6 percent did the exact opposite—they endured the pain of regularly losing. The ability to manage the tension of moving, protecting, and extending a sweet spot is hard. If it were easy, everyone would do it, and it would be of little value. The fact that it is so hard to do is the best indication of the contribution it makes to the creation of enduring advantage. Because enduring advantage is so uncommon, it is very difficult to do.
The problem has been that until now, gurus of one sort or another have put too much emphasis on just some of these qualities—either agility or discipline and focus. (See Appendix A, "Best Sellers Compared.") Yet the truth of the matter is that you must do it all. Excessive movement and excessive staying put are not the way to stand out. Too much agility would be just as problematic as too much discipline and focus. Distinction comes from achieving the right balance. It derives from properly managing this tension.
Winners achieve sustained competitive advantage a step at a time by cultivating qualities that capture aspects of agility, discipline, and focus. They fashion unique patterns of these attributes. Losers, on the other hand, engage in the opposite process. One by one, they accumulate the negative qualities that lead to their demise.