Enduring Success: What Top Companies Do Differently PDF
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Enduring Success What Top Companies Do Differently Franz Bailom, Kurt Matzler and Dieter Tschemernjak ENDURING SUCCESS This page intentionally left blank Enduring Success What Top Companies Do Differently Franz Bailom, Kurt Matzler and Dieter Tschemernjak Translated by Matthew Stevenson and Annette Joyce, Language by Design ©FranzBailom,KurtMatzlerandDieterTschemernjak2007 Allrightsreserved.Noreproduction,copyortransmissionofthis publicationmaybemadewithoutwrittenpermission. Noparagraphofthispublicationmaybereproduced,copiedortransmitted savewithwrittenpermissionorinaccordancewiththeprovisionsofthe Copyright,DesignsandPatentsAct1988,orunderthetermsofanylicence permittinglimitedcopyingissuedbytheCopyrightLicensingAgency, 90TottenhamCourtRoad,LondonW1T4LP. Anypersonwhodoesanyunauthorizedactinrelationtothispublication maybeliabletocriminalprosecutionandcivilclaimsfordamages. Theauthorshaveassertedtheirrightstobeidentified astheauthorsofthisworkinaccordancewiththeCopyright, DesignsandPatentsAct1988. FirstpublishedinAustriain2006byLindeasWasTop-Unternehmen andersmachen FirstpublishedinEnglish2007by PALGRAVEMACMILLAN Houndmills,Basingstoke,HampshireRG216XSand 175FifthAvenue,NewYork,N.Y.10010 Companiesandrepresentativesthroughouttheworld PALGRAVEMACMILLANistheglobalacademicimprintofthePalgrave MacmillandivisionofSt.Martin’sPress,LLCandofPalgraveMacmillanLtd. Macmillan(cid:2)isaregisteredtrademarkintheUnitedStates,UnitedKingdom andothercountries.PalgraveisaregisteredtrademarkintheEuropean Unionandothercountries. ISBN 978-1-349-36192-2 ISBN 978-0-230-28704-4 (eBook) DOI10.1057/9780230287044 Thisbookisprintedonpapersuitableforrecyclingandmadefromfully managedandsustainedforestsources.Logging,pulpingandmanufacturing processesareexpectedtoconformtotheenvironmentalregulationsofthe countryoforigin. AcataloguerecordforthisbookisavailablefromtheBritishLibrary. AcatalogrecordforthisbookisavailablefromtheLibraryofCongress. 10 9 8 7 6 5 4 3 2 1 16 15 14 13 12 11 10 09 08 07 For our “master teacher,” Professor Hans H Hinterhuber, who always taught us to separate what is important from what is unimportant, to see the larger picture, rather than small details, to find enthusiasm for new ideas and to develop a feeling for vision and strategy. We dedicate this book to him. This page intentionally left blank Contents Foreword ix 1 In search of the secrets of success 1 2 The customer-value competition is pushing many companies to the limit of their possibilities 7 Changing market dynamics – the profitability of many companies is increasingly at risk 8 Success of the optimizers in the customer-value competition 11 The innovators’ success in the customer-value competition 13 Summary conclusions to phase 1 14 3 The IMP Model: The strategies of winners 23 The IMP Model 25 The result: Explaining 50 percent of corporate success is a lot, but at the same time not much 26 Core findings 27 4 What makes top performers different 35 Top performers never settle for today’s success 36 The most senior executives are themselves the innovation drivers in the company 38 Top performers succeed in combining forward-looking market knowledge with sustained competence management 42 Top performers show an impressive understanding of innovation 44 Top performers rely more on uniqueness than on market share 47 Top performers put strong emphasis on culture development 50 5 Market orientation: Understanding markets, shaping the future 55 Sourcing market knowledge: The new sources of innovation 55 From simple to complex markets: Understanding the rules of the game 63 The new role of market research 71 vii viii Contents 6 The sails determine the course, not the wind 77 The market-based view versus the resource-based view 77 The sources of core competences 83 Managing core competences 91 7 Corporate culture: The latent potential 99 Values and identity as a basis for commitment 102 The entrepreneurship culture 105 8 Innovation: Improving existing things, creating new things 113 Delighting customers with something new 114 Cost competition: Redesigning processes 120 Gearing processes toward the customer 125 Developing new business models 129 9 Top management: The architects of success 133 Leadership, innovation, and change 134 The ability to be lucky 139 10 What do top companies do differently 145 11 The insights of great leaders 151 PeterBrabeck-Letmathe,ChairmanandCEO,NestléSA,Vevey, Switzerland 151 Markus Langes-Swarovski, member of the executive board, Swarovski 156 Prof. Dr Michael Popp and Dr Uwe Baumann, Bionorica AG 160 Stefan Pierer, CEO, KTM sportmotorcycle AG 165 René Obermann, CEO, Deutsche Telekom 170 Prof. Dr Michael Mirow, Former Head of Strategic Planning, Siemens AG 175 Peter Lorange, President of IMD Business School, Lausanne 177 Hans-Joachim Reck, Partner, Heidrick & Struggles, Germany 181 Notes 185 Bibliography 193 Index 203 Foreword This book is written for people who want to make a difference. People who wanttomakeadifferenceneed“theserenitytoacceptthethingstheycannot change, the courage to change the things they can, and the wisdom to know the difference” (Friedrich Christoph Oetinger). Thisbookisintendedtoprovidefoodforthoughtandgiveyoutheimpetus to bring about those changes that are necessary to maintain or increase the competitiveness of the companies you run or the companies in which you work. It should help increase your awareness of what is essential and direct yourattentiontowardsthoseleversthathaveadecisiveinfluenceonthesuccess of the company. “What Top Companies do Differently” is the result of a 4-yearresearchproject.Itisasynthesisofourscientificstudies,ourexperience in practice, and of numerous conversations with successful entrepreneurs and senior executives. Our objective was to find out the secret of top companies’ success.Withthehelpofnumerousindividualsandinstitutions,wewereable to move a little further towards that goal. We would like to thank the 1100 senior executives and companies who participatedinourstudiesandmadetheirvaluabletimeandknowledgeavail- able to us for our analysis work. Particular thanks are due to Peter Brabeck- Letmathe,Nestlé;MarkusLanges-Swarovski,Swarovski;PeterLorange,IMD; Michael Mirow, Technische Universität Berlin; René Obermann, Deutsche Telekom; Stefan Pierer, KTM; Michael Popp and Uwe Baumann, Bionorica; andHans-JoachimReck,Heidrick&Struggles,who,inthecourseofintensive discussions, provided critical reflection on our research findings. They gave us an insight into their views on leadership and strategy, and their ways of thinking. Thisresearchprojectwasonlypossiblethankstothecommitmentofourenthu- siasticcolleaguesatIMP.Inparticular,ourthanksareduetoAlexanderKausl andAndreasStaudacherfortheirconsiderablesupportinplanningandcarrying out the empirical studies: their contributions formed the central pillar of the entireresearchproject.WealsothankJohannWiespointner,MarkusAnschober, Josef Storf, and Werner Müller, who engaged us in thought-provoking discussionandwhosevaluablecommentsgaveusmuchtothinkabout. OurthanksgotoArturBobovnicky,WolfgangBraitsch,ElisabethKlapsch, andMonikaMillerfortheirsupportduringtheentireresearchproject.Thanks ix
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