Rating: 
Summary: A Gem Destined to Become a Classic
Review: A truly unique management book, based on in-depth research and original thinking, that offers timeless reference points for managers. The author is that rare combination of a truly brilliant management scholar and a seasoned practitioner that has advised corporate managements in dozens of assigments on behalf of Bain & Company, one of America's most highly regarded management consultancies. What a contrast with the dozens of flavor-of-the-month business cure-alls that we are bombarded with every month! Zook starts his book with a sobering fact: only one company in eight achieves sustained growth over periods of 10 years or more. He then sets to explore the common thread between the chosen few, and bases his resarch on more than 200 actual consulting assignments, a database of 2,000 public companies, and the records of private equity (venture capital) firms. Zook's most important finding: It is your best performing businesses that are likely those furthest form their full potential! Thus, the best source of sustained growth is to strengthen the best among your businesses, and build on these winners to expand through logical and reinforcing adjacencies. To accomplish this, Zook offers a clearly conceived and easily understood framework, that is chockfull of practical advice, and refreshingly bare of catchy phrases and obfuscating lingo. Zook's exploration offers timeless reference points that managers can use in every business. Of course, this review is somewhat biased: my company has been a believer in adjacency strategies built around strong cores, and I have seen first hand how Zook's principles can reenergize a business, build management enthusiasm, and drive profitable growth. Impressively, Zook achieves the feat of condensing his findings and advice into 150 extremely well-written pages, delivering a concise reference book that every management strategist can (and should) carry in his briefcase as a constant companion.
Rating:
Summary: Without a Core, Chaos
Review: After a two-year study of the key strategic decisions that most often determine growth or stagnation in business, Zook (with Allen) realized that clients of Bain & Company were eager to share the results of that study. Only later did he decide to write this book, one in which he presents and then develops "a useful framework for understanding and addressing the key decision points encountered in growing a business." He concluded that this framework is practical and could be applied (with appropriate modification) within almost any organization. In the Preface, Zook acknowledges that he was surprised by some of the findings which he briefly identifies. He then observes: "Central to our findings are three ideas: the concept of the core business and its boundaries; the idea that every business has a level of full-potential performance that usually exceeds what the company imagines; and the idea that performance-yield loss occurs at many levels, from strategy to leadership to organizational capabilities to execution." In the five chapters which follow, Zook (with Allen) examines "the types of strategic business decisions that most often seem to tilt the odds of future success or failure." Zook correctly suggests in this book that many organizations cannot resist the appeal ("the siren's song") of "miracle cures" of their problems. Zook focuses entirely on what has been verified in real-world experience, on what is practical, and on what will reliably achieve the desired results of sound strategic decisions. He and his associates learned a great deal from the study, confiding that "some of the results were quite counterintuitive to us." Several of the findings caught my eye and caused me to challenge a few of my own cherished assumptions. For example, that "the choice of the next hot industry was much less important in driving growth and profitability over the long term than were strategy, competitive position, reinvesting rates, and execution." They also learned that many of the most successful sustained growth companies are actually in lower growth businesses (e.g. Enron in energy, ServiceMaster in basic services, and Bechtel in engineering). Why? Zook suggests that "it might be precisely the difficulty of of these market environments that elicits superior business creativity in the search for new growth out of their core businesses." In other words, these companies ignored "the siren's song" and stuck to the aforementioned "basics": strategy, competitive position, reinvesting rates, and execution. In the last chapter, Zook quotes Sun Tzu: "The more opportunities that I seize, the more opportunities that multiply before me." He then asserts that this phenomenon "is at the heart of growth strategy and embodies the fundamental tension between protecting the core [i.e. 'the basics'] and driving into more and better adjacencies, propelled by greater and greater success." The various mini-case studies provided are very informative. I also appreciative the dozens of check lists (e.g. "Ten Key Questions for Management"), charts (e.g. 3-1 "Adjacencies Radiate from the Core"), and chapter "Conclusion" sections, all of which serve two important functions: they distill key ideas, and, they can serve as helpful reminders when reviewed later. Obviously, the "goal posts" in today's business world approach and then withdraw, widen and then narrow, with sometimes maddening unpredictability. Wait until they are closer for an easier kick or kick now ("carpe diem") before they begin to back up? Wait until they are wider? What if they become narrower? This metaphorical situation is complicated by the fact that opponents are trying to block the kick in what may well be inclement weather or at least against the wind. Kick now or wait? One of the most interesting concepts shared in this book is what Zook refers to as "The Alexander Problem." Briefly, Alexander the Great and his armies eventually conquered an area stretching from Mount Olympus to Mount Everest. That was accomplished in less than four years. His resources became overextended. "His sticking point -- the failure to anchor in the core business (in his case, governance) and consolidate a rapid expansion --exemplifies the most common problem across all growth strategy": pursuing the wrong adjacency opportunities. With Alexander's premature death, his empire died with him. He was its core. The same is true of countless companies which expand into related segments which do not utilize, much less reinforce, the strength of their profitable core. "Business adjacencies are growth opportunities that follow a company to extend the boundaries of its core business. What distinguishes an adjacency from another growth opportunity is the extent to which it draws on the customer relationships, technologies, or skills in the core business to build competitive advantage in a new, adjacent, competitive area." Have you ever wondered why at least 70% of all mergers and acquisitions either fail or perform well below expectations? The board members and senior-level executives of those organizations obviously had not read Zook's analysis of "The Alexander Problem" in Chapter 3. Those who share my high regard for this book are urged to check out Crawford and Matthews' The Myth of Excellence, Fitz-enz's The E-Aligned Enterprise as well as The ROI of Human Capital, and Collins & Porras' Built to Last.
Rating:
Summary: Without a Core, Chaos
Review: After a two-year study of the key strategic decisions that most often determine growth or stagnation in business, Zook (with Allen) realized that clients of Bain & Company were eager to share the results of that study. Only later did he decide to write this book, one in which he presents and then develops "a useful framework for understanding and addressing the key decision points encountered in growing a business." He concluded that this framework is practical and could be applied (with appropriate modification) within almost any organization. In the Preface, Zook acknowledges that he was surprised by some of the findings which he briefly identifies. He then observes: "Central to our findings are three ideas: the concept of the core business and its boundaries; the idea that every business has a level of full-potential performance that usually exceeds what the company imagines; and the idea that performance-yield loss occurs at many levels, from strategy to leadership to organizational capabilities to execution." In the five chapters which follow, Zook (with Allen) examines "the types of strategic business decisions that most often seem to tilt the odds of future success or failure." Zook correctly suggests in this book that many organizations cannot resist the appeal ("the siren's song") of "miracle cures" of their problems. Zook focuses entirely on what has been verified in real-world experience, on what is practical, and on what will reliably achieve the desired results of sound strategic decisions. He and his associates learned a great deal from the study, confiding that "some of the results were quite counterintuitive to us." Several of the findings caught my eye and caused me to challenge a few of my own cherished assumptions. For example, that "the choice of the next hot industry was much less important in driving growth and profitability over the long term than were strategy, competitive position, reinvesting rates, and execution." They also learned that many of the most successful sustained growth companies are actually in lower growth businesses (e.g. Enron in energy, ServiceMaster in basic services, and Bechtel in engineering). Why? Zook suggests that "it might be precisely the difficulty of of these market environments that elicits superior business creativity in the search for new growth out of their core businesses." In other words, these companies ignored "the siren's song" and stuck to the aforementioned "basics": strategy, competitive position, reinvesting rates, and execution. In the last chapter, Zook quotes Sun Tzu: "The more opportunities that I seize, the more opportunities that multiply before me." He then asserts that this phenomenon "is at the heart of growth strategy and embodies the fundamental tension between protecting the core [i.e. 'the basics'] and driving into more and better adjacencies, propelled by greater and greater success." The various mini-case studies provided are very informative. I also appreciative the dozens of check lists (e.g. "Ten Key Questions for Management"), charts (e.g. 3-1 "Adjacencies Radiate from the Core"), and chapter "Conclusion" sections, all of which serve two important functions: they distill key ideas, and, they can serve as helpful reminders when reviewed later. Obviously, the "goal posts" in today's business world approach and then withdraw, widen and then narrow, with sometimes maddening unpredictability. Wait until they are closer for an easier kick or kick now ("carpe diem") before they begin to back up? Wait until they are wider? What if they become narrower? This metaphorical situation is complicated by the fact that opponents are trying to block the kick in what may well be inclement weather or at least against the wind. Kick now or wait? One of the most interesting concepts shared in this book is what Zook refers to as "The Alexander Problem." Briefly, Alexander the Great and his armies eventually conquered an area stretching from Mount Olympus to Mount Everest. That was accomplished in less than four years. His resources became overextended. "His sticking point -- the failure to anchor in the core business (in his case, governance) and consolidate a rapid expansion --exemplifies the most common problem across all growth strategy": pursuing the wrong adjacency opportunities. With Alexander's premature death, his empire died with him. He was its core. The same is true of countless companies which expand into related segments which do not utilize, much less reinforce, the strength of their profitable core. "Business adjacencies are growth opportunities that follow a company to extend the boundaries of its core business. What distinguishes an adjacency from another growth opportunity is the extent to which it draws on the customer relationships, technologies, or skills in the core business to build competitive advantage in a new, adjacent, competitive area." Have you ever wondered why at least 70% of all mergers and acquisitions either fail or perform well below expectations? The board members and senior-level executives of those organizations obviously had not read Zook's analysis of "The Alexander Problem" in Chapter 3. Those who share my high regard for this book are urged to check out Crawford and Matthews' The Myth of Excellence, Fitz-enz's The E-Aligned Enterprise as well as The ROI of Human Capital, and Collins & Porras' Built to Last.
Rating:
Summary: Vice President
Review: Anyone who is serious about growing their business profitably MUST read Profit to the Core. This "back to basics", well researched publication begins with what may seem as a surprising conclusion--it is very difficult for a business to achieve both sustained growth and sustained profit over a period of time. In fact, the research reveals that the large majority of businesses fail to reach these fundamental goals. Chris Zook carefully and clearly outlines how to define your core business and why it is important to stay focused to maximize the potential profits and growth from your core business. However, the author recognizes the absolute need to consider adjacent business opportunities to protect or expand your core business, despite the risk and management dilemma this creates. An excellent chart illustrates where adjacencies may exist and how to evaluate such opportunities. Most importantly, this book tells you not what to think but how to think about the ideas presented, allowing you to adapt and apply these concepts to your business.
Rating:
Summary: Profit for the Core for Non-Profiteers
Review: As a medical professional involved in management I am attracted on occasion to the business literature. I am grateful that this book caught my attention. Although medicine is a very different business from those thoroughly cited by Mr. Zook, the principles he raises up, supported by examples and data, are quite applicable to a the healthcare-provider world. This concise, lucidly presented book reminds me of the business leadership treatises from John Kotter. Like Kotter, Zook uses a thoughtful analysis of unique data sets and interviews with successful leaders and managers to make a sufficient, even compelling, argument for his premises. While it may be "common sense" to attend to the core, Mr. Zook establishes that in reality, all too often, the core is neglected and underperforms its potential. Most impressive is the rationale he provides for core growth, from expansion into adjacent opportunities to complete revision of the core itself. The need to nurture the core business while deliberately evolving the core, applies no less to a group medical practice than it does to a large multinational corporation. Perhaps for this reason there need never be a sequel entitled: "Non-profit from the Core." Indeed, it would seem to me that any "not-for-profit" whether a charity, a church, a hospital, or a school could enhance its longevity and advance its mission by incorporating the principles detailed in "Profit from the Core".
Rating:
Summary: CORE: A Must-Read for the Organizationally challenged
Review: Business intelligence is often opaque, but Chris Zook has cracked the code. He may not be John Grisham, but the book is every bit as captivating if you're trying to make sense of conflicting business models for this not-so-hot, new economy. Whether you're selling fritos, razor blades or bandwidth, Chapter 3 --the Alexander Problem -- should be required reading for any manager asked to find the next great market option. Thanks to Bain & CO for opening up the archives. There are pearls of wisdom from beginning to end. Zook's easy going style makes it a sure winner.
Rating:
Summary: CORE: A Must-Read for the Organizationally challenged
Review: Business intelligence is often opaque, but Chris Zook has cracked the code. He may not be John Grisham, but the book is every bit as captivating if you're trying to make sense of conflicting business models for this not-so-hot, new economy. Whether you're selling fritos, razor blades or bandwidth, Chapter 3 --the Alexander Problem -- should be required reading for any manager asked to find the next great market option. Thanks to Bain & CO for opening up the archives. There are pearls of wisdom from beginning to end. Zook's easy going style makes it a sure winner.
Rating:
Summary: Corporate leaders need a reality check!
Review: Chris Zook thinks it's time for corporate leaders to get a big fat reality check on their dreams of continual, double-digit growth. He argues that the mindset that has developed around growth projections is totally unrealistic for most companies -- even considering the past decade of strong, economic expansion -- and he has numbers to prove it. After examining the performance of close to 2,000 companies betweem 1988 and 1998, Mr. Zook found that only one in eight, or 13 per cent, managed to meet even modest growth targets. If you don't understand and protect your core, you can't possibly select the right growth initiatives. If you select wrong, you face a double-whammy of wasting resources and leaving the true core undefended. This happens to start-ups and large corporations, to the weak and even more to the strong. Looking at the odds, it is probably happening to your business. An excellent book!
Rating:
Summary: The voice of reason in a time of turbulence.
Review: Chris Zook's, Profit From The Core couldn't have come at a better time. With the recent dot-com implosion, it seems almost perfect to say "I told you so," but that is not what these authors had in mind. This book presents a clear case for focus and mining a business' true core to establish long-term growth. The authors illustrate how, time and again, sustained value and long-term growth come from steadfast focus, rather than a wide-net approach to business strategy. It's pretty clear to me that any survivors over the past year will have adhered to this axiom. Profit from the Core's common-sense approach to building a business is backed with meaningful, quantitative data. One idea, originally stated in Sun Tzu's Art of War, struck a particular cord with me: "The more opportunities that I seize, the more opportunities that multiply before me." Zook and Allen have added the following insight: "Success multiplies opportunities. Proliferating opportunities complicate decision making and prioritization (a good problem to have) and therefore risk." This challenge was clearly exhibited in the Internet consultancy market when many new startups and market leaders "lost their heads" in the crazy days of 1998 and 1999. While the opportunities were seemingly endless, companies that did not pursue a focused and logical path toward growth decreased their shareholder value, or, even worse, risked bankruptcy. Profit From The Core presents an encouraging outlook on developing business strategy. Presented in a no-nonsense manner with solid data, the main concepts are based on common sense and easily applicable to business situations. I think most people will execute an adjacency mapping (which graphs how a company expands from its core) of their own business after they complete the book. This empirical approach will certainly prove helpful to an untold number of businesses. Michael Knowlton CEO / Nascent State
Rating:
Summary: Results from a research study that rings true !
Review: During the time of "Irrational Exuberance", just before the time when dot-coms became dot-bombs, a joke on the street was that there were just three types of firms during the period. These were: the "business-type" firm (eg. too numerous to mention) who didn't care about the "technology", the "technology-type" firm (eg. Lucent)that didn't care about the "business" but then there were the "graphic-design" firms (aka web-design, brand makers, marketing image, marketing communications..., ad absurdum, eg. Razorfish) who didn't care about the "business" nor the "technology", as long as it "LOOKED GOOD". This book sheds the light on similar firms and the lessons learned. Checked Lucent's or Razorfish's stock performance lately ?
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