The Death of Competition: Leadership and Strategy in the Age of Business Ecosystems

Rating:
Summary: A new way of thinking about business. - An important book
Review: In The Death of Competition, James Moore asks us to reconsider the way we think about business at the most basic level. In this thought provoking analysis, Moore takes us from the Hawaiian Islands to the jungles of Costa Rica, and from war torn Mogadishu to the boardrooms of Wal-Mart and Intel. Clearly this is a book that goes far beyond the standard boundaries of a "business" book.

Moore tells us that we need to consider our business as being part of an "ecosystem". Whereas the value chain would encompass suppliers and distributors, the ecosystem is much broader. Members of the ecosystem may sell complimentary products, after sales services, or other products and services that are vital to the overall customer experience. Even when considering the members of the value chain, Moore tells us to think in terms of the ecosystem, and look for ways of making the connections deeper, stronger, and more to our advantage. Among other examples, Moore shows us how Wal-Mart, by forging relationships with suppliers that are much closer than the classic manufacturer-retailer relationship, has positioned itself at the center of an ecosystem that is stable and strong. In another section, he compares the way that Intel fostered an ecosystem around the Pentium line of microprocessors, and how the diversity and strength of this ecosystem kept other "ecosystems" such as Apple and Next, from encroaching. He also showed how Apple made it more difficult for other members of its ecosystem to co-evolve, making the entire Apple centered ecosystem weaker.

The central theme of the book is that business ecosystems, like biological ecosystems, evolve. Each of these evolutionary stages brings both opportunities and threats, and the businesses within ecosystems need to understand both the status of the ecosystem they are in, and their role in it, or they risk extinction.

First, Moore compares ecosystems in Hawaii and Costa Rica, showing how an isolated and protected ecosystem, such as Hawaii, can give rise to a rich and diverse ecosystem, but one that is fragile and easily overwhelmed by invading species. By comparison, the ecosystem of the Costa Rican jungle, on the bridge between North and South America, gives rise to species that have had to protect their niches from invaders on a regular basis, the result is a hardier, more robust ecosystem.

Having established the metaphor, Moore takes us through the four stages of ecosystem evolution: pioneering, growth, maturation, and renewal or death. First, he traces the history of the automotive industry ecosystems through all four stages, then he presents an in depth case study for each stage. The case studies are rich, diverse, and fascinating, ranging from the creation of a telephone system in Mogadishu to the prospects for health care in the U.S. Throughout the case studies Moore shows how decisions are made, and the effects of those decisions. In some of the most interesting analyses of the book, Moore examines the 7 "dimensions" of the ecosystem (customers, market, offers, processes, organizations, stakeholders, and values and policy) and shows how each of the dimensions evolve as the ecosystem evolves. He also shows us how to tell which stage of ecosystem evolution we are in, and what the critical success factors for each stage.

One of the most interesting, and surprising aspects of the book was Moore's emphasis on social responsibility, particularly for leading companies. An example of this emphasis is seen in the chapter on Wal-Mart. Moore notes that in many communities, Wal-Mart has completely displaced other retailers, and has done so in such an effective manner that there is no room for alternatives to enter the space. This strategy of "space packing" behind secure boundaries, has allowed Wal-Mart to grow into a huge organization and stable ecosystem. At the same time, Moore notes that this strategy leaves communities vulnerable to Wal-Mart, and hence opens Wal-Mart to a greater level of scrutiny than most other businesses. "In short, Wal-Mart is not just another business within its environment, and it should not expect to be treated as one. Perhaps the largest managerial challenge facing Wal-Mart today is how to invest in the relationship building, the public campaigning, and the substantive policy studies to assume its role as a leader of communities." Wow! Not just a business, but a leader of communities.

Moore carries this idea further in the final chapter, as he asks us first to think about our personal "ecosystems", and then to put the business ecosystem into a wider context. Moore states "As you invest in your own personal learning system and begin to experience problems more holistically,... a shift occurs in your perspective." First, he asks us to consider how "business is totally dependent on society", and how the "changing tides in a society" create the environment in which business operates. Next, he asks us to consider economic systems as subsystems of biological systems. After all, if all economic systems were eliminated, biological systems would still exist, but if the biological system were eliminated, the economic systems would not last very long. The upshot of this line of thought is that business needs to consider the impact it has as a business ecosystem interacts with and sometimes clashes with societal and biological ecosystems.

And it was here, in these final thoughts that Moore impressed me the most, and showed how this book is broader in scope, and more important than most other business books. No, this book won't tell you how to get new customers tomorrow, how to beat your competition or squeeze more productivity out of your employees. All this book will do is ask you to reconsider everything you thought about business and its place in society. That, I would say makes this book one of the most important books you could read.

Rating:
Summary: A new way of thinking about business. - An important book
Review: In The Death of Competition, James Moore asks us to reconsider the way we think about business at the most basic level. In this thought provoking analysis, Moore takes us from the Hawaiian Islands to the jungles of Costa Rica, and from war torn Mogadishu to the boardrooms of Wal-Mart and Intel. Clearly this is a book that goes far beyond the standard boundaries of a "business" book.

Moore tells us that we need to consider our business as being part of an "ecosystem". Whereas the value chain would encompass suppliers and distributors, the ecosystem is much broader. Members of the ecosystem may sell complimentary products, after sales services, or other products and services that are vital to the overall customer experience. Even when considering the members of the value chain, Moore tells us to think in terms of the ecosystem, and look for ways of making the connections deeper, stronger, and more to our advantage. Among other examples, Moore shows us how Wal-Mart, by forging relationships with suppliers that are much closer than the classic manufacturer-retailer relationship, has positioned itself at the center of an ecosystem that is stable and strong. In another section, he compares the way that Intel fostered an ecosystem around the Pentium line of microprocessors, and how the diversity and strength of this ecosystem kept other "ecosystems" such as Apple and Next, from encroaching. He also showed how Apple made it more difficult for other members of its ecosystem to co-evolve, making the entire Apple centered ecosystem weaker.

The central theme of the book is that business ecosystems, like biological ecosystems, evolve. Each of these evolutionary stages brings both opportunities and threats, and the businesses within ecosystems need to understand both the status of the ecosystem they are in, and their role in it, or they risk extinction.

First, Moore compares ecosystems in Hawaii and Costa Rica, showing how an isolated and protected ecosystem, such as Hawaii, can give rise to a rich and diverse ecosystem, but one that is fragile and easily overwhelmed by invading species. By comparison, the ecosystem of the Costa Rican jungle, on the bridge between North and South America, gives rise to species that have had to protect their niches from invaders on a regular basis, the result is a hardier, more robust ecosystem.

Having established the metaphor, Moore takes us through the four stages of ecosystem evolution: pioneering, growth, maturation, and renewal or death. First, he traces the history of the automotive industry ecosystems through all four stages, then he presents an in depth case study for each stage. The case studies are rich, diverse, and fascinating, ranging from the creation of a telephone system in Mogadishu to the prospects for health care in the U.S. Throughout the case studies Moore shows how decisions are made, and the effects of those decisions. In some of the most interesting analyses of the book, Moore examines the 7 "dimensions" of the ecosystem (customers, market, offers, processes, organizations, stakeholders, and values and policy) and shows how each of the dimensions evolve as the ecosystem evolves. He also shows us how to tell which stage of ecosystem evolution we are in, and what the critical success factors for each stage.

One of the most interesting, and surprising aspects of the book was Moore's emphasis on social responsibility, particularly for leading companies. An example of this emphasis is seen in the chapter on Wal-Mart. Moore notes that in many communities, Wal-Mart has completely displaced other retailers, and has done so in such an effective manner that there is no room for alternatives to enter the space. This strategy of "space packing" behind secure boundaries, has allowed Wal-Mart to grow into a huge organization and stable ecosystem. At the same time, Moore notes that this strategy leaves communities vulnerable to Wal-Mart, and hence opens Wal-Mart to a greater level of scrutiny than most other businesses. "In short, Wal-Mart is not just another business within its environment, and it should not expect to be treated as one. Perhaps the largest managerial challenge facing Wal-Mart today is how to invest in the relationship building, the public campaigning, and the substantive policy studies to assume its role as a leader of communities." Wow! Not just a business, but a leader of communities.

Moore carries this idea further in the final chapter, as he asks us first to think about our personal "ecosystems", and then to put the business ecosystem into a wider context. Moore states "As you invest in your own personal learning system and begin to experience problems more holistically,... a shift occurs in your perspective." First, he asks us to consider how "business is totally dependent on society", and how the "changing tides in a society" create the environment in which business operates. Next, he asks us to consider economic systems as subsystems of biological systems. After all, if all economic systems were eliminated, biological systems would still exist, but if the biological system were eliminated, the economic systems would not last very long. The upshot of this line of thought is that business needs to consider the impact it has as a business ecosystem interacts with and sometimes clashes with societal and biological ecosystems.

And it was here, in these final thoughts that Moore impressed me the most, and showed how this book is broader in scope, and more important than most other business books. No, this book won't tell you how to get new customers tomorrow, how to beat your competition or squeeze more productivity out of your employees. All this book will do is ask you to reconsider everything you thought about business and its place in society. That, I would say makes this book one of the most important books you could read.

Rating:
Summary: Business and leadership strategy for a fluid environment.
Review: Moore uses the metaphor of a "business ecosystem" to make sense of our complex and chaotic business landscape. He demonstrates how managers who think about "coevolving" with customers and suppliers can shape and capitalize on the rich opportunities that fluid business environments afford. Complete with analytical tools, illustrative case studies, and inspiring sections on leadership, this book could push the idea of alliance-based competition into widespread practice

Rating:
Summary: The book the convergence business is actually reading
Review: The ecosystem approach to analyzing industries described by Moore is powerful. My friends managing high tech companies have used Moore's concepts and approachs to great success, particularly in changing and converging environments. Companies must learn to co-evolve and cooperate. This book tells you how.

Rating:
Summary: Leadership is as important as strategy
Review: This book illustrates that leadership, like good ideas are lasting. I am encouraged that the ideas about leadership that Jim Moore is presenting have the staying power to make it into the hands of our leaders. As a college professor, I was very impressed when Vice President Al Gore recently referred to this book as an example of business leadership and the American pioneering spirit. The comparisson to the pioneering aspect of the Internet and todays business transition is very appropriate. After listening to Al Gore and reading the book, I think that he actually read it. Normally politicians will only refer to something on the best seller list and employ superficial quotes from the most recent Sunday paper promos.

After reading this book, I found it to be thoughtfull, clear and more appropriate today than when it was originally published.

This book is worth the read for non-business and business leaders alike. I hope other leaders read this book as well.