It doesn't matter much where your company sits in its industry ecosystem, nor how vertically or horizontally integrated it is - what matters is its relative 'share of customer value' in the final product or solution, and its cost of producing that value.
Interpretation
The location of a company within its industry is less important than how much value it provides to customers and how efficiently it can produce that value.
Gary Hamel emphasizes that a company's position within its industry and its level of integration are secondary to its ability to deliver value to customers and manage production costs effectively. This perspective challenges traditional views of business success, urging companies to focus on the quality and cost-effectiveness of their offerings rather than their relative industry status.
In practice
During a conference on entrepreneurship, this quote can be used to motivate startups to focus on customer satisfaction.
The real damper on employee engagement is the soggy, cold blanket of centralized authority. In most companies, power cascades downwards from the CEO. Not only are employees disenfranchised from most policy decisions, they lack even the power to rebel against egocentric and tyrannical supervisors.
The biggest barriers to strategic renewal are almost always top management's unexamined beliefs.
To create an organization that's adaptable and innovative, people need the freedom to challenge precedent, to 'waste' time, to go outside of channels, to experiment, to take risks and to follow their passions.
If customer ignorance is a profit centre for you, you're in trouble.
The single biggest reason companies fail is they overinvest in what is, as opposed to what might be.
The only thing that can be safely predicted is that sometime soon your organization will be challenged to change in ways for which it has no precedent.
Explore this next great frontier where the boundaries between work and higher purpose are merging into one, where doing good really is good for business.
Competition should not be for a share of the market-but to expand the market.
One customer well taken care of could be more valuable than $10,000 worth of advertising.
If your startup is only in the development or idea stage, there is almost no better predictor of failure - I mean, utter failure, scorched-earth bankruptcy - than raising too much money in the first round.
Values-based business behavior is no longer simply an interesting option - it's crucial to your survival. Once you understand your mission and values, you have a strong basis for evaluating your practices and aligning them accordingly.
Cutting prices or putting things on sale is not sustainable business strategy. The other side of it is that you can't cut enough costs to save your way to prosperity.
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