Saturday, December 24, 2011

Book Review: Escape Velocity

This was one of my favorite business books of the year. I've been a disciple of Geoffrey Moore ever since reading Crossing the Chasm and the fantastic Inside the Tornado. Moore is skilled at distilling complex machinations of markets and organizations, getting them down to their fundamental systems, and then explaining those in crystal clear form.

In Escape Velocity: Free Your Company's Future from the Pull of the Past, he turns his attention to the question of why companies are unable to innovate, arguing that a major factor is their being trapped by the pull of their past and current product efforts. He argues that the way budgeting & planning work at most large organizations, headcount & spending are allocated among existing efforts first, and that afterward anything left for innovating in new areas is meager at best. Having worked at a couple such companies, I was struck by how accurately he portrayed the details of this process and problem.

Moore goes on to propose a framework for tackling this problem in four parts.

First, he describes this budgeting dilemma and proposes that the key areas for innovation, once identified, get planned for outside of the rest of the budget planning process, and that the company make highly assymetrical bets on these in order to acheive 'escape velocity'.

Next he provides a framework for identifying company and competitor areas of strength in a hierarchy of domains of category power, company power, market power, offer power. I found this framework useful for discussion of competitor offerings. He makes the case that your breakthrough will come from focusing on a key differentiator in one of these domains, and identifying which is key.

He then goes on to provide a really useful model for categorizing types of innovation, breaking things into differentiation vs neutralization (innovation efforts in matching competitor offerings) vs efficiency vs waste (innovation efforts spend in areas that won't be leveraged or that don't align with the one area you've picked to differentiate). This framework too, I found really useful, and intend to employ it at work.

Finally, he presents a well structured blueprint for how to go put all this into action. He does so for both volume-operation vs service-oriented businesses (the tactics are different for each). His model suggests that there are three key phases for these efforts (invention, deployment, and optimization), and that the efforts for each should be handled by completely different management teams with different skill sets. He also outlines the structure for a transition team and process to move the product efforts between these three phases.

Throughout the whole book there are many, many case examples, and I liked that - with one exception - he called upon himself to avoid the temptation of using Apple in case examples (too easy).

Moore has an uncanny ability for structuring order out of the chaos that exists in high tech business. This is a masterwork, and a must-read for anyone in management or planning at any company of a few hundred employees or greater. However, even those other roles or at small companies will, I think they'll get a lot out of the framework tools for evaluating their place in the market, or their competitors. I highly recommend this book.

Escape Velocity: Free Your Company's Future from the Pull of the Past

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