The best defense, we are told, is a good offense, and never has that been more true, says Lee Tom Perry, than in today's today's business climate.
Competitive business strategy in the 1980s, particularly as espoused by influential author Michael Porter, was spurred by the idea that companies should take the path of least resistance: Find uncrowded niches and then develop products and services that had little direct competition.Perhaps that defensive strategy made sense in the '80s, perhaps not, but Perry, a Brigham Young University professor, makes clear in his new book that it has no place in the '90s.
In "Offensive Strategy - Forging a New Competitiveness in the Fires of Head-To-Head Competition," (Harper Business $24.95) Perry, associate professor at the Marriott School of Management and consultant to a number of major U.S. corporations, offers three recommendations for managers to transform their defensive strategies of the '80s into offensive strategies of the '90s:
- Engage in direct competition against world-class competitors.
- Keep strategies simple to harness the energy of the anthill. Simple strategies encourage people at all organizational levels to become strategic thinkers and implementers.
- Create liberating organizational forms. Competition provides a wonderful discipline to organizations when it is viewed as an opportunity to learn and achieve.
Rather than trying to achieve stable and profitable industry equilibrium, Perry, who holds a Ph.D. in Administrative Sciences from Yale University, says companies must create world-class competitive leadership by strengthening themselves internally and then competing against the best.
Perry says he began thinking about why the Japanese have been so successful as global competitors when, in 1986, he read David Hal-berstam's book "The Reckoning" that charted the rise of Japanese auto builder Nissan and the corresponding fall of America's Ford Motor Co.
Japan prevailed, says Perry, because its industries were forged in the intense competition following World War II when hundreds of new Japanese companies fought to survive at home and create new markets abroad.
America faltered because the war that allowed Japan to become a "seed bed for developing new management ideas" created a complacent, non-competitive environment for U.S. companies.
Calvin Coolidge said "The business of America is business," but that slogan has sounded rather hollow in recent years. Now, says Perry, at the beginning of a new decade, American managers are talking about turning their companies around.
"But if American companies are to show the world that business is still America's business, they must divest themselves of their outmoded competitive strategies . . . The purpose of book is to help American companies become competitive leaders (that) compete head-to-head against world-class competitors and lead their industries."
Perry has identified three strategies that he believes U.S. business must adopt to regain its competitive standing. If companies are "opportunistic," "visionary" and "capitalistic," they will prevail.
OPPORTUNISTS, he explained, gain competitive leadership by developing new business opportunities. Their actions are guided by opportunities that generate a continuous flow of entrepreneurial activity. Opportunists remain competitive leaders only by continuing to generate new business opportunities.
VISIONARIES use technology as the key element in their offensive strategy. They pursue visionary offensive strategies that promote fundamental change: they either create new industries or redefine existing ones. Visionaries play off a core vision and must have nobility and purpose.
CAPITALISTS combine aspects of both opportunists and visionaries. They become competitive leaders by serving as models of the world's most effectively run organizations and most successful developers of top-flight management talent. When effective, they are distinctive, excellent companies run by satisfied and motivated work forces.
Perry lives in Provo with his wife Carolyn and their five children. He is the son of L. Tom Perry, a member of the Council of the Twelve, The Church of Jesus Christ of Latter-day Saints.
"Offensive Strategy" is available at Deseret Book. The publisher said it will soon be available at leading chain bookstores.