Business Book Review: Boston Consulting Group On Strategy

Welcome to yet another opportunity to gain valuable insights from a book review, written by Preeti Vemu, MC intern, MC events organizer extraordinaire, and an ex-Deloitte consultant. Enjoy!

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Boston Consulting Group on Strategy is a compilation of 82 valuable articles called Perspectives, 4 Harvard-reviewed business articles and 8 other articles written by various members of The Boston Consulting group between 1968 to 2005. These Perspectives are the concise pieces designed to stimulate senior management on various business issues put together by several Consultants, including the founder of Boston Consulting Group, Bruce Henderson.

WHY READ IT?

In today’s business world, the term “strategy” is often thrown around with reckless abandon, even though most who use it don’t really know what it means. The fact is that high-level strategy – combined with proper execution of said strategy – has the power to turn a failing business’ fortunes around or propel an already successful business into an entirely new stratosphere.

The Boston Consulting Group is one of the top 3 strategy consulting firms in the world, so when they talk about strategy, you’d be unwise not to take them seriously.

QUICK OVERVIEW

In this book, you will find more articles than you can stomach – awesome articles capturing key insights from the 1960s and moving forward to 2005. Every section of Boston Consulting Group on Strategy is a comprehensive article offering insights that can be applied to any business circumstance. It’s a must-read for aspiring consultants, practicing consultants, entrepreneurs and anyone else in between. If you are someone who is not easily thrilled by general information but would rather dig deep for treasures like the Indiana Jones of business, this is a must read, trust me (I am an ex-Deloitte consultant, after all).

Back in the day when competing was all about who was selling the most, BCG took the road unknown – the strategy route. It’s the very thing that set them apart in the consulting domain – they approached complex business cases through business ideas, innovative strategy, and strategic competition (strategic competition introduced to the hood in 1980s).

INTERESTING BOOK INSIGHTS

Boston Consulting Group on Strategy offers a broad and up-to-date selection of the firm’s best ideas on strategy – but if you’re hoping it will transform your business life overnight, it won’t. Every article has profound information on a case-to-case basis for the time this book was written which was in 2006 and for the progress in the business world back until then. As good as the articles were when they were written, by the time this book came out in 2012 the consulting world had already adopted pretty much everything Henderson was talking about. Instead of being an inspiring read that espoused previously unheard of concepts, it feels more more like looking through the history books and reminiscing on paths tread by great pioneers.

Nonetheless, here are some of the highlights from this book:

Strategic Competition vs. Natural Competition is very elaborately explained by Bruce Henderson. He compares strategy to geopolitical and military scenarios. Competition is not just about being aware of the enemies in the marketplace. It’s the strategy used that changes the course of natural competition. Most of us business-minded individuals understand natural competition, which is good, but by itself, it’s not enough to set your company apart in a few short years among the competitive piranhas. Bruce introduced strategic competition in 1980s to the market and it has since transformed business productivity and has the same impact that the industrial revolution had on individual productivity. Natural Competition is evolutionary and Strategic Competition is revolutionary.

The Experience Curve was introduced in the 1960s and 1970s by Bruce Henderson. A compilation of business cases that used the Experience Curve and the impact this had on the BCG team are highlighted in this book – it enabled them to resolve their client’s complex business problems. It was not necessarily the Experience Curve itself that was noteworthy, it was the implications that were truly revolutionary. The Experience Curve is a universally observable phenomenon, as it is a more accurate representation than any accounting model. The focus here is completely on cash flows and not projections.

Time – The Next Source of Competitive Advantage lays out the importance of time in planning, manufacturing, execution and delivery to clients. Though this perspective was first written in 1988, it is a good historical record as it shows the link between time utilization and sales. Time is such a precious commodity – if it isn’t used to the max, it will have a drastically negative impact on your business.

Excellent historical case references from companies like Toyota, Mitsubishi, Atlas Door, Walmart vs. Kmart and much more on product development, Innovation, manufacturing, time management techniques and strategies that have made them leaders in their industry.

OVERALL SUMMARY & CONCLUSION

If you are a student who enjoys discovering the secrets to business success, you will love this book. Why? Let me tell you:

Strategic competition leads to time compression – This is a great concept as it shows how vital it is for businesses to stay ahead of the competition. Strategic competition is the answer.

Time-based innovation (now this is meaty stuff) –  If you are a business owner or working for a manufacturing set up or just a pure business nerd, this section will be most helpful. You get to see what would happen if you could churn up new products 3X faster than your competitors. That’s exactly what Japanese manufacturers did to their U.S. competition. Mitsubishi transformed its air conditioner. The strategy they adopted came incrementally and steadily, which resulted in them being 10 years ahead of their U.S. competition. Ultimately, U.S. air conditioner manufacturers sourced its air conditioners and components from its Japanese competition – that’s a game changer right there!

Just-in-time company success stories – For students majoring in business, this concept is quite famous in college text books, but to read it from one of the classics its a whole new experience. It’s like a ‘Wing special’ – it’s not new, and you’ve heard it before, but always manages to stir up an appetite. Every time a business lover hears about just-in-time or lean manufacturing – brilliant success stories are shared and learned from. It’s a tasty deal (ahem, read), I’d say.

Cash Flow of a Product – It’s an excellent study on rules of cash flow if you’d like to know more on the performance of products and the effect it has on sales at each stage in production. This study will clear up many of those fundamental mis-understandings related to product-based segmentation.

Companies are systems, time connects all parts – The most powerful competitors understand this axiom and come up with cutting-edge solutions for the world.

This book is rich with historical records, juicy business cases, ingenious innovations and problem-solving techniques. Moreover, it’s a look through the eyes of consulting pioneers.

If you are looking for a new concept or new formula for success, sorry – this is not the book for you. It also will not become your new reference guide for strategy – it’s not that accessible written in its case style. If, however, you want to learn about BCG in a whole new way, all the while growing in admiration of BCG’s impressive feats, this is the book for you!

And yes – anyone interested in consulting should read Boston Consulting Group on Strategy at least once. Enjoy!