Time—The Next Source of Competitive Advantage

The ways leading companies manage time—in production, in new product development and introduction, in sales and distribution—represent the most powerful new sources of competitive advantage.

Editor’s Note: This is a classic HBR article that was assigned reading when I was a student. It has held up pretty well 35 years on.

4 Types of Employee Complaints — and How to Respond

Complaining can have both positive and negative effects on organizational communication. Constructive complaining — or structured opportunities for employees to voice their concerns — offers valuable feedback to improve work processes, products, and services, and thus should be encouraged. Venting and chronic complaining have both advantages and disadvantages for the individual and the group and should be given the right space and time, rather than … [ Read more ]

George Stalk, Jr.

At most companies, strategic choices are limited to three options:

  1. Seeking coexistence with competitors. This choice is seldom stable, since competitors refuse to cooperate and stay put.
  2. Retreating in the face of competitors. Many companies choose this course; the business press fills its pages with accounts of companies retreating by consolidating plants, focusing their operations, out-sourcing, divesting businesses, pulling out of markets, or moving upscale.
  3. Attacking, either

[ Read more ]

George Stalk, Jr.

In manufacturing, costs fall into two categories: those that respond to volume or scale and those that are driven by variety. Scale-related costs decline as volume increases, usually falling 15% to 25% per unit each time volume doubles. Variety-related costs, on the other hand, reflect the costs of complexity in manufacturing: setup, materials handling, inventory, and many of the overhead costs of a factory. In … [ Read more ]

George Stalk, Jr.

Today’s new-generation companies compete with flexible manufacturing and rapid-response systems, expanding variety and increasing innovation. A company that builds its strategy on this cycle is a more powerful competitor than one with a traditional strategy based on low wages, scale, or focus. These older, cost-based strategies require managers to do whatever is necessary to drive down costs: move production to or source from a low-wage … [ Read more ]

George Stalk, Jr.

While time is a basic business performance variable, management seldom monitors its consumption explicitly—almost never with the same precision accorded sales and costs. Yet time is a more critical competitive yardstick than traditional financial measurements.

George Stalk, Jr.

Avoiding price competition by moving into higher margin products is called margin retreat—a common response to stepped-up competition that eventually leads to corporate suicide. As a company retreats, its costs rise as do its prices, thus “subsidizing” an aggressive competitor’s expansion into the vacated position. The retreating company’s revenue base stops growing and may eventually shrink to the point where it can no longer support … [ Read more ]

How to Answer “What Are Your Salary Expectations?”

There are many interview questions that inspire dread in an interviewee — from “What’s your greatest weakness?” to “Tell me about yourself.” But one in particular is especially complicated: “What are your salary expectations?” If you go too low, you might end up making less than they’re willing to pay. But if you go too high, you could price yourself out of the job. In … [ Read more ]

Stop Making the Business Case for Diversity

Eighty percent of Fortune 500 companies explain their interest in diversity by making some form of a business case: justifying diversity in the workplace on the grounds that it benefits companies’ bottom line. And yet, in a recent study, the authors found that this approach actually makes underrepresented job candidates a lot less interested in working with an organization. This is because rhetoric that makes … [ Read more ]

How to Move from Strategy to Execution

Three out of every five companies rate their organization as weak on strategy execution. When you dig into the potential barriers to implementation, there is a general lack of understanding of the various factors at play, resulting in the inevitable managerial justifications — “poor leadership,” “inadequate talent,” “lack of process excellence,” etc. This article suggests three key steps to build the right execution system: 1) … [ Read more ]

Design Your Organization to Match Your Strategy

An organization is nothing more than a living embodiment of a strategy. That means its “organizational hardware” (i.e., structures, processes, technologies, and governance) and its “organizational software” (i.e., values, norms, culture, leadership, and employee skills and aspirations) must be designed exclusively in the service of a specific strategy. Research suggests that only 10% of organizations are successful at aligning their strategy with their organization design. … [ Read more ]

Stephen Bungay

The purpose of structure is to distribute decision-rights in a rational way. A good structure reflects the hierarchy of the main tasks the organization has to carry out, and there is clear accountability for decision-making at each level. Good processes ensure that everyone knows how the organization works, so that they can devote their energies to dealing with the chaos on the outside. To deal … [ Read more ]

Stephen Bungay

Leading and managing do not describe the activities of different people, but are different roles carried out by the same people. All executives have both to manage resources judiciously and to lead their people to motivate them. Some are better at one than the other, but every organization needs both.

Stephen Bungay

Businesses … should use the information … measures provide wisely. But they should not mistake the measures for wisdom. Creating a strategy is about setting direction. A set of measures is a just control system that helps you to understand whether or not you are heading in the direction you set.

Stephen Bungay

In science the key question is, “Is it true?” In management the key question is “Does it work?” Here, context is critical. Many of the ideas developed by management thinkers are helpful in a particular context. The problem comes when these ideas start being treated as if they were universal truths. It is then that they turn into myths, and myths can lead us astray. … [ Read more ]

Rethink Your Employee Value Proposition

A lot of leaders believe that the formula for attracting and keeping talent is simple: Just ask people what they want and give it to them. The problem is, that approach tends to address only the material aspects of jobs that are top of employees’ minds at the moment, like pay or flexibility. And those offerings are easy for rivals to imitate and have the … [ Read more ]

You Don’t Like Your New Boss. What Should You Do?

Starting a new job always comes with a few unexpected challenges. One that is especially hard to navigate is a strained relationship with your new boss. What should you do if you realize you’re just not getting along? Start by diagnosing the problem. In this piece, the author lists a few reasons why there might be tension and offers advice for how to mitigate the … [ Read more ]

3 Lessons from Hyperinflationary Periods

Inflation is painful, for firms, customers, employees, and society. But careful study of periods of “hyperinflation” point to ways that firms can adapt. In particular, companies need to think about how to change prices regularly and cheaply — because constant price changes can ultimately be very, very expensive. And they should consider how to communicate those price changes to customers. Providing clarity and predictability can … [ Read more ]

38 Smart Questions to Ask in a Job Interview

The opportunity to ask questions at the end of a job interview is one you don’t want to waste. It’s both a chance to continue to prove yourself and to find out whether a position is the right fit for you. In this piece, the author lists sample questions recommended by two career experts and divides them up by category: from how to learn more … [ Read more ]

4 Types of Innovators Every Organization Needs

Every company strives to be innovative, but most are missing key ingredients. How can you identify which ingredients your organization needs — and which employee styles can fill in the gaps? The authors’ research distills four key innovation styles that can lead to success — generators, conceptualizers, optimizers, and implementors — and explains how common they are across sectors. Then, they outline a four-part framework … [ Read more ]