High Performance Companies (Hardcover)

Foreword xi

Preface xiii

Acknowledgments xv

1 My Motivations 1

Introduction and Positioning 1

Seven Concerns Raised by the Content and Approach of Other Books 6

A Book on Strategic Principles: The Idea 11

Approach of the Book 11

Organization of the Book 13

The Final Word 15

2 Discover Diamonds among Coals 19

Resources, Firm Strategy, and Performance 19

Acquisitions Fitting the “Discover-Diamonds-among-Coals” Adage 22

Mittal Steel: Discovering Diamonds among Coals—Consistently! 25

Building a Global Empire through Acquisitions 27

The Recipe for Success 29

How Mittal Polishes Raw Diamonds 34

The Final Word 37

3 Build Durable Assets 45

Durable Assets and Performance 45

Tiger Balm: Durable Assets Withstand Twenty Years of Neglect 52

Pawning the Family Heirloom 55

Restoring the Tiger Balm’s Roar through Investments in Durable Assets 56

The Recipe for Success 58

The Tiger Balm Case and Its Implications for a Strategy Based on Durable Assets 59

The Final Word 61

4 Focus on Small Wins 69

Big Hits, Big Flops, and Their Performance Implications 69

Small Wins: An Alternative Route to Superior Performance? 72

YKK’s Small Wins Lead to Market Dominance 73

The Lincoln Electric Company’s Small- Wins- Based Strategy 76

Illinois Tool Works: Scoring Big with Numerous Small Wins 80

The Four Cornerstones of ITW’s Strategy 81

The Final Word 89

5 Integrate to Innovate 97

The Importance of Innovation 97

Innovation Strategies 99

Innovation through Integration 101

SAS Institute: The Consummate “Integrator” 102

Fanuc: Industry Dominance through Integration and Innovation 107

Integration of External Knowledge at Fanuc 110

Internal Integration at Fanuc 113

The Final Word 114

6 Advance (Strategically and Competitively) During a Crisis 121

Crises as Common Events 121

Top Managers and Crises 123

The Tylenol Crisis and Johnson & Johnson 124

Toyota Fumbles 127

Singapore Airlines (SIA): Proactive Management of Crises 133

SIA’s Response to the East Asian Economic Crisis 133

The SQ 006 Crash in Taiwan and SIA’s Response 135

The Final Word 140

7 Beware of the Incremental (Strategic Change)! 149

Importance of Strategic Change and Its Performance Implications 149

Mixed Performance Outcomes of Strategic Changes at Starbucks and McDonald’s 151

Strategic Changes and Their Performance Implications at Tupperware 156

Tupperware’s Social Impact and Performance 156

The Beginnings 158

The Growth Years 159

Innovative Business Model 159

Strategic Changes 161

Putting the Strategic Changes and Their Performance Impacts in Perspective 165

The Final Word 166

8 Strategic Principles in a Nutshell 173

Strategic Principles and Their Relevance 173

Simple yet Powerful 173

Applicability Beyond Large Companies 175

Applicability Across Geographies 177

Some Common Themes (and Factors) Across the Examples 179

CEOs and Top Managers Set the Correct Example 179

A Clearly Conceived Strategy That Often Defies

Conventional Wisdom 180

Long View 181

Managing Risks 182

Careful Attention to Execution or Implementation Issues and Management of People Resources 183

In Conclusion 184

Index 189