Revival of the Fittest - Book Review

HR Magazine, Sept, 2003 by Leigh Rivenbark

By Donald N. Sull Harvard Business School Press, 2003, 203 pages List price: $29.95, ISBN: 1-57851-993-4

Donald N. Sull, an assistant professor Harvard Business School, wants managers and executives to heed lessons from businesses that failed to change their formulas when circumstances left them behind.

This book is about managerial commitments, says Sull. He defines those commitments as the bundle of strategies, relationships, investments and values that become a company's success formula. New technologies, economic changes, consumers' shifting tastes or new regulations can threaten the success formula. A company that reacts by accelerating the formula, saying that what worked in the past will work again, is a victim of "active inertia."

IBM is an example. The company invested in the growing personal computer market in the 1980s but viewed PCs ms a way to sell the mainframe computers for which IBM was known. IBM failed to address customers' real needs and in the early 1990s bled billions because it hadn't really moved away from its outdated formula, Sull says.

Sull helps readers identify the factors that place a company at risk of active inertia.

Companies can make "transforming commitments" that shake up the company's success formula but don't necessarily rip out its core values. Sull salts the book with detailed examples that pair successful and unsuccessful companies in the same industries.

To build a new commitment, Sull says, companies need new anchors, single goals that summarize where they're going. IBM emerged from its active inertia in the mid-1990s by anchoring its business on one idea: The company would provide integrated products, not just mainframes.

To make these commitments credible, management must invest both money and people, ignore nay-saying experts and set up ways to quantify and measure progress. The new commitment should close off the past, as Nokia did when it sold its diverse non-telecommunications businesses and staked everything on telecom.

But companies can try to change and end up failing anyway. Failing to use realistic numbers is one pitfall, as Kmart found when it lowered prices to compete with Wal-Mart and ended up in the red. Ignoring core values is another, as clothier Laura Ashley discovered when its foray into black business suits alienated longtime customers of its sorter styles.

The book provides questions and tests to help readers decide where their firms are headed. Sull also asks managers and executives to consider how transforming commitments might affect their careers.

COMPILED BY LEIGH RIVENBARK, A FREELANCE WRITER AND EDITOR BASED IN VIENNA, VA.