The Strategy Machine

Publishers Weekly

To help companies succeed in the "next economy," Downes (coauthor, Unleashing the Killer App) presents a guide for managers, focusing on the concept of information as a valuable product in itself. "As the new supply chain emerges," he writes, "... information about products can be worth more than the products themselves." He cites TV Guide as an old-school example, then draws on his practice with myriad companies to explain the secrets of generating new products and services from a "complete circuit of information." Downes's strategy embraces all aspects of the information revolution, and succinctly with the aid of diagrams and charts elucidates why a company needs this strategy, how to assemble it and how to keep it running. Copyright 2002 Cahners Business Information.

Soundview Executive Book Summaries

A Battle Plan for the Information Revolution
The Internet and related technologies are part of a revolution in business and beyond. This is not the revolution of the dot-com bubble that burst once investors realized that many Internet start-ups were ill conceived, poorly managed and without a business plan. The subject of The Strategy Machine is the "real" revolution that is transforming industries and putting traditional assets at risk as it creates new ones.

It is not a technology revolution; it is a business revolution that represents a serious expansion of and challenge to capitalism. It is the Information Revolution, and it is a story about managers in many industries who are using information technology strategically to make their companies more profitable in ways that can be sustained for years to come. It is also a story about the ways companies can overcome internal and external obstacles.

Larry Downes, a co-author of the bestseller Unleashing the Killer App, has written The Strategy Machine to help managers succeed over the long haul with a winning portfolio that will take them into the next economy, regardless of their industry, department or the size of their organizations. His latest book offers them the tools to unlock the hidden value that is lurking within their balance sheets, and ways to profit from the transformation that is currently taking place in every industry.

The Age Of Disposable Computers
Downes writes that this is the age of inexpensive, disposable computers. He describes a revolutionary approach to running a business, an approach that has been designed to work in the world of disposable computers that provide regular reports on the status of products from the moment they are made until they are consumed. The Strategy Machine seeks to answer the questions, "Why do I need a strategy machine? How do I put it together? How do I keep it running?"

To answer the first question, Downes predicts that the principal beneficiary and victim of the Information Revolution, which is dominated by disposable computers, will be the supply chain: the integrated set of activities that produce, sell and distribute products and services. As companies use more readily available information about their industries, he writes, their profits will shift from products and services to information about products and services.

An information supply chain will collect information about every sale - for example, who are the customers, how much they paid, and when they need more product. According to Downes, this evolving information supply chain is the real source of productivity improvements today, and will be the source of new value, products and services that are sold as information.

A Strategy Portfolio
Downes says managers must create a portfolio of strategies instead of a single plan. These strategies need to be tested simultaneously and shifted as the environment inside the information supply chain stabilizes.

A strategy machine looks for ways to improve a business today as it tests new ideas that could destroy the business in the future. Downes explains that this strategy portfolio is fueled by information assets, such as brand, expertise, and market intelligence, that increase in value the more they are used. He describes the strategy machine as an invisible capital engine that works like a perpetual motion machine, creating more assets as it reinvests them into the business. A strategy machine is the merger of planning and execution.

How does a manager keep a strategy machine going when it faces the natural, human obstacle of resistance to change? Downes provides answers using several examples of companies that have overcome the many forms of inertia, such as conflicts in marketing messages and problems integrating the strategy machine with employment policies and information systems. Companies overcome inertia by applying leadership to obstacles that are both inside and outside the organization, he writes.

Why Soundview Likes This Book
Downes turns a practical book about business strategy into an exciting adventure into the future of technology and invention, using a wonderful metaphor for organizational change.

His examples are full of compelling anecdotes and descriptive examples that illustrate his ideas about the present and the future. By grounding his visions of the future in real-world business decisions that have worked and failed, he turns his metaphor of the machine into a forward-looking strategy that businesses can use to grow and succeed as they face the uncertainties of the digital age armed with innovation, technology integration and tools for transformation. Copyright (c) 2002 Soundview Executive Book Summaries