Get the Fundamentals Right to Succeed Book Review

The Breakthrough Imperative: How the Best Managers Get Outstanding Results

By Mark Gottfredson and Steve Schaubert
Harper Collins, New York, NY
March 2008, 384 pages, $26.95

Successful business executives share two things: (a) they grasp the “fundamental laws of business,” and (b) they possess the insight to use those “laws” in charting a coherent path for any organization to reach its full potential. This book is a compendium of sound information about those “laws” and how best to apply the key principles.

The authors distill their years of experience and study into a solid guide to improving the performance of any business. Gottfredson and Schaubert are Harvard MBA program graduates with decades of high level consulting experience. With their excellent background and credentials, the authors deliver a sound book on business fundamentals.

The four “laws” the authors advance as the key to success are as follows:

1. Costs and Prices Always Decline
a. In constant dollars, the experience curve shows that the more often a task is done, the less it will cost to perform it and the price of the product will decline as well.
b. This does require adjusting for quality improvements and product changes.

2. Competitive Position Determines Your Options
a. You must understand and plot your position relative to the competition.
b. This requires clear data on market share distribution and economic performance for each player.

3. Customers and Profit Pools Don’t Stand Still
a. The business leader must know the total value chain for each product and at what step the profits are generated.
b. Solid analysis of each supplier, competitor, and customer is needed to predict shifts in preferences or processes that generate value and profit.

4. Simplicity Gets Results
a. People can focus on only three or four things at once successfully, so attention should be directed to the three or four product dimensions that stand out for the customer.
b. This requires in-depth knowledge of customer preferences and a willingness to reduce product and organizational complexity to better focus on key product dimensions.

Each of the four “laws” has a common sense element in addition to an analytical perspective. A medium to large business may want a consultant or expert staff to do the calculations and research. Leaders in smaller businesses may not have the resources for an expert. In either circumstance, the material on organizational diagnostics and development of strategic approaches will be of help in assessing business problems and establishing an action plan.

This book has good content and sound organization, but it is heavily weighted toward large organizations. This can make it difficult to see applications in smaller organizations. Nonetheless, it has enough helpful material to make it valuable to any leader seeking to construct an organizational turnaround effort.

Bob Clark is the president of RWC Consulting LLC and has more than 30 years experience in labor-management relations. He provides consulting help in labor relations and is an adjunct professor at Concordia University in Ann Arbor, Mich.