The Momentum Effect: How to Ignite Exceptional Growth

by Jean-Claude Larreche

Book Overview

One of the most frequent challenges that managers and executives face today is how to keep on growing and at the same time make a profit. Various means may deliver short term profitability, but this... This description may be from another edition of this product.

• Format: Hardcover
• Language: English
• ISBN: 0132363429
• ISBN13: 9780132363426
• Release Date: January 2008
• Publisher: Wharton School Publishing
• Length: 324 Pages
• Weight: 1.25 lbs.
• Dimensions: 1.1" x 6.3" x 9.1"

Customer Reviews

An exceptional book!

Eureka! Once in a while you come across a unique book that puts everything together for you. This book puts together the best of strategy, marketing, innovation, business development and so much more. No wonder Sir Richard Branson liked the book. The book closely emulates the genius of the man and how he grew Virgin. J.C, what a great book! I will use "The momentum effect" model for my management consulting projects. Jim Kayalar is a Certified Management Consultant(CMC) with the Institute of Management Consultants USA(IMC - USA) with 20 plus years of business experience in a myriad of industries.

As good as (maybe even better than) Blue Ocean Strategy

As good as (maybe even better than) Blue Ocean Strategy It is worth reading this book and Kim and Mauborgne's Blue Ocean Strategy together (the authors of both books all teach at the same school and Kim and Mauborgne have endorsed The Momentum Effect, calling it a "must read"). Personally I think The Momentum Effect is even better than BOS. The strategy canvas in BOS is a fantastic tool and I've used it a lot but I've always had three nagging questions about the blue ocean book. First, blue oceans sound great, but if I'm stuck in a red ocean is it really true that my only hope is to find a big innovation to sail into a blue ocean? Second, if you do manage it, how do you stop your blue ocean turning red. Third, what are the fundamental mechanics and processes that underlie the creation of uncontested market space. These are three things that Larreche's book is brilliant on. First, he points out that even in red oceans (I don't think he uses that term - he talks about "old established firms" in highly competitive markets) it is possible to generate growth through a series of small cumulative improvements rather than trying all out for a "big bang". He has an amazing graph on page 214 showing cumulative impact of a series of 1% improvements in key performance criteria. As an aside, this graph is an example of one of the differences in this book - Larreche's background was in developing marketing simulation software (eg Markstrat which I used doing my MBA) - the simulations are used sparingly but they add depth. Second, he explicitly states that he is not offering a once through process - if you want to stay on top you have to keep working, keep improving. Lots of books "say" this but few really take it to its logical conclusion, preferring to offer a cosy "destination point" as if beating your targets this year gives you an out for not doing it next year. In the real world reaching one goal is just the jumping off point for trying to hit the next one. Larreche's process shows how constant iteration can be built into your business and how it becomes a source of strength - "momentum" comes from the feedback effect of taking each small success and building on it to make an even bigger one and so on. But for me the real strength of the book is in the way it answers my third point. In Part II, it devotes about 80 pages to the process of designing what he calls "power offers". Part III has the same sort of space devoted to the practicalities of actually executing the strategy. This is one of the first strategy books I've read that manages to balance the grand design with the practical implementation. In short, if you liked Blue Ocean Strategy, you'll love this - if you've always had doubts about BOS - this book might answer them.

Connects old ideas in new and powerful ways

When I told my first boss I was leaving to do an MBA he told me I was wasting my time and that if you hear a new idea in business it is probably wrong. I'm not sure if I agree with him but his point was that business is simple, we should know what we're supposed to do, its just very hard to do it right. I think the author of this book would agree with him (although, given that he's a professor at INSEAD, probably not the bit about an MBA being a waste of time). Most of the individual ideas in this book are not new but I've never seen them presented with as much power or in a way that shows how they all connect together. For example the link between satisfaction and retention is obvious and has been made many times before. What I haven't seen before is the way he argues that because satisfaction is a state of mind rather than an action, and action is driven by emotion, therefore it is the intensity of a customer's satisfaction (ie shifting it from a rational, cognitive state of mind to a passionate and emotional state of mind) really matters. Strong emotions drive powerful actions. Average, four out of five, satisfaction isn't enough to create really powerful emotions so it won't produce noticeable improvements in retention or engagement. 5 out of 5, however, is a different story. Something else that's new and powerful is the way that he shows how these things are all connected in a sort of feedback loop. Intense levels of satisfaction (he used the word "vibrant") create intense levels of retention and engagement, both of which have measurable business benefits themselves, but more importantly, the intense levels of customer engagement can provide feedback that help firms improve their offering yet further, increasing satisfaction levels even more and creating a virtuous circle of ever increasing success. I've read plenty of books that take old ideas and rehash them in a blindingly obvious way - this book takes old ideas, adds some depth to them, makes connections between them and creates something that is greater than the sum of its parts.

A reality check for people who say they "know their customer"

If you've ever had the feeling that when your boss says "our customers come first" what he really means is "our customers come first as long as serving them properly doesn't impact on profits, in which case, `give me the money'". This is the book you need. He shows that once you've made your business efficient, the only way to grow is by creating offerings that generate profitable revenue - obvious I know but apparently not given some of the meetings I've sat through. More importantly, he shows the only way to do that is by really understating your customers - what makes them tick. Again, obvious but he points out that while most firms believe they understand their customers, very few really do. I've always found the question "how much time have you spent with customers in the last month?" to be a real killer. Ask that question of anyone in your firm who isn't in sales and then ask yourself how come we think we know what our customers want if we don't even spend time with them? This isn't just a book about customer focus, but it is about how to ensure that the customer becomes the central guiding light for every aspect of your business and why that matters. There is plenty of stuff in here for you to use to convince skeptics about how much profit growth you are missing out on by not harnessing the momentum that customer focus can deliver.

A book for the real world

This is one of the most powerful and exciting books I've read in years. I've been following Larreche's work for about ten years now, since I came across some reports he did for the FT. A few years ago I also got a chance to see him speak. The guy is great and I've been waiting for this book ever since - especially as, unlike some other management guru/professors/authors he also has experience of the real world (he was on the board of a FTSE 100 company for a long time). It doesn't disappoint. The process he sets out is simple but it is also very powerful - and it also makes sense. He starts by challenging the assumption that increasing marketing spend is the best way to deliver growth. He argues that this is often just a way of buying growth that your products aren't good enough to earn. Instead, he says, you should develop a genuinely deep understanding of your customers that goes beyond the usual surveys and segmentation studies and gets under their skin - then use that understanding to create better products then be ambitious enough about the way you deliver the product and make sure that your customers' experience is so good they start to become engaged - this engagement will help you learn more about your customers and so the whole thing kicks off again. It might sound simple but in practice it's not easy. However, the tools that are all through the book are a great help in putting this into practice - just one (the customer value wedge) is worth the price alone - I've already used it three times today already with members of my team. That's just one example. Most strategy books combine a bit of research and with good stories. What really makes this book stand out is a grounded realization that the real world is a messy place where things don't always go right first time. It's brilliant.