Markides is Professor of Strategic and International Management and holds the Robert P. Bauman Chair of Strategic Leadership at the London Business School. He is the author of numerous articles and books that include All the Right Moves and is coeditor of Strategic Thinking for the Next Economy. Geroski was until recently Professor of Economics at the London Business School and his research interests include innovation, competitive strategy, and competition policy.
In his previously published All the Right Moves (1999), Markides asserts, “superior strategy is all about finding and exploiting a unique strategy in the company’s business while at the same time searching for new strategic positions on a continuing basis.” First, he explains how to create and execute such a strategy and then locate its most favorable position; then he explains how to prepare for strategic innovation that will strengthen that position. In the final chapter, he concedes, “designing a successful strategy is a never-ending quest. Even the most successful companies must continually question the basis of their business and the assumptions underlying their ‘formula for success.’ (In fact, in one way or another, this is what most successful companies have done to get where they are.) New who/what/how positions are constantly popping up around the mass market, and established companies must be on the lookout for them. Like a modern-day Christopher Columbus, each company must set out to explore its industry’s evolving terrain, searching for new and unexploited strategic positions.”
Markides and co-author Paul Geroski explain what a “fast second” strategy is and how to formulate it as well as how “smart companies” have been able to bypass radical innovation to enter and dominate new markets. They identify and then examine four quite different types of innovation: Major, Radical, Incremental, and Strategic. “Our thesis is that it is impossible to offer proper advice on how to create or colonize new markets without first understanding where new markets come from, what they look like, and what it takes to succeed in them.” They focus on demand and supply-side influences, arguing that, in the main, “most radical new technologies are pushed onto the market from the supply side.” Therefore, radical innovations are by nature disruptive, for both customers and producers. Moreover, radical new markets are rarely created because of demand or customer needs. “Instead, they are created in a haphazard manner when a new technology gets pushed onto the market.”
Markides and Geroski (in effect) call for a “Time Out!” on initiatives to create or respond to disruptive technologies, suggesting that less heat and more light are needed insofar as assumptions about such technologies are concerned. Each requires different strategies and tactics. This is especially important before decision-makers “set sail” in search of what Chan Kim and Renée Mauborgne characterize as “blue oceans” (i.e. uncontested market space). Without really understanding the nature of the given technology and market, decision-makers will be victimized by what Jeffrey Pfeffer and Robert Sutton characterize as the Doing-Knowing Gap.” This book provides information to those who struggle to get appropriate alignment of strategy and market.
Markides and Geroski’s insights challenge another durable assertion: that larger, established organizations can become more “entrepreneurial” by developing cultures and structures of much smaller, start-up firms. This challenge will require decision-makers to re-evaluate their own assumptions about pioneering, creating new products and/or services for new markets, the proper role of internal R&D, etc.
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