Compelling analysis of the new rules of business competition

Outthinkers step outside of the accepted paradigms in which thinkers operate, acting differently because they see the world differently, according to Kaihan Krippendorff in his book Outthink the Competition: How a New Generation of Strategists Sees Options Others Ignore. Ordinary thinkers at first dismiss the outthinkers, then they ridicule them, and then they try to copy them. But it is too late if the outthinkers have gained a sustainable advantage.

The secret to success for outthinkers, then, is to make a few strategic choices to which your competition will not be able to respond effectively. Examples of companies which have done this to their competitors include Google, Netflix, Sohu.com, Research in Motion, Intuitive Surgical, eBay, Apple, Southwest Airlines, Dell and Home Depot. In each case, the company seized a strategic option that others were ignoring.

The basis of competition between companies is shifting from an economies-of-scale environment to a free-flow-of-information environment. Improved communications are driving middlemen out of business. The pace of competition is accelerating. Self-organized citizens and customers are seizing control. A small number of outthinkers are succeeding, but the majority of businesses are treading water or going backwards.

The author goes on to describe the “new playbook” (consisting of key strategies which outthinkers follow), the “habits” of outthinkers, a step-by-step process for applying outthinking to any organization, and the phases involved in rebuilding an organization from within.

While the book relied a little too much on ancient Chinese military strategy for my taste, I found the author’s arguments about the changing business environment convincing and his analyses of successful companies compelling. Business really has become more difficult and customers more demanding; in my opinion this book provides some very useful tools for envisioning ways of adapting to succeed.

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