The subtitle of this book is finding hidden assets to renew the core and fuel profitable growth. Rather a mouthful!

I came across this book as a result of reading a review of it in The Economist I didn't know before I read it but this book is the third book in the trilogy by Chris Zook who is a consultant with Bain and Co, consultancy.

The main idea behind the book is given on the flap of the dust jacket:

Unstoppable shows you how to look deep within your organisation to find undervalued, unrecognized or underutilised assets, in the form of business platforms, customer insights and capabilities, that can serve as new foundations for sustainable growth.

Let me say at the very beginning that I think there is a big omission from this book: the hidden financial assets. Although the Zook does mention them he only does so in brief and almost in passing; although I suppose someone else's reading the same book might say that there is too much on the financial assets. it might be true that Zook has covered the financial assets in his earlier two books: forgive me if that's true.

That businesses have hidden assets is probably not a surprise to anyone and almost anyone could go to work for a company and within an hour, a day or even a month come up with suggestions for using the hidden assets that they had identified. My main focus is always in the financial, which is why I suggest that the Zook has left them out of this book. That seems to prove my point!

The structure of the book is that we are taken through 25 different case studies and within each case study he identifies one or more points that helps the author to prove his hypothesis that all organisations have hidden assets to be exploited. I made a lot of of marginal notes as I read this book since there are lots of interesting things to think about. However, some of them are obvious and some of them I don't agree with. Still, I think the book is a good addition to anyone's business library since the author works for a highly respectable consultancy firm and any case and is coming out of their have a lot of value.

The contents of the book are:

When to redefine the core
Undervalued business platforms
Untapped customer insights
underutilised capabilities
Managing through the growth cycle

Take a look at those five sections and you may draw the same conclusion as me which is that there is a lot of the balanced scorecard in the structure and content of this book: Finance, processes, systems, customers and employees. That's not to say that this is directly a balanced scorecard book because it isn't. Nevertheless, I think you will get that feeling.

Let me just give you a few snippets from the book that may or may not be fully representative.

When talking about the New York Times and the focus, expand and redefine (FER) cycle we are told to do the following in the F cycle:

Rigorously define your core business and understand how it is different from your competitors'
Consistently lower your cost position that is your key competitors
Actively work to discourage your competitors from reinvesting in your core

Shades of Michael Porter then don't you think?

The Avis car rental company is another one of the case studies and I found it really fascinating mainly because I didn't know the story of course and the company and it was very interested to read the turnaround story. In 1994 apparently, Avis had just suffered from a 70% profit decline and it was at the bottom of the JD Power survey of service levels. In addition it was losing market share in its core car rental market. 12 years later on Aviz now turns over $4 billion a year and is rated by JD Power as number one in service. Zook tells us how they did that.

In undervalued business platforms, Zook introduces the concept of DNA for a business and he does so in the context of another case study, that of PerkinElmer. PerkinElmer is one of those peculiar American companies that we in Britain have probably never heard of and yet they are massive or extremely important. Billion dollar companies in the UK are relatively few and far between and the average person has probably heard of them: go to the United States where there are many many more billion dollar companies yet we've not heard of them. The PerkinElmer story is interesting and Zook says that its story embodies many of our key findings in one remarkable example. First, the entire company was reformed based on undervalued assets that were buried deep in the catalogues along with other scientific instruments. Second, by selling the original equipment business, PerkinElmer first shrank to lead to grow, a move that is underused given its consistent record of liberating value. Third, the change process began with a wave of aggressive cost reduction and operating improvements to generate cash to fuel the new strategy and also to stabilise and strengthen the core instrument business for its new future. Finally, the problems of PerkinElmer turned out to go deeper than the pure financials and market share numbers revealed. They went to the heart of the company's relative competitive cost position against for an instrument companies and the concerned customer base that was gradually eroding in the absence of sufficient innovation in new products.

The reviewer in The Economist laid great store by the de Beers case study in this book: de Beers is a diamond mining company. To be honest that review tells the de Beers story much better than the book and I was disappointed by what Zook had to say. Since I have little interest in the diamond industry, I was unaware that de Beers had a problem and I was also unaware of how they had solved their problems. This case really is interesting since the company took a completely different view of their future business once they were faced with severe competition from Russia among others.

Zook is an American I think although he is based elsewhere: still, he quoted Lord MacLaurin who was the CEO at Tesco plc for several years and he quotes him as follows: Through it all, distribution was the thing; many of our competitors still have not gotten their distribution capabilities right even after all this time. I do not believe for one second that Lord MacLaurin used the word gotten. Otherwise the Tesco case isinteresting even though as a result of reading the book Tescopoly(see my Tescopoly review) I don't use them any more. That's sad because Tesco was my favourite British business for many years and now they are abusing everything and everybody.

Zook demonstrates quite clearly that many companies even extremely large and otherwise well managed companies have hidden assets. Even if you thought you knew that and even if you did know that then this book can still add value. I know that many companies have millions, tens of millions even billions of pounds worth of hidden assets but still this book has given me further insights and the cases are revealing, they are good.

I will not try to analyse this book any more since it is worth while simply from an informational point of view. In terms of its strategic value, you need to see for yourself.

I bought this book just after it was published and I recommend it: it's easy to read, the case is a good, the style is good and it encouraged me to find out more about some of the companies discussed.

Duncan Williamson
14^th August 2007