What makes this book valuable is that it focuses directly on sustainable economic growth The authors have identified two types of growth that flow from the exercise of simplification proposition simplification and price simplification These two methods of growing the company are fundamentally different and the decision to pursue one form of simplification over another must be made on reliable grounds.
The decision must take cognizance of the culture of the company and its appetite and ability to pursue one type of simplification over the other Further, the nature of both the company s offering and the nature of the market will affect the decision making process.
I will describe how the two types of simplification unfold through the descriptions of some of the well known businesses used in the book as examples.
Price simplificationThe sole objective of price simplification is to slash the costs of the product or service to the consumer.
Henry Ford achieved price simplification by reducing the variety of cars his company initially offered down to one, and in only one colour black The very design of the car was aimed at giving people what they needed and nothing a way to move faster than on horseback Ford worked constantly on redesigning his factories so that cars could be produced ever cheaply The company s success was directly correlated to the constantly dropping selling price.
IKEA, the mass retailer of affordable, attractive furniture, redesigned their products so that they could be flat packed, saving the company transport and storage costs This price simplification model also involved co opting customers into the sales process to further reduce costs Not only are there no salespeople for you to discuss your decorating needs with, you select the furniture yourself, but you even take it home yourself in a flat pack Then, you assemble the furniture from their remarkably clear instructions.
McDonald s reduced the price of their burgers by reducing variety, and automating processes wherever possible They also speeded up the delivery of the food, so allowing for a faster flow through of customers, and eliminated the cost of waiters Customers essentially serve themselves.
Honda entered the American market by reducing the power of the motor cycles they offered, and scaling down their offering to the larger segment of small motor cycle users Honda also lowered their costs of labour, their most expensive component, through efficiencies of production and management.
Proposition SimplificationProposition simplification differs from price simplification with its focus on making the product or service a joy to use The price is not a factor and many who are proposition simplifiers are expensive than their competitors This category benefits from people s willingness to pay , if that is what it takes to own something that is easier to use, or useful or aesthetically pleasing.
Apple Macintosh effectively created the high end customer segment by manufacturing products that were intuitive for the user, user friendly and beautiful.
Uber has made the experience of using a taxi quicker through the software that hails the drivers closest to you The newer cars required for use by Uber drivers are expected to be reliable, comfortable, and the whole experience is often cheaper than conventional taxis This combination of the speed of getting a ride and the convenience of not having to pay cash, are among many features that have made Uber hugely successful, and an extremely valuable company.
The computer scientists at Xerox PARC invented the modern PC, the mouse and much, much However, they failed to capitalize on their inventions partially because they never focused on process simplification They snatched defeat from the jaws of victory because they liked complexity than they liked simplicity, the authors explain.
Process simplification and the monetization of these technological innovations were left to the late, great Steve Jobs He brought Apple back to profitability by focusing on just two models of the Mac and producing the easiest to use, most fun personal computer on the market.
Then came the iPod, another extraordinary example of proposition simplification Existing MP3 players were horrible, absolutely horrible They were difficult to use and held about sixteen songs Jobs and the team devised a far simpler player that had a drive that would hold a thousand songs, with a FireWire connection to sync the thousand songs in under ten minutes, and a battery that would last through a thousand songs.
Apple is a prime example of a proposition simplifier.
What tactics your context requires to use the principle of simplification, will be completely unique The value of this book is the awareness of the power of simplification, and the guidance it offers to the process the rest is up to you.
Readability Light SeriousInsights High LowPractical High Low Ian Mann of Gateways consults internationally on leadership and strategy and is the author of the soon to be released Executive Update.
Ok, this guy makes like 15 investments in 24 years and they all return 1000% or Here are his simple rules that drive those choices Why would you not want to know this information read this book, if you want to have an extremely successful business or a way of identifying which business will way outperform others.
This book takes what is obvious and distills from the hindsight s of the last 100 years, a Process whereby one may become the next disruptor of the status quo the window where fortunes are made.
The steps are deceptively simple The key Knowing what questions to ask That is what this book teaches.
Look beyond the hindsight mentality to the principles taught those are the timeless essence this book reveals and presents.
Is this of any value Only if one incorporates the principles questions to identify the opportunities ever unfolding in our highly complex inter dependent economy.
It s one of the best books on the subject matter and it explains with real life examples Apple Google, etc how exponential growth can be achieved through simplifying a product or service.
A must read and highly recommended
I can t unsee the information I know now from reading this book Was a top 3 read for 2017.
For The Past Forty Years, Richard Koch Has Worked To Uncover Simple And Elegant Principles Which Govern Business Success To Qualify, A Principle Must Be So Overwhelmingly Powerful That Anyone Can Reliably Apply It To Generate Extraordinary ResultsWorking With Venture Capitalist Greg Lockwood And Supported By Specially Commissioned Research From OC C Strategy Consultants, Koch Has Now Found One Elemental Principle That Unites Extraordinarily Valuable Companies Simplifying Some Firms Simplify On Price Consider Budget Flights Stripped Of All Extras That Still Take You From A To B Creating New, Huge Mass Markets For Their Wares Others, Such As Apple, Simplify Their Proposition, Bringing A Beautifully Easy To Use Product Or Service To A Large Premium MarketHow Can Your Business Become A Simplifier With Case Studies Of Some Of The Most Famous Firms Of The Last Hundred Years, From Finance To Fast Food, This Enlightening Book Shows How To Analyse Any Company S Potential To Simplify, And Enrich The World