Book Title: Clock Speed: Winning Industry Control in the Age of Temporary Advantage

Author: Charles H. Fine

Genre: Business Development

Sub-Topics: Supply Chain, Business Process, Organizational Structure, Industry Analysis

Rating: Great

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I picked up this book in the spring of 2005 during the start of my professional program with the W.P. Carey School of Business at Arizona State University.  I had chosen to major in Supply Chain and complete my Barrett Honors College thesis in Finance for the simple reason of obtaining a higher paying job post-graduation. I had no clue at the time how I would come to love these topics and use them on a daily basis even today in my own entrepreneurial ventures.

My SCM 345 – Logistics / Supply Chain Management professor,  Dr. Bryan Ashenbaum recommend in one of our out of class discussions that I pick up Clock Speed by Charles Fine as an introduction to some more modern and advanced SCM topics. I ended up buying Clock Speed back in 2005 but never bothered actually reading it until 2011.  What a jewel of knowledge left undiscovered as it sat collecting dust on my bookshelf all these years.

I still keep in contact with Dr. Ashenbaum and we have recently discussed the relevance of this book and how it has sorta “stood the test of time.”  The most amazing part of this book is that it was written in the late 90s and although some of the examples are far outdated, the SCM principles are sound and have been illustrated very well over the last decade of business and supply chain evolution.  Fine even has the genius to foreshadow Apple’s rise, the advent of social media as well as the shift in movie rentals from brick & mortar to online.  Remember, this book was written back when Google was still relativity unknown.

 
There are two caveats about picking up this book.  You will probably only enjoy it if you are a super supply chain and process nerd like me, or if you really enjoy reading about the history of major companies.  You may however find the business development, benchmarking and industry analysis concepts to be quite useful if you are a business owner or consultant.  The theme of the book is in comparing the evolution of business and industry to the evolution of species in the wild.  The core message is that businesses must continue to evolve and grow looking for the next capability or advantage to exploit.  Fine also argues that the long term success of an organization is highly dependent on that company making supply chain design a core competency.  To quote Fine…

“Lasting success will go neither to the company that manages to find a great business opportunity nor to the firm that develops the best proprietary technology.  Rather […] the greatest rewards go to the companies that can anticipate, time after time, which capabilities are worth investing in and which should be outsourced; which should be cultivated and which should be discarded; which will be the levers of value chain control and which will be controlled by others.”

“Just as genetic engineering has begun to shortcut the process of species evolution, proactive [supply] chain design will shortcut and forever make obsolete the slow, incremental process of industrial evolution.”

This line of thinking follows Peter Senge’s concept of a “learning organization” which he introduced in The Fifth Discipline published way back in 1990.  Is there any correlation that both Fine and Senge are out of the MIT Sloan School of Management?  What is in the water in Massachusetts?

Fine touches on the now common practices of job hopping of the last decade with this statement…

“To be sure, business leaders have always had to contend with change, but in time past, the shocks tended to be fewer and farther between.  Most industries crawled along at turtlelike clockspeeds.  Companies carried on for generations, far longer than the career of any given manager.  When a worker started a career with a company, he or she “knew” the structure of the company and industry would last a lifetime.   Today […] you have little ground for such confidence.”

He further foreshadows at increased globalization with this statement…

“No corporation is an island.  Every company is dependent on other in large supply chains and distribution chains.  As a result, limiting strategy to within the corporate enterprise is as meaningless as the purported boundaries of such entities.”

He also responds to the outsourcing frenzy of the last few decades with this quip…

“…to outsource one’s own thinking is to relinquish one’s responsibilities for the core of executive decision making.  In short, thinking is a core capability not to be outsourced.”

The book is chop full of great historical examples of how varying decisions around supply chain design impacted the example company itself and their industry.  My favorite example is that of IBM which is touched on several times in the book.  Fine warns of the lessons to be learned from IBM’s decisions to outsource processors to Intel and operating systems to Microsoft, and how this forever changed the industry and ultimately led to IBM’s fall from dominance.  The PC industry examples are particularly interesting to read understanding that you are reading a 1999 point of view with over another decade of examples to draw on.

Fine gets into some hardcore analysis techniques towards the end of the book that would even make an industrial engineer have to read it twice.  However my favorite part of this book is the Epilogue where Fine applies his clockspeed analysis methods to examine, the public, religious and governmental sectors.  This is a very timeless and thought provoking Epilogue indeed!

If you are a supply chain geek, or just up to the task of learning a new set of business tools.  Clock Speed is a great read that has helped me put some critical business development tools in my SCM toolbox.

To Purchase Charles Fine’s Clock Speed Follow The Link Below

Clockspeed : Winning Industry Control in the Age of Temporary Advantage