"The Escher Cycle" — Frequently Asked Questions
Click the links below to read answers to these frequently-asked questions:
- What inspired you to write The Escher Cycle?
- What is the answer? What does it take to integrate strategy and operations?
- Can you describe these levels of advantage?
- Why is the advantage "self-reinforcing"?
- And the four levels build on each other in a hierarchy, is that correct?
- If The Escher Cycle is so important, why haven't we heard of it before?
- Who will find The Escher Cycle useful and why?
Q: What inspired you to write The Escher Cycle?
A: If you look at great companies from around the world, in any country or any industry, you find they all share one thing in common: they all flawlessly execute day-to-day activities while maintaining a clear vision for the future.
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Most business books, on the other hand, focus on just one part of what it takes to create that success. They focus on marketing or finance, strategy or operations, managing growth or turnaround, and so on.
What I wanted to do was to write a book that shows how it all fits together. I wanted to show what it takes for a business as a whole to succeed. Because if we can understand that then we can understand how to do what those great companies do, and seamlessly integrate strategy and execution.
Q: What is the answer? What does it take to integrate strategy and operations?
A: Well, the starting point is to realise that 'strategic' competitive advantage only ever comes when a business carries out an activity or activities better than its rivals.
So The Escher Cycle starts by identifying what are the key minimum activities that any business needs to carry out to be successful. And then it shows how strategic advantage builds in layers, as businesses develop greater levels of skill or competence at carrying out these key activities.
Q: Can you describe these levels of advantage?
A: The first level comes from simply carrying out the basic activities better than rivals. This is Operational advantage.
The second layer comes from balancing and aligning the different parts of the business, to improve the performance of the whole. This part is Leadership and it is critical to successful change over time.
The third level of performance comes from fine-tuning the ways that activities are carried out, to match the particular part of the economy where the business is operating. This level is Strategy.
And the fourth and final level of skill comes from understanding how different businesses interact together to produce the effect we call Progress. By understanding and copying these interactions, a business can accelerate its own Progress - accelerate its own evolution - and so can build a self-reinforcing cycle of business advantage. This level is The Escher Cycle.
Q: Why is the advantage "self-reinforcing"?
A: Because The Escher Cycle uses high performance at one key business activity to improve performance at another. That then helps improve a third, which improves the first one again. It is a repeating loop, a virtuous circle.
Q: And the four levels build on each other in a hierarchy, is that correct?
A: Yes. The first and most important level is Operations. Any company that finds a way to give its customers twice the value for half the cost has a huge advantage, irrespective of its Leadership or Strategy. But if two rival businesses are roughly the same at Operations, then the activities to do with Leadership start to make the difference. If Leadership and Operations are both roughly equal then Strategy becomes important. And at the top of the hierarchy sits The Escher Cycle.
Q: If The Escher Cycle is so important, why haven't we heard of it before?
A: In a word: globalisation. When the process of globalisation started to take off, twenty or thirty years ago, the first wave of changes came from computer technology, process reengineering and downsizing. These all raised the bar of acceptable performance at the Operational level. Firms that could not compete found themselves being eliminated or acquired. Once they had gone, the remaining firms then competed on their ability to optimise their operations and change over time: the Leadership level.
Now we have a situation where there are relatively few firms left in each industry. Good Operations and Leadership are a given, and it is variations in Strategy that make the difference. Operational performance is still important, as the rush into China has shown. But if everybody moves to China then being there does not make you better than rivals: it only keeps you in the game.
What is beginning to make the difference now is the level beyond strategy: the ability of companies to evolve and drive their market places; to come up with new products and services that customers want, as well as better ways of delivering them. This is the level of skill that The Escher Cycle works at.
The reason we have not seen it before now is that up until now it has always been enough to compete on Operations, Leadership, or Strategy. But in the global marketplace companies have to work even harder to become better. They need to achieve the seamless integration of strategy and execution that The Escher Cycle shows us how to achieve. And because the improvements that it brings are self-reinforcing, the companies that implement it fastest and best will dominate their marketplaces.
Q: Who will find The Escher Cycle useful and why?
A: In the same way that business advantage comes in layers, so The Escher Cycle will appeal to readers in different ways, according to what level of business most interests them.
Chief executives for example, and the consultants who advise them, will clearly want to understand how to link and coordinate the different parts of their business together, in order to create an Escher Cycle. They will also want to use the concepts in the book for strategic positioning, and for managing mergers and acquisitions.
Lower in the organisation, managers with individual functional responsibilities will find the book helps them to focus on their key contribution to the business as a whole. This will not only increase their efficiency and effectiveness, but will also prepare them for more senior roles.
And between these two, divisional and business unit managers are charged with setting and implementing strategy. The unique and integrated combination of strategy and action that this book contains will help them to do both.
Finally, entrepreneurs and students of business will simply value the overview that the book gives of the different activities that go to make a healthy successful business, and how to get them all to fit together.
