Book Club: Inside the Tornado by Geoffrey Moore

Book Club is a series of reviewing business-related books. You can check out the Book Club tag for more reviews. - Patrick

WHO SHOULD READ IT:

This is geared directly toward tech companies looking for a foothold in that oh-so-quick-moving tech industry. HOWEVER, if you're a business owner or interested in developing your company's business, you should give this a read. Many of the underlying principles apply to construction, as they would any business looking for a foot hold or to better understand the ebbs and flows of the marketplace.

2-SENTENCE SUMMARY:

Markets, industries and especially consumers are a fickle bunch and they're always moving, adjusting, reacting, choosing and buying. Inside the Tornado explains lots of the movements and exactly what it means for businesses throughout the Adoption Lifecycle (from Chasm to Tornado to Main Street). 

MY KEY TAKEAWAYS:

  1. Markets and customers are forever changing. What got you here won't get you there.
  2. Learn to ride the waves by knowing where you're at in the cycle and how to adapt. Have a plan in place.
  3. The book closes with an amazing quote about trust and delegation (see below).

SUMMARY:

I want to start by saying that, yes, this is an old book. It was last updated in 2004 (and the version I read was from 1995!). So even though the references are old and some terms outdated, all the principles still apply. Don't get hung up on the old stuff, focus on the content and it will be worth your while.

The book is split into two parts: The Development of Hyper-growth Markets, and The Implications for Strategy. Each section goes into incredible detail on a number of topics related to each. Inside the Tornado is also a follow-on book to Crossing the Chasm. Of course, I didn't know that until about chapter 2. So the next book I read will likely be Crossing the Chasm. Make sure you buy both if you're going to buy.

A major term that's referenced throughout the book is 'Technology Adoption Life Cycle', which is  a model for how communities respond to discontinuous innovation. Discontinuous innovation is when new products or services come to market that require the end user and marketplace to dramatically change their past behavior, with the promise of gaining equally dramatic new benefits.

So, what causes a tornado? A group of pragmatists (the ones who aren't going to step out onto a limb or try new things, but rather wait until it's been proven to them first) all deciding it’s time to make a shift. They network together, choose a vendor and all go for it. This creates a massive rush into the new market, which kicks off a tornado.

Inside a tornado, companies have one job: ship the product. All the end-users want is to get this new popular product. So the company just needs to ship it. No more courting buyers, no more convincing executives; just ship. 

The paradox of trust is that by intentionally relinquishing power, one gains it back many times over.
— Geoffrey Moore

What happens after the tornado passes? End-user hangover. Customers are gone, executives with credit cards disappear and revenues tank. This is where is goes from ‘the hottest new thing’ to, simply, the way things are now. The paradigm shift is over. It’s now on 'Main Street', as the book says. 

So how does the vendor help maintain revenues while on Main Street? The book calls it ‘Whole Product +1’, where the company offers the whole product that took off in the tornado, and start niching it down to provide value for the Main Street users. An easy example would be at-home printers. The at-home printer itself is what took off in the tornado. But on Main Street, the marketing shift to the at-home printer that is extra small for space-conscious consumers, or one that prints and scans. You get the picture - whole product (printer), +1 (ability to scan). 

The unfortunate part is that while the vendor is inside the tornado, they’re not usually set up to collect info about the customers that aide in creating +1 offers. So they have to backtrack to get the data, making it a somewhat inefficient process. Consider that a lesson learned.

Part two of the book, Implications for Strategy, by talking about partnerships and the role they play throughout the Tech Adoption Lifecycle. The book even addresses some common questions you might have when trying to evaluate if a partnership is the right thing to do, and when to do it.

For construction, this VERY CLOSELY relates to teaming. Whether it’s subcontracting or creating a Joint Venture, the principles all apply. This is probably the most applicable part of the book for construction companies. You need to read the book to to get all the details, but Moore discusses how partnering affects the company and product itself. 

In construction, we hear a lot about (and struggle with) competitive advantage. The three ‘competitive advantages’ or ‘value disciplines’ mentioned in the book are:

  • Product Leadership
  • Operational Excellence
  • Customer Intimacy

Usually excelling in one of these three means forfeiting the other two. But Moore makes a point that it is actually necessary for a business to adapt each of these to their current stage in the Adoption Lifecycle. I wouldn't do it justice to summarize it here, so you'll need the book to dive into the 'value disciplines'.

When it comes to construction, what can we really pull from Inside the Tornado? I would easily line it up against a typical project lifecycle. It's typically a slow burn during the Get Work phase on construction - pre-bid meetings, proposals, estimates, etc. All relatively boring stuff. But then it hits the power-band when the project is won and finally kicks off. It's a mad dash to get everything set up - budgets, software, personnel, material, etc. This is the Tornado. Eventually, we find ourselves in the closeout phase. Things slow down, operations wrap up, personnel are moved to other projects, material ordering is done and punchlist and paperwork take center stage. 

construction patrick grayson frontline solutions

A note about the Book Club: I'm always looking for good reads, and I'm a non-fiction kind of guy. There are two things I want you, the reader, to do: 1) Let's chat in the comments below about the book or what your takeaways are, and 2) tell me if you know of a book that should make the reading list.

Thanks, Patrick