Core curriculum

PROFIT FROM THE CORE: GROWTH STRATEGY IN AN ERA OF TURBULENCE.

By Chris Zook with James Allen.

Harvard Business School Press; 208 pages; $27.50.

CREATIVE DESTRUCTION: WHY COMPANIES THAT ARE BUILT TO LAST UNDERPERFORM THE MARKET—AND HOW TO SUCCESSFULLY TRANSFORM THEM.

By Richard Foster and Sarah Kaplan.

Doubleday; 320 pages; $27.50.

WHAT'S a CEO to do? Too little innovation and you might be dusted by your competitors. Too much and you risk a product that nobody wants—yet. Fail to grow and you'll be dwarfed; grow too fast, without a comprehensive strategy, and you may lose sight of what made you successful. But then again, even the best-laid plans for growth gang aft aglay, which means you'll eventually have to divest and start all over regardless. It is enough to make a CEO seek a less perilous profession, such as firefighter, sword-swallower or professional gambler in Macao.

“Profit from the Core”, by Chris Zook with James Allen (a director at Bain & Company and CEO of a venture-capital firm, respectively), and “Creative Destruction”, by Richard Foster and Sarah Kaplan (a senior partner and former employee at McKinsey & Company, respectively) both ask why so many established companies consistently underperform the market, and how they should grow. As befits rival consultancies, they arrive at opposite conclusions. “Profit from the Core” advocates focusing on goals and skills familiar to the company (the “core”); “Creative Destruction” urges corporations to constantly look for new ways to expand in a changing market.

Take, for example, Intel's decision in 1983 to switch from making memory chips to microprocessors. The authors of “Creative Destruction” hail CEO Andy Grove's victory over the forces of “cultural lock-in”—fear of diverging from Intel's historic strength. “Profit from the Core”, by contrast, contends that by narrowing its strategic “core” to microprocessors, Intel wisely resisted becoming “all things to all people.”

Thus the two books are not all that far apart in substance; their more significant difference is in style and presentation. “Profiting from the core” is less a full-blown strategy than a reminder not to expand willy-nilly. Messrs Zook and Allen have little more than say than that, but they write clearly and effectively. Their volume may work best as a workbook for managers to stimulate discussion in a company considering change.

“Creative Destruction” is more ambitious but less well-written: the emphasis on jargon (particularly in the first few chapters) is off-putting. Later on, well-researched case studies such as Intel's, many of them drawn from the authors' consulting work, explain step by careful step how to rework companies without alienating employees or plunging the entire enterprise into chaos. It can make for depressing reading. For every Intel, there are five companies undone by timidity, misreading the market, overconfidence, or just bad luck—but the thoughtful CEO might use it as jumping-off point for considering company fundamentals.