182 • 100 GREAT BUSINESS IDEAS
The key to success lies in viewing the essentials of business (such
as people, customers, cash, ideas, skills, reputation, and others) as
resources that accumulate or decline. By taking a resource-based
view you will make decisions that are dynamic and forward-focused,
rather than historically based.
The idea
Resources interact and interconnect. This simple fact holds the key
to growing and developing a business, as plans and decisions are
more likely to succeed.
In The Critical Path and Competitive Strategy Dynamics, Professor
Kim Warren of London Business School explains that the
greatest challenge facing managers is understanding and driving
performance into the future. “When the causes of performance
through time are not understood, companies tend to make poor
choices about their future... The ‘critical path’ is the journey
the business takes as it builds resources and tackles the strategic
challenge of developing future performance.”
Japanese technology fi rm Canon recognized the importance
of resource building in the 1970s. To overcome the formidable
advantages of Xerox, the market leader, Canon focused on building
tangible and direct resources (such as customers, products,
distributors, and cash) and intangible, indirect resources (such as
brand reputation). Canon designed copiers for maximum reliability,
made replacement parts modular so that end-use customers could
replace them, and ensured designs were so simple that dealers