Stall PointsHere's the Review in Brief for Stall Points: Most Companies Stop Growing--Yours Doesn't Have To by Matthew S. Olson and Derek van Bever. See below for the Review in Depth and for Additional Resources. How this book is different: This book is about the stall points in the revenue growth curve that big companies seem to hit without warning. It is based on the study of companies with over $1 billion in annual sales. Strengths: A thoughtful and well-researched book about a topic that's not well covered. The authors define "stall points" as "a distinct downward inflection in the growth rate." Stall Points is very well written for this kind of book. The prose is lucid. The authors use examples to make their points. The authors do an excellent job of presenting both problems and solutions. That will make it easy for those not in a billion dollar company to get value from the book. Warnings: This is a book of very big. company examples written for people concerned with the strategy of large companies. This book assumes that revenue growth is the single goal of a business. If you have other goals, such as profitability growth, or dominance in a defined target market, you may have to do some interpreting as you read. Bottom Line: If you are involved with or a student of strategy, governance, and growth in large companies, buy this book. The sooner you buy it and read it, the sooner you can put the lessons to work. If you're in a smaller company, buy this book anyway. You'll have to do a bit of adapting and modifying, but there's value here for you, too. Now for the Review in Depth. Stall Points: Most Companies Stop Growing--Yours Doesn't Have To is a well-researched and thoughtful addition to the literature on corporate strategy. The authors studied companies with over a billion dollars in annual sales. They tell us that they wrote the book for four kinds of readers.
If that's you, pick up a copy of this book. It's as good a book as any I've seen on big company strategy and it concentrates on an area of strategy that is often ignored. If you're not a member of one of the four audiences, this book is still worth buying. You will need to do a bit of adapting and read with a more critical eye, but there are many good lessons here. The book is divided into three parts. Part one outlines what we know about the growth experience of large firms. The authors analyzed the top line growth experience of five hundred companies that have made it into the Fortune 100 sometime in the last fifty years. They found that 87 percent of those companies experienced stall points. So, you if you're on that ascending revenue curve, it's almost certain that you will stall. And the authors tell us that you're not likely to see the stall coming. That's scary, too, like living in earthquake country. The final key point of this first part is that once a stall happens, it's very hard to recover. Companies that stall have just a seven percent chance of returning to top line growth. How can you beat those odds and avoid what pilots call "an unrecoverable spin?" The answer is that if you know what the causes of a stall point are you can do things to prevent trouble. That brings us to part two. Part two goes into depth on the root causes of growth stalls. The authors identified 42 different root causes. The good news is that the causes cluster into four groups that, taken together, account for more than half of all stalls. "Premium Position Captivity" is about getting stuck in your own success. These root causes include failing to respond to changing customer preferences or new competition. "Innovation Management Breakdown" is about a failure in the innovation chain. No new ideas are making it through to commercialization. "Premature Core Abandonment" is about ways that companies fail to exploit the possibilities of their core businesses. It also includes root causes where a company fails to adapt a successful business model in the face of new competition or changed conditions. "Talent Bench Shortfall" is about a failure to find, develop, and retain the people you need to keep growing. The emphasis here is on executive and technical talent. There's good news in this part. Those key root causes are all things that are under management control. The authors include a self-test for each so you can see if your company is starting to fly some "red flags." Finally, part three covers avoiding (or recovering from) growth stalls. The authors do an excellent job of presenting general advice and under-girding it with practical how-to. You may have to adapt some of the how-to for your, specific situations, but it's refreshing for "big picture" authors to get to this level of detail. There are two chapters in this part that filled with good advice that need to be taken together to be most effective. The first one is about testing assumptions. Bad assumptions can put you on the wrong road, going in the wrong direction and using the wrong map. Combine the how-to advice on testing assumptions with the advice on mapping the future. Those two activities are often presented as if they were two steps in a process, but they're actually intertwined threads. In addition to the basic book material there are five excellent appendices. They cover the details of the study and methodology and give even more specifics about the book's key points. If you are part of the four audiences that the authors wrote for, people involved with or students of strategy, governance and growth in large companies, you should buy Stall Points: Most Companies Stop Growing--Yours Doesn't Have To. The sooner you buy it and read it, the sooner you can put the lessons to work. If you're in a smaller company, buy this book anyway. You'll have to do a bit of adapting and modifying, but there's value here for you, too. Corporate Lifecycles: How and Why Corporations Grow and Die and What to Do About It by Ichak Adizes is a powerful and systematic look at corporate lifecycles. Adizes is the sort of person who creates a methodology. It's in here with lots of detail. Barbarians to Bureaucrats: Corporate Life Cycle Strategies by Lawrence M. Miller also looks at corporate lifecycles, but from a consultant's perspective. Not as systematic as Adizes, but easier reading and easier to dip into. Only the Paranoid Survive: How to Exploit the Crisis Points That Challenge Every Company by Andrew S. Grove is yet another take on corporate lifecycles. Before, during, and after he was CEO of Intel, Andy Grove is an engineer. This book is how an engineer thinks about those lifecycles. The Dip: A Little Book That Teaches You When to Quit (and When to Stick) by Seth Godin is for people and businesses that are trying out new ideas and strategies. It's the only book I know of that gives you ideas about when it's a good idea to quit. Warfighting is my favorite short book about strategy. To see what other folks thought of this book, or to purchase it from Amazon, click here.
 This book review first appeared in the Three Star Leadership Blog.
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