Soaring With Your Core

The familiar cliché "stick to your knitting" isone of the oldest business bromides around, but it's never beenexplored as Bain & Co. consultants Chris Zook and James Allendo in Profit From the Core (Harvard Business School Press, $27.50),a concise, compelling report on why and how to figure out exactlywhat your company does best-and then do it. The two boil downthe findings of a 10-year, 2,000-company study into three keytraits that differentiate companies that grow from those thatstagnate. First, they say, growth companies reach full potential intheir core businesses before trying anything new. Second, when theyexpand, growth companies look toward adjacent businesses ratherthan hot industries that are far afield. Third, growth companiescan, and do, radically redefine their core operations when dealingwith quickly changing markets.

These simple and yet powerful ideas emerge smoothly andconvincingly from the mass of data and techniques Zook and Allenhave compiled, but there are paradoxes. For instance, companiesconsistently found the greatest untapped potential in divisionsthat were already performing well. Sound surprising? Well, thereare many such profound revelations to be discovered here.