'Hypercompetition' Is New Business Game Today's Losers Could Be Next Winners by Shifting Rules

Article excerpt

THROW out the old rule books of corporate strategy that teach managers to seek certainty in their markets, attack competitors at their weak points, and adapt their organizations to succeed in the current market environment.

In a word, the new business environment is "hypercompetition," says Richard D'Aveni associate professor of business administration at Dartmouth College's Amos Tuck School of Business in Hanover, N.H. The term, he says, refers to a business environment where rival companies "strike quickly with unexpected, unconventional means of competing."

At the annual conference of the Academy of Management here last week, Mr. D'Aveni, author of "Hypercompetition: The Dynamics of Strategic Maneuvering" (Free Press, 1994), told fellow business-school professors that a fundamental shift in the economy has taken place. As a result, business schools, he says, must teach future managers how to adapt to this environment.

"The game is now about disruption," says D'Aveni, whose talk was one of the best attended at the two-day conference.

For example, the most successful firms - from the newly competitive telecommunications industry to Southwest Airlines - find ways to reshape the playing field in their favor and challenge opponents' strengths, making them obsolete.

He contrasts the innovations needed to succeed in hypercompetition with the current trend of reengineering, which he describes as learning to do "the same old things" faster.

But has such a revolution actually occurred?

"There is always some exaggeration" when such dramatic claims are made, asserts Rosabeth Moss Kanter, a professor at the Harvard Business School in Cambridge, Mass. But her own words echo D'Aveni's concerning a more uncertain economy, in which innovation is rapid.

The increasingly global economy, Ms. Kanter says, includes a work force that is more and more mobile. People who develop marketable skills can have successful careers spanning several companies and industries.

But the turmoil is wrenching, she says. Many people, especially the less skilled - who are most at risk - "are very angry about these changes."

To hear D'Aveni tell it, however, going back to more static models of industry is not an option.

The forces at work

While his colleagues might not label them "forces of hypercompetition," as D'Aveni does, few experts dispute that these four "forces" are at work:

*Rising consumer expectations, meaning customers want low prices, high quality, customization.

*Rapid technological change affecting almost all industries, not just high-tech ones. …