Jean-Claude Larréché was one of my father’s professors at INSEAD, a renowned international graduate business school in Fontainebleau, France. He published this book in 2008 and my dad recommended it to me after reading it.
The Momentum Effect is the idea of generating consistent, high-quality profits over time both through an intimate knowledge of your customers’ desires and a spirit of forward motion among your internal operations. The pitfall into which most companies fall – especially large, successful ones – is that they become complacent with their industry-standard spoils and succumb to traditional management, ultimately leading to an inevitable decline. Because of the constantly changing whims of their customers, they need to refocus the way they do business to more closely understand them and tailor the business accordingly. This overly simplistic description obviously does not do the book justice. Above being a blueprint for catalyzing large, organic growth, it is an impressively detailed breakdown of customer psychology. After reading it, you can’t help but marvel at his command of everything from big picture macroeconomic concepts down to the minutiae of running a small business.
As a non-MBA myself, a lot of the economics beneath Larréché’s reasoning was slightly over my head. However, the book makes up for my bewilderment with practical, real-world examples, most of which have enjoyed very recent success thanks to the concepts outlined in this book. He talks about the Nintendo Wii as a perfect example of a company expanding its reach into a non-traditional market by understanding that market’s desires. He repeatedly brings up Apple’s success with the iPod and iPhone as an example of a robust power offer combined with a high-quality product. On the levels of vibrant retention he prizes Facebook and Virgin Atlantic and lauds the Harry Potter book series when describing customer engagement. Along the way he details many other examples, some more successful and relevant than others (Wal-Mart, Dell, Southwest Airlines, IKEA, First Direct Bank, etc.).
This book is ideal for both the budding entrepreneur and the executive business mogul. It combines a common sense, rational approach to structuring a company’s attitude with a seasoned knowledge of business concepts to show how it is possible to achieve fantastic growth.