Biography

Richard D'AVENI

2009 ranking: 26

RICHARD A. D'AVENI: BIOGRAPHY

Richard D’Aveni is Professor of Strategic Management at the Tuck Business School at Dartmouth University, which he calls “an idyllic place in the woods of New Hampshire.” A graduate of Cornell, Boston and Columbia universities, he joined the Tuck Faculty in 1988.

D’Aveni is an expert on competitive strategy. Competition is a sine qua non of an open economy leading to greater efficiency. The roads to efficiency are well known and have been successfully copied by successful firms to a greater or lesser extent. But with nearly all companies becoming super-efficient so as to play their best in the competition game, they have not become more profitable. This situation is described by Richard D’Aveni as hyper-competition in his book of the same name of 1994.

This is found especially in new industries or business sectors relying on new technologies. More mature business sectors work out rules and standards of operation. In newly-emerging sectors this informal codification has not had time to happen. Certain companies may enjoy competitive advantages, but because of the volatility of the business environment these cannot be sustained even in the medium term. The only way to stay ahead is by competing in traditional areas like pricing and quality. They may also try to create new value, or introduce innovation in areas like supply chain management. Often the most effective way to survive in the hypercompetitive environment is to be cash rich and enter a war of competitive attrition where the ultimate survivors are the companies able to bankroll a product through a period of bruising competition.

In his book D’Aveni, always a pragmatist, showed ways not only of coping with hyper-competition but of how to beat rivals and seize leadership. In his book Strategic Supremacy (2001) he demonstrated means by which supremacy, once achieved can be preserved and consolidated in a world where there were hordes of competitors itching to grab the trophy;

Although D’Aveni coined the term hyper-competition in the early ‘90s he sees the phenomenon as even greater today thanks to globalization and on-going technological volatility.

In his opinion the greatest threat facing business today is a relentless commoditization. Cut-throat competition has led to the disintegration of essential differences between brands, which are increasingly differentiated by consumers only on price. This process has been accelerated by the entry of low-cost Chinese and Indian producers. D’Aveni sees this commoditization as an economic tsunami which will impact on the developed world for decades. He points in particular to China with its vast and seemingly inexhaustible supply of cheap labor which can continually be called upon to make low-cost goods. D’Aveni has been compared to Henry Kissinger and ancient Chinese writer Sun-Tzu because he believes in action rather than theory; He believes however that all strategies ultimately contain the seeds of their own destruction. In a disturbed and chaotic world a blind obsession with strategy is dangerous. He feels that business leaders should compare themselves to the American explorers Lewis and Clark, the first men to travel from the eastern United States to the Pacific Coast in the early nineteenth century. They had no maps and were travelling blind into the unknown. Like Lewis and Clark:

‘…[y]ou only know what direction you're headed in when you go from hilltop to hilltop looking around for the next hilltop. You can't chart the course all the way from beginning to end the way you might have been able to 20 years ago when things were stable…. But you also need to have the faith and the courage to be able to move forward from hilltop to hilltop and not get caught in the intellectual trap of thinking that you have to continue to leverage the same competences that you had one year ago or five years ago.

D’Aveni has acted as a consultant for scores of companies, many of them Fortune 500 companies. He sees himself as an importer and exporter of ideas, who is able to see trends in a range of industries which might be invisible to those in just one. His teaching materials are often unorthodox, including the application of the ideas of military strategist Carl Von Clausewitz and Mao Zedong to the US disposable diaper industry.

Essential Reading:

Hypercompetition, The Free Press, 1994

Strategic Supremacy, The Free Press, 2001

Beating the Commodity Trap, Harvard Business School Press, 2010.

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