John Hagel III, formerly a partner at McKinsey & Co. and now chief strategy officer for 12 Entrepreneuring Inc., has written the book on strategy -- literally. He is the coauthor of Net Gain: Expanding Markets Through Virtual Communities (Harvard Business School Press, 1997) and of Net Worth: Shaping Markets When Customers Make the Rules (Harvard Business School Press, 1999) -- two books that have shaped strategic thinking at countless firms. We asked Hagel to provide a reading list that focuses on Internet strategy. Here are his choices, along with his comments.
The Art of War, by Sun Tzu (Shambhala Publications, 1988). A fourth-century bc Chinese general offers his views on war. His emphasis on doing the least to accomplish the most foreshadows the importance of leverage in modern business strategy.
Blown to Bits: How the New Economics of Information Transforms Strategy, by Philip Evans and Thomas S. Wurster (Harvard Business School Press, 2000). The economics of information eliminate the traditional trade-off between wealth and reach, requiring a systematic redefinition of business strategy.
Complexity: The Emerging Science at the Edge of Order and Chaos, by M. Mitchell Waldrop (Simon & Schuster, 1992). Complexity theory will play an increasingly important role in reshaping business strategies. This book remains the single best introduction to that subject.
Information Rules: A Strategic Guide to the Network Economy, by Carl Shapiro and Hal R. Varian (Harvard Business School Press, 1999). The properties of information goods are different from those of physical goods. Here is a useful overview of the economics of information networks, plus an outline of the implications for strategy.
The Innovator's Dilemma: When New Technologies Cause Great Firms to Fail, by Clayton M. Christensen (Harvard Business School Press, 1997). Cautionary lessons on how conventional beliefs about strategy can lead companies to destroy value when they are confronted with disruptive technologies.
"Robust Action and the Rise of the Medici, 1400-1434," by John F. Padgett and Christopher K. Ansell, American Journal of Sociology (May 1993). A thought-provoking perspective on the success of the Medici family during the Italian Renaissance -- a period of discontinuous change much like our own.
Seeing Differently: Insights on Innovation, edited and with an introduction by John Seely Brown (Harvard Business School Press, 1997). In times of uncertainty, existing mental models can become a key roadblock to creative business strategy. This book -- especially the introductory essay by Brown -- explains how to overcome that roadblock.