# Competing Against Time **George Stalk** | [[Strategy]]  --- > "Customers can be a nuisance. First, they want what they want. Then, they want it when they want it. Finally, they expect the quality of the goods or services purchased to be perfect." Responsive organisations embrace demanding customers instead of fighting them. The weapon: time compression. Not "move faster" - redesign value-delivery systems to collapse waiting, eliminate batches, and respond in a fraction of the time competitors need. **Time is a strategic weapon equal to cost, quality, and innovation.** Firms that compress cycle times grow 3x faster and earn 2x the profit of slower competitors. Speed magnifies every other advantage. It enables variety (which drives growth), reduces cost (by eliminating waste), and creates customer lock-in (impatient customers are the most profitable). --- ## Core Ideas ### [[Time as Strategic Weapon]] Time is not just an operational metric. It's a basis of competition that amplifies productivity, quality, and innovation. Firms 3–4x faster than competitors grow roughly 3x the industry average and earn roughly 2x the profit. Fast-cycle companies charge premium prices and still outperform on growth. Responsiveness shifts competition away from price wars toward relevance and variety. > "Time is the secret weapon of business because advantages in response time lever up all other differences that are basic to overall competitive advantage." As time compresses, productivity increases, prices can rise (impatient customers pay premiums), risks fall (fresher products, faster feedback), and market share increases. ### [[Value-Delivery System]] Every company runs on a value-delivery system: the end-to-end process from customer order to delivered value. Most time is waste—waiting for batches, rework, or management decisions. The **main sequence** comprises activities that directly add customer value. Everything else is support. Small batch sizes, streamlined workflows, and continuous flow drastically cut delays. **Most operating problems appear downstream but originate upstream.** Fix them with upstream design, not downstream problem-solving. Time-based companies think of themselves as integrated systems. ### [[0.05 to 5 Rule]] Products and services add value only 0.05–5% of the time they spend in your system. The rest is waiting time. Waiting has three components: waiting for batch completion, waiting for rework, and waiting for management decisions. Reduce batch sizes—whether physical goods or packets of information—and you collapse the time lost. ### [[Variety Expansion]] **Variety expansion drives growth far more than price cuts.** After prices fall, customers have little more to look for. Expanding choice makes you increasingly relevant. Time-based competitors can offer variety profitably because they've eliminated the time-waste that makes variety expensive. Conventional cost accounting obscures the real cost of variety and delay by averaging overhead. --- ## Key Insights **The most attractive customers are those who cannot wait.** The least attractive are those who will wait, because the price they'll pay is low. Time-based businesses let competitors have the patient customers whilst they embrace the impatient ones. **Japanese productivity advantage lies in overhead efficiency, not direct labour.** With one-third the volume and three times the variety, Japanese manufacturers have only one-eighteenth the overhead employees. When one competitor is much more productive than another, the advantage very often resides in overhead. **Innovation means change, and change is measured by time.** Timely execution is as critical as ideas. Fast innovators involve all departments in development, not just skunk works. They use small, dedicated, decision-empowered teams with frozen specifications and continuous programme generation at market-driven intervals. > "Compressing cycle time sweeps away longstanding crutches, such as quality inspections and redundant data entry, which exist only because work isn't designed or done right the first time." Time compression exposes bottlenecks, eliminates specialists who cause delays, and forces first-time-right quality. **Time-based companies create more information and share it more spontaneously.** Fast response externally requires fast response internally—employees need real-time intelligence, not quarterly reports. --- ## Connects To - [[Playing to Win]] - Lafley & Martin on where to play and how to win complements Stalk on competing via responsiveness - [[Dead Companies Walking]] - Scott Fearon on companies that retreat instead of attacking - [[The Fifth Discipline]] - Peter Senge on systems thinking reinforces Stalk's value-delivery system framing --- ## Final Thought Most organisations treat time passively—it's just how long things take. Stalk reframes time as a strategic variable you can manipulate with the same rigour you apply to cost reduction. The 0.05 to 5 Rule is the starkest illustration. If your product only adds value 2% of the time it's in your system, 98% is waiting, batching, or rework. Attacking that 98% isn't about working harder—it's about redesigning the system. Small batches, continuous flow, organisation around the main sequence. These structural changes collapse cycle time exponentially. Customer segmentation by time-sensitivity changes the game. The most profitable customers are those who can't wait. They'll pay premiums for responsiveness. Patient customers only make money if your costs are rock-bottom—and competing on cost alone is a race to the bottom. Time-based competitors let rivals fight over patient customers whilst they own the impatient segment. Variety expansion over price cuts. Time compression lets you offer more variety profitably because you've eliminated the waste that makes variety expensive. After you cut price, customers have nothing left to value. Expanding choice makes you increasingly relevant, and relevance sustains growth.