They fail to emulate maverick companies, which have found radically new business models and created new markets; and they don't follow the alternative path of building strong, lasting brands such as McKinsey's that can fight off the trend towards commoditisation.
The result is not only that they are middle-of-the-road and well, a bit boring; it is also that they are forced to fight hard in crowded market spaces for their share and ultimately, says Taylor, this is an "unwinnable' strategy".
Both LaBarre and Taylor espouse what they term 'open-source innovation', a strategy by which companies actively seek the ideas and knowledge of the best minds in the world at large. Taylor points to the mining company Goldcorp, where the former CEO Rob McEwen managed, in his view, to revolutionise the business model in his sector.
"This is an industry where in the old days people would shoot someone who was encroaching on their space", says Taylor. McEwen, however, posted company data openly on the web and invited the best brains in the world to come up with their own drilling strategies. There was a prize of $500,000 to be divided up between 25 semifinalists and three finalists.
But the key point, says Taylor, is that McEwen was prepared to share 'competitive information' openly in a Linux-style model. He "overcame all the pressures to be secretive". And it made perfect sense, argues Taylor and LaBarre. McEwen's thinking was that: "We own 55,000 acres of land. If someone thinks they can mine for gold better than us, they can't sneak into our property and drill a $5 million hole."
It comes down to a common sense question: "Would you rather have thousands of smart people thinking on your behalf or not?" The answer seems obvious. Yet, being able to think this way takes a 'huge leap' in a leader's mindset, say the authors. The maverick mindset challenges the old notion that a CEO needs to think for the company.
The new thinking is that no-one has all the answers. Instead, a leader needs to be humble enough to admit he does not know everything (the authors refer to the CEO being able to 'walk in stupid' every day into work, open to new knowledge). The new mindset rests also on great generosity of spirit. McEwen, say the authors, feted the shortlisted winners of his competition at a conference in Canada where he urged others to tap into their knowledge too.
The disappointing fact, says Taylor, is that few companies successfully copy such models. And if they do, they lack the spark that informed the original version. The best model for successfully sustaining a maverick spirit, say the authors, is still South West Airlines, even though it is several decades old. This is an organisation that now flies more people in the US than any other airline, says Taylor. "It has a scrappy underdog mentality but it is still a part of the establishment."
The secret, say the authors, is to ensure you recruit leaders and a talent base that keeps the former maverick spirit alive. Whilst both LaBarre and Taylor readily acknowledge that there is no one model that is right for everyone, they do believe that the open-source innovative approach is a highly desirable one for companies that want to escape the grind of heavily populated market spaces.
LaBarre sings the praises of ING Direct USA, a subsidiary of the Amsterdam-based bank, the ING Group. The US company has built a new proposition around the value of saving money, a message of thrift that provides an antidote to the culture of heavy consumer spending.
Every day when workers arrive at its HQ, they walk past a white line that signifies they are entering a new business model, based on a new idea that drives everything. They have, for now, got a clear space for a new market based on something 'meaningful', says LaBarre.
Most companies don't have a Steve Jobs to drive innovation through sheer force of personality, says Taylor. Therefore, they need to learn the art of openness and knowledge-sharing to draw on other brains out there. At least, this is one way they can go.
The idea of open-source innovation has reaped the most "passionate" response from readers, says Taylor. So, this would suggest that others find its message appealing. The challenge of accepting that you are not the font of all knowledge will, however, be a tough one for many CEOs.
Interview by Morice Mendoza