Mastering Strategy Based in Book: "Strategy Rules" . By David…
Based in Book: "Strategy Rules" .
By David Yoffie
what about the people who develop corporate strategies?
How can executives develop their skills as strategists?
There’s no better way than to learn from the masters
David B. Yoffie, the Max and Doris Starr Professor of International Business Administration at Harvard Business School
Michael A. Cusumano, the Sloan Management Review Distinguished Professor of Management at the MIT Sloan School of Management
Autors of "Strategy Rules"
Book which looks at strategy lessons from three iconic CEOs from the computer industry: Bill Gates, Andy Grove, and Steve Jobs. What made you choose those three CEOs to write about?
It is a capability that leaders develop over time — and that these executives, whom we know as having made some great decisions, didn’t necessarily start off as such accomplished strategists.
Part of what enabled Grove’s development and transformation was his desire to learn new things — to continually go beyond his current capabilities.
He made a large personal effort to educate himself to understand what a consumer brand was and how consumer pull could work for an industrial products company like Intel.
He learned to expand his horizons.
IBM first came to him in 1980 for an operating system for IBM’s new personal computer, he sent them off to another company run by Gary Kildall. But when IBM came back to Gates, he clearly understood the opportunity that was ahead — to create the foundation for a whole new industry.
What Gates really learned about is execution and organization. He learned that he couldn’t personally run whole areas of the company. He understood coding and algorithms, which allowed him to go one-on-one with engineers, but he went outside the company to hire talented managers with different backgrounds and experiences to run operations and various product groups.
Always had great product instincts, but he had to learn to master strategy in the high-tech world
He recognized that you have to make deals with the enemy — in Apple’s case, Microsoft — and you have to delegate.
Strategy Rule #1:
Look Forward, Reason Back
As a strategist, you need to think about where you want your business to be two, three, five, seven years down the road and then figure out what are the priorities and boundaries of what you need to do as a company today to get there. You need to be able to anticipate customer needs — not just solving the customer problems of today, but what the customer is going to need tomorrow
You also need to anticipate what competitors will do and try to find ways to systematically build barriers to imitation and barriers to entry to reduce the likelihood that competitors will take away your advantage down the road
You have to be able to think about
how whole industries may change.
Strategy Rule #2: Make Big Bets, Without Betting the Company
All three executives made big bets, but they never really bet the company. They always hedged those big bets.
Strategy Rule #3: Build Platforms and Ecosystems — Not Just Products
These three executives set the intellectual foundations for understanding platform strategy and how it differs from product strategy
Gates states very clearly — and we have the quote in the book — that he knew from day one, when Microsoft structured its deal with IBM to allow Microsoft to license DOS to other companies, that there would probably be a clone industry for personal computers, just like there had been for the IBM mainframe
Strategy Rule #4: Exploit Leverage and Power — Play Judo and Sumo
If you’re going to be a great strategist, you’ve got to be able to execute at the tactical level. The things that you do every day, day-to-day with your customers, with your competitors, and with your partners become critical in your ability to execute your longer-term strategy. You have to be both clever and tough at the same time
The cleverness is the judo idea — trying to find ways to take advantage of your competitors’ strengths and turn them to your advantage, to find ways to avoid head to-head struggles with your competitors at times when you’re not necessarily strong enough to compete that way.
Strategy Rule #5: Shape the Organization Around Your Personal Anchor
This was the hardest rule to describe. We try to explain why these three CEOs were effective at execution. Our answer was that each had a stake in the ground — a personal anchor — that helped them grow their companies, focus strategy, and hire people around.
Another aspect of a personal anchor is a bit paradoxical: You want to dive deep into the things you’re really good at, but at the same time stay at a high level and always keep the big picture in mind.