The Strategist

Key Concepts

Leadership and strategy are inseparable

“Many leaders today do not understand the ongoing, intimate connection between leadership and strategy. These two aspects of what leaders do, once tightly linked, have grown apart. Now specialists help managers analyze their industries and position their businesses for competitive advantage, and strategy has become largely a job for experts, or something confined to an annual planning process. In this view, once a strategy has been identified, and the next steps specified, the job of the strategist is finished. All that remains to be done is to implement the plan and defend the sustainable competitive advantage it has wrought. Or at least that’s the positive take on the story. But, if this were so, the process of crafting a strategy would be easy to separate from the day-to-day management of a firm. All a leader would have to do is figure it out once, or hire a consulting firm to figure it out, and make sure it’s brilliant. If this were so, the strategist wouldn’t have to be concerned with how the organization gets from here to there—the great execution challenge—or how it will capitalize on the learning it accumulates along the way.” (p. 12)

“What’s been forgotten is that strategy is not a destination or a solution. It’s not a problem to be solved and settled. It’s a journey. It needs continuous, not intermittent, leadership.” (p. 13)

The Myth of the Super-Manager

“No one respects timid, passive managers. Bold, visionary leaders who have the confidence to take their firms in exciting new directions are widely admired. Isn’t that a key part of strategy and leadership? In truth, it is. But the confidence every good strategist needs can readily balloon into overconfidence. A belief that is unspoken but implied in much management thinking and writing today is that a highly competent manager can produce success in virtually any situation. One writer calls this ‘the sense of omnipotence that plagues American management, the belief that no event or situation is too complex or too unpredictable to be brought under management control.’” (p. 23)

“Ironically, the most successful and admired leaders, the titans of business, understand the profound significance of competitive forces outside their control. They know the crucial importance of picking the right playing field. They don’t buy the management myth that a truly good manager can prevail regardless of the circumstances.” (p. 30)

Begin with Purpose

“As you mull the idea of corporate purpose, you may make the connection to the more familiar “competitive advantage.” In fact, the terms purpose and competitive advantage could be used in conjunction with each other, but competitive advantage places the focus on a firm’s competition. That’s important, but it’s not enough. Leaders too often think the heart of strategy is beating the competition. Not so. Strategy is about serving an unmet need, doing something unique or uniquely well for some set of stakeholders. Beating the competition is critical, to be sure, but it’s the result of finding and filling that need, not the goal.” (p. 46)

“A good purpose is ennobling.” (p. 49)

“A good purpose puts a stake in the ground. It says “We do X, not Y.” “We will be this, not that.” It’s a commitment.” (p. 50)

“If your purpose does not preclude you from undertaking certain kinds of work, then it’s not a good purpose. Purpose, like strategy, is about choice, and a real choice contains, if only implicitly, both positive (“We do this”) and negative (“By implication, then, we don’t do something else”) elements.” (p. 50)

“A good purpose sets you apart; it makes you distinct.” (p. 51)

“Above all, a good purpose sets the stage for value creation and capture.” (p. 52)

“The acid test, then, of a purpose is this: Will it give you a difference that matters in your industry? Not all differences are equal. You need a difference with real consequences.” (p. 53)

Strategists need to ask really tough questions of themselves

“If your company disappeared today, would the world be different tomorrow?” (p. 56)

“If you don’t have that difference, nobody will mourn you when you’re gone. And if they won’t miss you then, how much do they need you now?” (p. 56)

Strategy is about an interlocking system of decisions that create value

THE STRATEGY WHEEL (p. 91)

Keep It Vibrant

“It is simplistic—dangerous, even—to think that the bulk of strategy work can be done at the beginning and that all a strategist has to do is get that analysis right. Great firms—Nike, Toyota, and Amazon, to name a few—evolve and change. So too do great strategies. No matter how compelling, or how clearly defined, no one strategy is likely to be a sufficient guide for a firm that aspires to a long and prosperous life.” (p. 110)

“Zeroing in on one competitive advantage and expecting it to be sustainable misrepresents the strategist’s challenge. It encourages managers to see their strategies as set in concrete and, when spotting trouble ahead, to go into defensive mode, hunkering down to protect the status quo instead of rising to meet the needs of a new reality. To be sure, competitive advantage is essential to strategy, and the longer it lasts, the better. But any one advantage, even a company’s underlying system of value creation, is only part of a bigger story, one frame in a motion picture. It is the need to manage across frames, day by day, year over year, that makes a leader’s role in strategy so vital.” (p. 130)

“Achieving and maintaining strategic momentum is a challenge that confronts an organization and its leader every day of their entwined existence. It’s not one choice a strategist must make, but multiple choices over time.” (p. 138)

“As we learned in previous chapters, great strategies are systems, with their own integrity and internal harmony among the elements (think of how De Sole rigorously linked everything he did to his purpose, from product line on up to management culture). Often, you will be able to adapt while keeping your purpose intact. But you cannot confuse the integrity of a system with rigidity. Your system of value creation has to be flexible and adaptable. Like your strategy, it too has to evolve over time, and respond to—or better yet, anticipate—changes in the business environment or within the firm itself that can make its elements obsolete.” (p. 139)

Quotables

“Having seen hundreds if not thousands of such strategies in their initial form, what is clear to me is this: Many leaders haven’t thought about their own strategies in a very deep way. Often, there is a curious gap between their intellectual understanding of strategy and their ability to drive those insights home in their own businesses.” (p. 11)

“You will likely have to make a number of assumptions in building your wheel. Check them carefully! People in all professions go astray because they’re operating on untested assumptions. In strategy, these are often a recipe for disaster. Be ruthless in challenging what you think you know.” (p. 95)

“Managers who get caught in the trap of overwhelming demands become prisoners of routines,” wrote Heike Bruch and Sumantra Ghoshal, in A Bias for Action. “They do not have time to notice opportunities. Their habituated work prevents them from taking the first necessary step toward harnessing willpower: developing the capacity to dream an idea into existence and transforming it into a concrete intention.” (p. 135)

“If a leader shortchanges questions of strategy, an organization and everyone in it will suffer. If a leader shortchanges the team and fails to clearly communicate that strategy, listen to others, or inspire them to get on board, the outcome will be equally bad. As a strategist, that means your ability to communicate—and to connect with others in the organization—is as vital to your success as anything else you do.” (p. 143)

“Articulating and tending to a living strategy is a human endeavor in the deepest sense of the term. Keeping all the parts of a company in balance while moving an enterprise forward is extraordinarily difficult. Even when they have substantial talent and a deep appreciation for the job, some leaders ultimately don’t get it right. Their legacies serve as sobering reminders of the complexities and responsibilities of stewardship. On the other hand, it is exactly these challenges that make the triumphs so rewarding.” (p. 150)