Strategic Business Thinking with Michael Robert
Some years ago ‘The Chairman’ recommended Strategy Pure and Simple and I have finally gotten around to reading it.
In this excellent book, Michael Robert, originator of the phrase ‘strategic thinking’ lays out example after example of how companies have actually implemented strategy for great success.
Here are some notes.
A key impediment of success is inability to distinguish strategy from operations.
Key difference between winners and losers is the ability to think strategically.
Operations is not Strategy
Mooney said “At first everybody thinks they understand strategy, yet they confuse operations and the vision”
Increasing efficiency for how a company currently does things is operational and does not help determine what it wants to become in the future.
Operational effectiveness / efficiency is necessary, but not sufficient for strategic success.
Michael says “Many executives associate strategic thinking with long-term planning and consider operational planning as short-term. Our work indicates that nighty type of thinking is time-related”
The strategic thinking process determines what an organisation should look like in the future. Strategic planning systems help decide how to get there. (Theory of Constraints calls this Strategy vs Tactics.)
According to Michael Robert, strategy must come from the top (CEO Vision) and come down. Not bottom up.
The strategic thinking process is qualitative, not based on current quantitative performance.
Profit is the result of strategy, not its objective.
Jack Welch, former CEO OF GE explains leadership;
A leader is someone who can develop a vision of what he or she wants their business their unit, their activity to do and be. Somebody who is able to articulate to the entire unit what the unit is and gain through a sharing of the discussion listening and talking j- an acceptance of that vision. And then can relatnelessly drive implementation of that vision to a successful conclusion.
On Mission Statements Dilbert said “A mission statement is defined as ‘a long, awkward sentence that demonstrate4s mngemnt’w inability to think clearly’, e.g. We enhance stock holder value through strategic business initiatives by empowered employees working in new team paradigms.
The most important element of thinking strategically is a concept called ‘driving force’ or strategic drive.
How to construct a meaningful business concept
The first sentence must clearly describe the driving force of the organisation. Isolate that specific component that gives a distinctive advantage.
Second, delineate the line of demarcation between the nature of the products, customers, markets segments, and geographic markets that the driving force lends itself to and those to which it does not.
Finally, reflect future intent and present condition.
A distinctive strategy that makes the competition irrelevant. Sometimes, competition is irrelevant.
To identify a competitors strategy needs 2 elements. Competitive driving force and the business concept they are practicing.
Imitation strategy is weak. Attack competitors strengths and turn their strengths into market weaknesses (just as Subaru did to Volvo by saying ‘if you want an accident, get a Volvo, if you want to avoid accidents, get a Subaru).
Never compete against the market leaders established rules.
Neutralize the competitors strategy by attacking the competitors very reasons for existence. This is the Vince Lombardi school of management. He had teams spend the first 6 plays of the game attacking the very strengths of the competing teams. If they could crack that, they had the game won.
General Sun Tzu said
‘what is of supreme importance in war is to attack the enemy’s strategy’.
The best way is to change the rules of play within the market. TOC calls this a Mafia Offer. An offer the market can not refuse.
One CEO identified “I’m not interested in spending my money to make my competitors stronger”. Because attacking their weaknesses encouraged / motivates them to strengthen them.
Critical issues are the bridge to the strategic profile of the future and have 4 key areas: structure, systems/processes, skills/competences, and compensation.
Whilst pinpointing principles and highlighting false assumptions from academics and many other so-called strategic consultants, Michael Robert’s book Strategy Pure and Simple is recommended for anyone who wants or needs to consider business strategy at the highest levels.