Business Strategy Brief

 Like you, I have been in class all week.  As part of a leadership development program, Oracle has sent me to University of Chicago Booth School of Business to study strategy. Learning is a lifetime journey and my hope is that you will forever be curious to learn new things - even on topics which you think you have mastered.    My focus this week is to expand my understanding of how strategy works in business and I thought it might be good idea to share some of these concepts with you. 

There are hundreds of books on the topics of strategy.  One seminal piece of work for me was Disciplines of Market Leaders by Michael
Treacy and Fred Wiersema.  They describe companies strategies falling into one of three primary buckets – customer intimacy, product excellence or operational efficiency.  Customer intimate companies know their customers forward and backwards.  They may not offer the best product but they lead with service.  Product excellent strategies focus on innovation and developing a premium brand with superior quality. Operational excellent companies are typically low cost competitors. 

In addition to strategy, we have been studying  technology adoption lifecycles.  In 1995, I had the distinct opportunity to work with The Chasm Group.  This was a group of marketing strategy executives led by Geoffrey Moore who led a massive body of research on the adoption cycles of technology across a broad range of industries.  Not just software but going back to automobiles, telephones, TV and the Internet.  His signature book is called:  Crossing the Chasm.  This is a must read for marketing majors. 

This week we spent time with Professor Mark Knez.  He is an outstanding strategy leader and runs the program at Chicago Booth.  Here are a few cliff notes from 24 hours of case studies and lectures – phew. 

1.     Business should shift from selling products to selling customer outcomes.  Very difficult if you don’t know the work of your customer. 

2.       Large companies can be disrupted by business model innovation at the low-end.  Think about what Netflix did to Blockbuster.  Clayton Christiansen of Harvard wrote the key book on this topic – The Innovators Dilemma.

3.       New Business Ventures must focus on customer segments who are either over-served by existing suppliers or neglected entirely.

4.       Incumbents can be overtaken by organizational rigidity caused by internal politics, complacency or fear of product cannibalization – it’s always best to keep the cannibal in the family.

5.      You must understand that value chains are dynamic and constantly changing.  A value chain is explained by Harvard professor Michael Porter in several publications and books.

Until next time. Hope classes are going great and you're meeting many exciting new friends.