A Bad Strategy is Superficial
A bad strategy is formalism, characterized by four fundamental traits: empty rhetoric, obfuscation, strategy should not be a mere accumulation of grandiose terms; failure to confront challenges, mistaking goals for strategy; sub-goals that are irrelevant or unrealistic.
A Good Strategy is Unexpected
A good strategy is both surprising and reasonable. For example, in 1997, Steve Jobs' turnaround strategy upon returning to Apple involved drastically reducing the product line and focusing on a few profitable products. Trying to do everything and believing everything is important is equivalent to believing that nothing is important. Good leaders need to know not only what to do but also what not to do.
Charles Handy: The Second Curve
When you know where you should go, it is too late to go there; if you always keep your original path, you will miss the road to the future.
Charles Handy: The Second Curve
When you know where to go, it is often too late; if you always stick to the original path, you will miss the road to the future.
Four Steps to Rational Decision-Making
Ordinary people have few opportunities to make decisions in life and work, and it is also difficult to practice and improve their decision-making skills. Most people's decisions rely on intuition, while rational decisions depend on processes. The book "Decisive" proposes a four-step process for rational decision-making — to increase the probability of making the best decision, we need to 1. broaden options, 2. test assumptions with facts, 3. step outside ourselves to see ourselves, and 4. prepare for wrong decisions.
Good Strategy and Bad Strategy (Part 1)
A good strategy is often surprising but reasonable. A bad strategy is a formalism. Here are four hallmarks to detect bad strategies: fluff; failure to face the challenge; mistaking goals for strategy; bad strategic objectives.
Good Strategy and Bad Strategy (Part 2)
Bad strategies are easier to be made in terms of three facts: it’s painful to make a choice; people like to follow templates without thinking; people tend to misbelieve that a positive attitude and a strong desire can earn them everything they want.
Good Strategy, Bad Strategy
Good strategy relies on three elements, along with focusing limited energy on the points that yield the most effective results, making it both unexpected and reasonable; bad strategy is formalism, stemming from people's reluctance to make choices, a preference for templates, and a fantasy of human dominance over fate. Therefore, we must be adept at thinking critically, maintaining our views, and applying external perspectives.
How to Predict Trends?
To make predictions, one needs to deeply understand the past and present, see beyond the surface to grasp the essence, and thus be able to extrapolate into the future. Unfortunately, most people can only see the present. There are two ways to gain a strategic high ground that is easy to defend and hard to attack: independent innovation and riding the wave of change. Common trends include skyrocketing fixed costs, deregulation, prediction biases, incumbent effects, and attractor states.
Mark Sellers: Technology Is Not an Economic Moat
An economic moat refers to a company's ability to maintain a competitive advantage over its rivals, protecting long-term profits and market share. Elements that do not constitute an economic moat include: technology; extensive reading; master's degrees or other degrees from top universities; experience. Elements that constitute an economic moat include: economies of scale and scope; network effects; intellectual property; high customer switching costs.
Mark Sellers: technology is not an investor's economic moat
An economic moat is the ability to maintain advantages over its competitors. It can provide protection for business’ long-term profits and market share. Technology is not an economic moat as it will always be duplicated.
Stratechery: Why amazon acquired whole foods?
Driven by the goal to take a cut of all economic activity, Amazon decides to develop grocery services. However, its grocery business has no first-and-best customer due to cost disadvantage. By acquiring Whole Foods, Amazon is buying more than a retailer - it’s buying a customer.
Stratechery: Why Did Amazon Acquire Whole Foods?
Amazon's ambition to gain a share of all economic activities led it to enter the grocery service market. However, based on an analysis of Amazon's existing strategy and the cost disadvantages in fresh produce, it does not currently have a first and best supplier in grocery. Acquiring Whole Foods allowed Amazon to not only buy a retailer but also gain a customer for its existing business.
The Advantages and Disadvantages Change with Perspective
Things themselves are neither good nor bad; it all depends on people's thoughts. Just like the legend of David and Goliath, the story of Walmart defeating Kmart, and Andy Marshall's strategy against the Soviet Union during the Cold War arms race, advantages and disadvantages can be transformed. When we discover our shortcomings, instead of feeling frustrated, we should change our perspective and approach.
The Company's Technology and Market Quadrant Diagram and Gravitational Directions
The quadrant diagram of market and technology determines the company's market position. With the inflation of technology, excellent technologies tend to become mediocre, and mediocre companies adopt excellent technologies; companies with a market will have a larger market, while those without a market will have a smaller one.
The Core of a Good Strategy
The three fundamental elements of a good strategy: Diagnosis - simplifying the problem and identifying challenges; Guiding Policies - how to respond to challenges; Coherent Actions - a series of actions that mutually reinforce each other under the guidance of principles.
The Core of a Good Strategy: Coherent Actions
Coherent and complementary actions refer to actions that directly support each other to create synergy; strategic collaboration can be designed and is centrally imposed on the system; centralization has its pros and cons, as the interests of various sub-organizations differ; organizational collaboration is time-consuming and labor-intensive, aiming for maximum efficiency and just the right coordination as the outcome.
Where Does the Energy of a Good Strategy Come From?
The key to an effective strategy lies in channeling limited energy into the points that can generate the most impact. Common sources include: leverage; proximate objectives; chain-link systems; design; focus strategy; growth; advantage; external change; inertia.
Why Amazon made Kindle?
In 1997, Eberhard asked Amazon’s investment for an eBook prototype. Amazon learned from iTunes and iPad and created Kindle. The reason why amazon succeeds lies in huge negotiating leverage, user acquisition channel and great user experiences.
Why Are There So Many Bad Strategies?
Three reasons for bad strategies: making choices is painful; people dislike thinking and prefer templates; people often believe that human will can overcome all, thinking that attitude determines everything.
Why It Is So Hard to Make a Good Decision
The spotlight effect: People only see what they see and want to see, making it hard to step outside of their own perspective. Therefore, it's important to frequently ask oneself, "Why do I think this way?" There are four major challenges in the decision-making process, along with the following solutions: broaden options; test assumptions with facts; view decisions from a distance; prepare for mistakes.