Why on Earth
The mysteries of seemingly smart strategy decisions
Some of these essays are about competitive strategy and strategic thinking; some are not. “Are Capitalists Copping Out?” “We Will Play Soothing, Uninterrupted Music While You Wait.” “The Formerly United States of America.” And more.
How do upstarts win? Why do incumbents lose? Upstarts can only win if incumbents let themselves lose.
There’s a theory of competing behind the baloney on a company’s box of cereal. It seems not to fit the company’s number-one corporate value: “We do the right thing, all the time.”
J.C. Penney doesn’t have the performance it wants, Mr. Johnson has been tarred and “pundited” as a failure, employees and investors are dispirited, and customers are baffled. Help wanted: CEO.
800,000 subscribers left Netflix after the company raised its prices. That tells us Netflix adopted a bad strategy. Or does it? Fourteen reasons why Netflix was wrong, or not.
When strategists choose bad strategies, strategies fail. That sounds obvious, except no strategist purposely chooses a bad strategy. Strategists are smart, experienced, industry-savvy, data-rich, and highly motivated to succeed. Yet smart strategists can and do choose bad strategies, and bad strategies fail.
Those who are exquisitely aware of the value they bring to decision-making wonder why they struggle to get decision-makers to listen. I have suffered from this. So have you. Pretty much all humans above the age of one know that frustration. Oh when will those decision-makers ever learn?
No stunning message about strategy this time. Just a brief moment of merriment. Hope you enjoy.
In business we expect decisions to come from careful analysis in which experts lay out the options, quantify the costs and benefits, and make the right choices. So it may seem perplexing when two senior executives, in symbiotically linked companies, publicly and decisively disagree on a key decision.
Businesses tend to overtighten. They do it because they’re led there by simple, persuasive logic, which we can boil down to this: it is cheaper to print “do not overtighten” on the instructions than it is to supply products that can withstand formidable strength.