Russell McGuire

Fusion Strategy is a new book (releasing today) by Vijay Govindarajan and Venkat Venkatraman. It lays out an ambitious strategic roadmap for leaders in asset-heavy industries to follow in positioning their businesses for long-term success in the connected intelligence future.

For the past decade I’ve been writing about the Connected Intelligence revolution. I define it as the collision of advanced data processing technologies with massive amounts of available data, resulting in new ways that we see the world, anticipate the future, make decisions, and take action. This revolution has fundamentally transformed many industries, and with the emergence of Generative AI, those disruptions have only accelerated.

So far, the most significant impacts have been felt in what the authors of Fusion Strategy call asset-light industries like entertainment and advertising. This book is for the asset-heavy industries that undoubtedly see disruption heading their way.

There’s so much that I like about this book. It is very well organized, introducing four “vectors of value” early that become the overall organizing framework for the rest of the book, and using a consistent structure to the four corresponding chapters that make up the core of the work. The authors provide specific considerations, decisions, and actions for readers to pursue in their businesses, and they use examples of what real companies are doing in representative asset-heavy industries.

While I agree with the direction provided by the authors, I question how many incumbent leaders in asset-heavy industries will actually be able to follow their guidance. I doubt that the cultures, investors, or unions of these companies will allow most of them to fundamentally transform themselves as outlined in the book. Thankfully companies like John Deere (currently) and IBM (in the past) have demonstrated that it’s not impossible.

Fusion Strategy is a relatively short book (about 180 pages), made up of 9 chapters broken into three parts. 

The first part, titled “When Steel Meets Silicon”, provides the conceptual foundation for the approach the authors lay out in the remainder of the book. Some of the concepts they introduce may be familiar to readers and some will be new, but this section brings it all together into the foundation on which they build. 

Part two, titled “Vectors of Value”, has one chapter on each of these four potential strategies. This is the core of the book. Each chapter follows the same format:

– An introductory section using a real world example to describe the potential impact of the strategy.

– A section on the “Paradigm Shifts” companies need to achieve in pursuing each strategy.

– A section titled “The Journey Ahead” which walks through four sequential steps companies must pursue in the given strategy. 

– A “Checklist” for each strategy — outlining the key questions companies will need to answer in pursuing the strategy.

The final section of the book is titled “Conquering the Fusion Frontier” and only has one chapter which summarizes the entire book into five principles with two recommended best practices for each. 

Click the link below for my full review with more details on each section.

While I’m skeptical that many industrial leaders will follow the path outlined by Govindarajan and Venkatraman, I believe they should. I strongly recommend this book to any leader in an asset-heavy industry.

Read the full review here.

Sound decisions require an accurate and up-to-date understanding of the environment in which those decisions are being made. In the business world we give this the fancy name of “a situation assessment”.

In the Bible Jesus used a couple of analogies to teach the importance of “counting the cost” of your decisions, saying “For which of you, intending to build a tower, does not sit down first and count the cost, whether he has enough to finish it — lest, after he has laid the foundation, and is not able to finish, all who see it begin to mock him, saying, ‘This man began to build and was not able to finish’? Or what king, going to make war against another king, does not sit down first and consider whether he is able with ten thousand to meet him who comes against him with twenty thousand? Or else, while the other is still a great way off, he sends a delegation and asks conditions of peace.”

An honest situation assessment similarly considers the internal (in Jesus’ example — the status of your resources) and the external (e.g. the relative strength of your competitors) to avoid making a foolish decision.

Developing a comprehensive situation assessment can be a lot of work. Big companies often have teams of people with situation assessment in their job description and these teams produce formalized situation assessment documents that are referenced across the organization. Small companies often don’t have the resources to formally assess the situation and produce a comprehensive document, but it’s still really important to at least informally think through all of the same factors before making important decisions. 

The product of your assessment can take one of many different forms. The simplest and probably most popular is the SWOT (Strengths, Weaknesses, Opportunities, and Threats) framework which can summarize the situation on a single page. In contrast, when serving as a strategy executive for large corporations, my teams would often take the first 3 months of the annual planning cycle to assess various dimensions of the external and internal environment resulting in a 100+ page PowerPoint deck informing the leadership team of key topics and trends that would shape our planning for the year.

In the article linked below I walk through:

– What is a Situation Assessment?

– When do you use it?

– How do you use it?

I also provide links to other relevant resources.

Hopefully this is helpful to you as you lead your teams and make wise decisions. Let me know if you ever need a hand.

Read the full article here.

A good strategy is essential to achieving any significant objective. When you know that you need to bring about something hard, it is wise to think through the strategy that you will use to realize it, and the Purpose Pyramid is a great tool for doing so.

A good strategy:

• Is a framework with depth and dimensionality to deal with uncertainty
• Provides long-term vision
• Defines the goal being pursued
• Sets a direction forward
• Identifies critical near-term objectives
• Communicates all of the above clearly and coherently, and therefore
• Enables decision making

The Purpose Pyramid specifically captures a strategy in 5 key elements:

• Purpose: A clear statement of what you are trying to achieve
• Pillars: The three key accomplishments required to achieve the purpose.
• Plans: The three specific activities under each pillar that you are currently pursuing to accomplish that pillar.
• Principles: The non-negotiable values that will not be compromised in achieving the purpose. The ends do not justify the means.
• Panorama: The environment within which the strategy is being pursued.

In the article linked below I explain, for the Purpose Pyramid:- What It Is- When to Use It- How to Use It
And I provide additional resources for learning more about this valuable tool.
This article is part of a series I am writing on the hard decisions that leaders face and the tools that can help.
Let me know if there’s a hard decision that you are facing. I might have some insight in how best to approach it.
You can read all about the Purpose Pyramid here.

Being a great leader isn’t easy. It involves mastering many different dimensions of leading. Ultimately being a great leader means being the person that others want to follow. Among other things, that means they trust you to make hard decisions well.

You act with integrity. You carefully weigh all implications of any decision. You consider all available information, but you don’t over-analyze. You make decisions and act with confidence and authority. When you make a bad decision (it happens to all of us), you acknowledge it early; you own it; and you take corrective action.

Over the next several months I want to look at 10 of the hardest decisions business leaders face. As I look at each one, I will share resources that can help, including tools/frameworks, books, case studies, and other articles. Along the way I will also write new articles introducing the tools and frameworks that I’ve found most useful in making those hard decisions. As I build out this collection of resources I will also make them available at my SDG Strategy Lab website.

But before we dive into those ten specific decisions, let’s first discuss, in general, how to make hard decisions. 

Whenever I’m approaching a hard decision, I step back and apply a simple three step process:

1. Clearly define the goal. What positive outcome do we expect if we make the decision well?
2. Choose the right decision framework. How can we evaluate different options in a structured way that aligns with the decision being made?
3. Answer the essential questions. To complete the evaluation, using our selected framework, we will need to do some focused work.

As simple as they sound, none of those steps should be taken lightly or flippantly. They require careful consideration, seeking the best wisdom available. (For me, that includes praying for God’s wisdom.) Sometimes it pays to bring in outside, impartial help to lead the process, ask hard questions, and challenge assumptions.

Over the next few weeks I will introduce you to a few tools and frameworks that I have found to be generally helpful for all kinds of hard decisions.

Read my full discussion of this topic here including the 10 hard decisions, the tools/frameworks we will look at first, and suggested reading.

I hope this new discussion will be helpful to you as you wrestle with hard decisions in your own business.

A couple of months ago I reviewed The Agile Pocket Guide in hopes that it would provide a good executive-level introduction to Agile development. At the time, I said that I was disappointed that the book wasn’t designed to serve that purpose. So, I decided to pick back up The Art of Agile Development, a book I had previously bought and referenced at times in my consulting work.

The Art of Agile Development by James Shore is NOT a “pocket guide”. It is a hefty 500 pages of rich content, broken into four parts structured around the Agile Fluency Model. In the Preface the author explains that the book is designed to be used both as a reference book as well as to read cover-to-cover. He spends 6 paragraphs explaining how different audiences should approach the book. He suggests that managers and executives who want “to understand how Agile can or should work in your company” read Part I. Since that’s my audience, the review linked below focuses on Part I and the first couple of chapters in Part II to give a sense for the rest of the content in the book.

Part I is titled “Improving Agility” and provides an introduction into how to get started with Agile development. The other three sections of the book are organized around the Agile Fluency Model, which identifies four “zones” of agile maturity. The Focusing Zone is all about the fundamentals of establishing the team dynamics and values behind Agile. The Delivering Zone is focused on technical excellence and designing code to respond to frequent changes. The Optimizing Zone is about being highly responsive to changing market conditions and being able to outmaneuver the competition. The author describes the Strengthening Zone as “largely speculative: a possible future for Agile.” Part II of the book is about the Focusing Zone. Part III is about the Delivering Zone. Part IV is about the Optimizing Zone. The final chapter, titled “Into the Future” touches on the Strengthening Zone.

Overall, The Art of Agile Development is a detailed guide to implementing Agile in an organization. Those charged with doing so will benefit greatly from the experience, perspectives and resources the author brings to guiding them through the journey. Others in the organization will benefit from the strong introduction to Agile in Part I, and the availability of Parts II-IV as a future reference as they become increasingly exposed to the concepts and practices that make Agile special. 

Part I answers most of the questions an executive new to Agile will have.

If that’s you, click here for my detailed review and summary of that part of the book.

Yesterday I received another reminder of the dramatic impact of the Mobility Revolution on how we live our lives. My wife received a text about my brother-in-law’s attempt to have his landline telephone service repaired. Although he’s had a cellphone for years, he wanted to keep his landline. 

The home has been in the family and has had continuous telephone service for over 50 years, first provided by AT&T. In 1984 AT&T was forced by regulators to separate out the company’s local telephone operations and so the local provider changed names to Southwestern Bell Telephone. After Congress passed the Telecom Act of 1996, the various divested Regional Bell Operation Companies began reconsolidating. Southwestern Bell renamed itself SBC Communications to sound more like a national (not regional) company. The company acquired Pacific Telesis in 1997, Ameritech in 1998, and BellSouth in 2006. In 2005, SBC Communications acquired AT&T, it’s former parent company, and renamed itself back to AT&T. Although the names have changed, the phone service has been continuously provided by the same operating entity over all those decades.

The quality of service, however, has degraded significantly over the past few years and has become almost unusable. My brother-in-law called AT&T to ask if anything could be done to fix the static on the line. He was informed that his line was the last one being served out of the pedestal in their neighborhood and AT&T (understandably) wasn’t willing to invest to maintain quality service in that location. Instead the company has provided my brother-in-law with a wireless analog telephone adapter (ATA) called the AT&T Phone — Advanced (AP-A). It connects wirelessly to the AT&T cellular network and has a normal RJ-11 telephone jack that he plugs his telephone into. This seems like a reasonable solution that hopefully will prove reliable service for decades to come (at least until wireless network upgrades force a technology update).

Today, it may seem more shocking to us that someone still wants a landline phone, but that is just an indication of how quickly things have changed. My book on the Mobility Revolution was published in 2007. At that time at Sprint we had been tracking “cord cutting” for a few years, but it was still seen as a fringe activity. Less than 20% of households had given up their landline, and most people couldn’t imagine ever doing so.

Today the script has flipped. The Federal Communications Commission (FCC) reports that residential reliance on traditional wireline telephone service fell 71% between December 2008 and June 2017. Today, according to CDC data, more than 73% of Americans live in a home without a landline and only 2% rely solely on a landline. In the 4th quarter of 2023, AT&T reported $22B in mobility revenues and only $3B in consumer wireline revenues. In 2022, the company announced plans to cut its copper footprint by 50%, pushing those customers onto either fiber-based or wireless connections. My brother-in-law is just one of those impacted.

As recently as 20 years ago, we simply assumed that there would always be a telephone on the wall or countertop in almost every home. We regularly went to Radio Shack if we needed the materials to run a new line or replace a phone jack. We went to Circuit City to buy an answering machine to plug into that phone jack. We marveled over cordless handsets from companies like V-Tech. But things change. Some companies anticipate the changes and thrive. Others don’t and fail to survive.

What changes are coming that will impact your industry and your business? Do you need help envisioning the future? Let’s talk!

Read this article at ClearPurpose.

I really enjoyed Jordan Raynor’s previous book, Redeeming Your Time, and gave it a glowing review. It was well written, founded in Biblical truths, yet very practical today (leveraging/responding to modern technologies), and Raynor is funny and easy to read. When I saw that he was coming out with a new book that he wrote “to help you see how 100% of your time at work can matter for eternity and not just the 1% of time you spend ‘sharing the gospel,’” I knew I had to read it.

The Sacredness of Secular Work releases today and is broken into two parts. The first part introduces three theological concepts that challenge what the author believes most churches teach. The second part teaches four ways that our work can have eternal impact.

Click the link below to read my full review, but bottom line, the book offers valuable practical ways that we can be intentional in making our daily work have more of an eternal impact. In fact, I might go so far as to say that this book is essential reading for anyone interested in better integrating their faith into their work. Unfortunately, nearly half the book is spent putting forth theological arguments seemingly meant to be controversial. While I think I largely agree with the author on most theological points, I fear that the positioning and posturing of this theological content may keep many readers from ever benefitting from the very useful practices taught in the second half of the book (and in the downloadable accompanying workbook). 

In other words, if you care about integrating your faith into your work, read this book, and don’t let the first half scare you away.

Read my full review here.

Over the holiday season I had some time to work on my “side gig” — SDG Games — my business designing and selling educational board and card games for the glory of God. I originally launched SDG Games in February 2021 with the release of Journeys with Jesus. Over the past three years I’ve launched an additional 4 board and card game products and a free web-based game.

Heading into 2024, the SDG Games business faced a number of challenges:

– The games are too expensive and delivery times are too long

– Margins are incredibly thin

– Product awareness is very low in the target market

If a client described a business like this to me, my natural response would be “why are you even in this business?” To answer my own question — most of the games I’ve created first for me — to help me learn specific Biblical truths. I enjoy designing them, enjoy playing them with family and friends, have learned a lot, and want other families to be similarly blessed by the games. Given my commitment to my main consulting business, I can’t spend too much time on SDG Games, but I do want it to operate better and bless more families.

With that context, I put on my consultant’s hat and set about solving the performance challenges while keeping it a simple business that won’t distract me from my main focus on consulting. Over the past few weeks I’ve specifically focused on improvements in three areas:

– Production

– Distribution

– Marketing

Click the link below to read the full article, but the short version of those improvements involve:

– a major refresh of the flagship game, 

– a new production approach for a brand new game, 

– a new supplier, 

– a new website, and 

– a new online store. 

It was a lot of work over a few weeks but I think it sets the business up to be more successful without requiring much of my attention.

Click here to read more about how I approached the challenges.

Over the past few months, I’ve told the stories of various companies that have successfully launched new categories that fundamentally improved how industries operate and the world works. I thought it might be interesting to take a look at a company in the midst of launching a new category today.

Electronics can’t work without a healthy “heartbeat”. That heartbeat is in the form of clock signals that tell processors when to execute the next instruction, tell networking equipment when to send the next packet, and place highly precise timestamps on data so that it can be correctly interpreted and correlated by intelligent software. For nearly a century this heartbeat has most often been provided by a quartz crystal oscillator.

However, the Connected Intelligence revolution has placed tremendous new demands on electronics, demands that quartz crystals are struggling to meet:

– Everything is getting faster. 

– Today, as connected intelligence is built into every type of product, processors and networking (with their clock sources) are increasingly expected to operate reliably in harsh environments, with wide and rapid temperature swings, constant vibrations, and regular shocks. 

– Increasingly Artificial Intelligence-driven systems are making life-and-death decisions based on data collected from a variety of distributed systems. 

In 2003 Aaron Partridge and Markus Lutz saw the opportunity to build a better resonator and timing oscillator using MEMS technology. They decided to name their company SiTime because they were going to build timing products entirely using silicon (Si is the scientific symbol for silicon) and semiconductor processes. Like most disruptive technologies, their first products weren’t nearly as good as the best oscillators on the market. But, while quartz-based oscillators were barely improving (constrained by the industrial-age processes around physically cutting crystals), SiTime’s products were improving much more rapidly (benefitting from the computer-age/Moore’s Law advances in semiconductor technology).

Click here to read how, over the next two decades, SiTime continued to improve MEMS-based oscillators so that they are at least at parity with quartz oscillators on all the factors that have traditionally mattered most to engineers and significantly (2x or more) outperform on the factors that matter most in the Connected Intelligence revolution: size, resilience, reliability, and stability.

Today SiTime is in the midst of launching the Precision Timing category. Click here to read how they have:

1. Defined the problem, the solution, and the category.

2. Launched the category with a “lightning strike”.

3. Are continuing to lead and expand the category.

Are you redefining your industry? Do you need help defining and launching a new category? Reach out, maybe I can help.

Read the full story here.

I started ClearPurpose in 2020, making 2023 our 4th year. Each year I like to look back and see which of the ClearPurpose articles caught your attention. I specifically look at the full catalog and identify the articles that got the most attention in this calendar year.

It’s fascinating to me how balanced your favorite articles are. There are either 2 or 3 from each of the 4 years we’ve been publishing. There also are a range of different types of articles: 4 book reviews, 2 stories of companies working through strategic decisions, 2 articles about specific tools used in strategy work, and 2 articles more broadly covering strategic topics.

With that brief overview, here’s the countdown of your top 10 articles of 2023, with a brief snippet from each:

#10: Book Brief: Fall in Love with the Problem, Not the Solution (2023)

Fall in Love with the Problem, Not the Solution is full of insights and advice for entrepreneurs based on one man’s experience at some very successful startups. There’s a lot in it that I agree with and would probably give the same advice to companies I was advising. There are some things I disagree with and I would give counter-advice. As long as the reader takes the content for what it is — one man’s opinion — this can be a very valuable book for entrepreneurs.

#9: T-Mobile Finally Sells Sprint Fiber (2022)

According to Fierce Wireless, T-Mobile has agreed to sell the wireline business the company gained as part of its acquisition of Sprint to Cogent Communications for $1. In 2004, when I was director of strategic planning for the division of Sprint that managed the wireline business, we first seriously looked at selling this asset. Over the next 10 years in that role and as vice president of corporate strategy, we considered the possibility of selling Wireline several more times, even going so far as holding exploratory conversations with potential buyers.

#8: The Customer Network Strategy Generator (2021)

Some strategy tools are analysis focused. They collect and present information to help drive clarity for decision making (e.g. the BCG Growth Share Matrix). Some provide a framework for developing and representing strategic hypotheses (e.g. the Business Model Canvas). Still others can help identify resource and capability mismatches that can lead to strategic failures (e.g. the Diamond and Square Framework).

The Customer Network Strategy Generator, on the other hand, is more like a pilot’s pre-flight checklist, walking a strategist through the steps necessary to develop winning customer-facing strategies in the new digital age.

#7: What is a Business Operating System (2022)

I think the analogy of a computer operating system to a business operating system is valid. … With that analogy in mind, here’s my working definition of a business operating system.

A Business Operation System is the intentionally designed, consistent set of business practices that optimize business operations in alignment with the business’ strategy and culture.

#6: Book Brief: Competing in the Age of AI (2020)

Bottom line, I strongly recommend Competing in the Age of AI to anyone wanting to understand how the digital revolutions are transforming how firms operate and industries compete. As with any book, there are areas where I don’t completely agree with the authors, but in general, they provide perhaps the best treatment of the topic to date.

#5: Book Brief: The Discipline of Market Leaders (2020)

What It Teaches: Companies must choose to provide the best offering in the marketplace by excelling in one of three specific dimensions of value while maintaining threshold standards on the other two dimensions. Those three dimensions are best total cost, best product, and best total solution.
When To Use It: The Discipline of Market Leaders is all about competitive strategy. Review the key lessons in the book when preparing for discussions about competitive strategy and the follow-on planning around culture, organizational structure, core processes, management systems, and information technology necessary to achieve the chosen competitive strategy.

#4: Book Brief: HBRs 10 Must Reads on Strategy (2020)

What It Teaches: As the title implies, this book contains 10 classic articles on strategy from Harvard Business Review. Many of these articles became full length books, so to some extent, this one small book serves as a much quicker way to learn the key messages contained in some of the top strategy books.
When To Use It: The ten articles featured in this book roughly break down into five on strategy development and five on strategy execution. The topics covered range from industry analysis to vision development to management scorecarding to front line decisions and actions. So, in effect, the book covers the entire strategy lifecycle and may prove useful in many diverse situations. It’s certainly worth becoming familiar with the content once and then keeping it handy for quick reference when needed.

#3: What is Strategy (2022)

So, to hit on all the things we’ve talked about so far, a strategy:

Is a framework with depth and dimensionality to deal with uncertainty

Provides long-term vision

Defines the goal being pursued

Sets a direction forward

Identifies critical near-term objectives

Communicates all of the above clearly and coherently, and therefore

Enables decision making

#2: Nextel Helped Work Get Done (2023)

I like to describe the value that carriers like Nextel brought to pre-iPhone software developers as being in three buckets: bits, bills, and bags. First, Nextel provided the core data capabilities (bits) including the packet data network, the development platform, and the GPS data. Second, the company provided the business infrastructure (bills) including the “bill on behalf of” capability and frontline customer support. Third, Nextel served as a sales channel for the software companies (bags), both through the download site as well as through the growing Nextel salesforce, many of whom were focused on the specific industry verticals being targeted by the mobile business application developers.

#1: The Diamond-and-Square Framework (2021)

Eisenmann introduces the first tool this way: “how can an aspiring entrepreneur know whether she has actually identified an attractive opportunity and determine what types of resources are required to successfully capitalize on it? The diamond-and-square framework provides the answers.”

I’m glad that articles from years ago are still providing value to you, my readers. Every week I receive a report letting me know which articles received the most attention that week. These reports are typically dominated by my most recently published pieces, but it’s always a joy to see ones from deep in the archives receiving new attention. I’m glad that my book reviews are helpful, that the stories I share might be inspiring you in your strategic journeys, and that tools I’ve uncovered are helping you day by day.

Most of all, I’m thankful for you and your continued encouragement. Let me know if there are any topics you’d like to see me cover, and feel free to reach out at anytime if there are ways that I can help you as you wrestle with the hard decisions leaders are continuously facing.