ClearPurpose

Bottom line, Playing to Win is likely the best book on strategy that I have yet read. It teaches concepts in an easy to understand way, provides frameworks that are easy to use in real world situations, and provides lots of examples to show how the frameworks work in a real company. I strongly recommend Playing to Win to anyone involved in strategy development and strategic decision making.

At the time Playing to Win was published, Roger Martin was Dean of the University of Toronto’s Rotman School of Management and A.G. Lafley was the former Chairman and CEO of Proctor & Gamble. The book’s title stems from the authors’ contention that companies must “play to win” or else they are wasting everyone’s time and investors’ money. Too many companies “play to play” which can appear to work for a time, but in the long run simply destroys value. 

Playing to Win is mostly structured around the Strategy Choice Cascade. Proctor & Gamble examples are used throughout the book to demonstrate how the framework works in real life. The Strategy Choice Cascade is a series of five questions that define a company’s strategy:

• What is our winning aspiration?
• Where will we play?
• How will we win?
• What capabilities must be in place?
• What management systems are required?

Chapters 2 through 6 each deal with one of the questions in the cascade. The chapters often include tutorials in basic concepts of competitive strategy such as market segmentation, customer needs research, generic strategies, differentiation, etc. Each chapter includes detailed step-by-step case studies from P&G, a list of “dos and don’ts”, and often a story from either Martin or Lafley (or both) to share their personal experiences (sometimes painful) that helped them learn the key concepts covered in the chapter. There’s a lot of detail in these chapters beyond what the simple questions in the cascade might imply. Anyone involved in the kinds of hard strategic questions any business (especially a large one) faces will be able to relate to and learn from the many stories told and lessons taught.

Chapter 7 is titled “Think Through Strategy.” At the beginning of the chapter the authors point out that the cascade is helpful, but in the real world leaders will ask: “But how and where do you start? And how do you generate and choose between possibilities at each stage?” They offer another framework as a starting point. The final full chapter in the book introduces yet another framework to help with strategy development. The book closes with a short Conclusion titled “The Endless Pursuit of Winning” which ties the three main frameworks from the book into what the authors call a “playbook” for strategic management in a dynamic competitive world. 

Read my full review here.

In 1985 Roy Wilkens was serving as president of Williams Pipe Line, a division of The Williams Companies in Tulsa, Oklahoma. An electrical engineer by training, Wilkens had risen through the ranks in the energy industry and now was leading one of the country’s largest petroleum products pipelines. Little did he know that he was about to jumpstart an entirely different industry.

From a regulatory perspective, the Department of Justice had just ordered the break-up of AT&T, leading to the emergence of dozens of new long distance competitors. From a technology perspective, fiber optics was emerging as a viable means of transporting telecommunications signals with high reliability and low cost over long distances. Roy and his team recognized the opportunity to build and operate a new kind of pipeline — one carrying bits rather than BTUs.

Many of the new long distance competitors were ambitious entrepreneurs who saw the opportunity to sell long distance voice services to homes and businesses. Each of these startups raised enough capital to buy a long distance telephone switch and then connected that switch to all the Bell operating companies that had been broken out of AT&T. The closer they could connect into the Bell networks to where a call was originating and completing, the lower their cost. The scary situation for these startups was that the only company that could sell them the circuits to make all of those connections was AT&T, the very company they were competing against. 

One of those entrepreneurs was Clark McLeod. He started Teleconnect by taking out a second mortgage on his home and raising money from friends and family. McLeod had been in talks with six other entrepreneurs, each of whom had raised enough funding to build a regional fiber network, but none of whom could afford to build a nationwide network. Although competing with each other for long distance customers, the seven carriers decided to band together to solve the longhaul interconnectivity problem. They formed the National Telecommunications Network (NTN). Rather than build its own fiber network, Teleconnect contracted with Williams to build a “midwest cross” from Minneapolis to Kansas City and Omaha to Chicago and connect it into the NTN network. 

The partnership was a huge success. The companies interconnected their networks and figured out the operational details for provisioning a circuit across multiple networks. NTN’s president, Martin McDermott in Washington made sure everything operated smoothly and directed the lobbying efforts to protect the rights of the emerging competitive communications carrier industry. Each company immediately had the combined reach of its brethren, cutting their costs and improving the quality of their calls. Williams remained a carrier’s-carrier, not competing for retail long distance customers but selling circuits to all the other long distance carriers and some very large business customers. 

Through the combined efforts of all, long distance prices continued to come down and the market grew. Eventually long distance calls became so inexpensive that they were bundled into unlimited cellphone and broadband offers. Without the collaborative efforts of the NTN members, it’s impossible to know what would’ve happened, but if AT&T had successfully crushed the nascent industry it’s likely we would not have seen the innovation and falling prices that we have all enjoyed.

Read the full article here.

There’s No Such Things as Business Ethics was written both at the peak of John Maxwell’s popularity and in response to a number of high profile corporate ethical failures (Enron, MCI WorldCom, Tyco, Adelphia, etc.). I only recently picked the book up when I had sold a box-load of books at the local Half Price Books and scanned the shelves for an interesting title I could buy with my paltry earnings. The book is 134 pages, but the pages are small and the type is large. Each of the 8 chapters can be read in 10–15 minutes, so the entire book could be consumed in a couple of hours.

If you want to know the key takeaway from the book, it’s quite simple: The Golden Rule (“So whatever you wish that others would do to you, do also to them, for this is the Law and the Prophets.” Matthew 7:12) is the only guideline necessary for business ethics.

It doesn’t take 134 pages to make that point. What makes the book worth reading is the 7 chapters plus conclusion that follow that observation. Each provides practical guidance for how to consistently put the Golden Rule into practice in your life and your work. Each chapter introduces it’s topic, uses a list of things we need to understand or practice, heavily relies on quotes from well known leaders throughout history, and uses helpful examples to show what good and bad behavior looks like.

Click here to read the full review.

Last week I wrote that sometimes an early stage startup simply doesn’t have what it takes to single-handedly create a new category. The first example I recall of watching that happen first-hand was at the birth of what we now know as the Internet.

Towards the end of the 1980s and beginning of the 1990s (even before the Web was invented) more and more companies were looking for ways to leverage the global connectivity that the Internet provided. It was becoming apparent that some commercial form of the network would emerge. IBM and MCI were anxious to monetize the investment they’d made in building and operating the NSFnet backbone. Both companies thought the current model of telecommunications worked just fine. They wanted to build a commercial Internet modeled on the status quo with toll gates and usage-based billing.

At the same time entrepreneurs were developing a very different vision for a commercial Internet. UUNET and PSInet recognized that the world was changing. Packet switching was riding Moore’s Law to drive the cost of connectivity towards zero and new applications were emerging that would drive network utilization exponentially higher. Metering the Internet would limit both usage and innovation. Their vision for the commercial Internet was not just better, it was different. It was a new category, not just a new service in the old category.

But how could these early stage startups hope to challenge the status quo, change the thinking at government bureaucracies like the NSF, and take on corporate giants like IBM and MCI? By themselves, they didn’t stand a chance.

Click the link below to read my story of how they formed a coalition to challenge the status quo. I believe that the Internet would be very different today if those early stage startups hadn’t joined together to establish the Commercial Internet category. I am thankful that otherwise fierce rivals were willing to come together to establish the better and different vision that they shared.

Read the full story here.

Creating a new category is a long, hard, and expensive process. In the best cases, customers quickly see the value in the new category, change their ways, and adopt the new way of doing things. Even these seeming overnight success are the results of years of innovation and foundation building. They take time and a lot of money.

However, when the target customers are risk averse and the category creators are early stage startups, an innovator may simply not have what it takes to establish the category on their own. 

For example, IT decision makers at large corporations are, almost by definition, risk averse. A big part of their job is to make sure that the company’s information infrastructure is always available. They are always busy behind the scenes keeping everything running well. No one notices when IT does their job well and everything runs as expected, but as soon as something fails, everyone starts pointing fingers at IT. Therefore, IT leaders often live by the mantra “if it ain’t broke, don’t fix it.” They are reticent to make changes, especially when those innovations come from unproven new vendors. By sticking with the long established industry “best practices”, even if something does go wrong, the IT leaders can claim that they did everything “right.”

So, what does it take to change their minds? Category makers need to develop a compelling story that explains why the long established industry standards no longer work or will soon cause major problems. They need to educate IT buyers on how their technology overcomes these challenges, and they need to convince those buyers that implementing their new solution is actually the lowest risk option for buyers. They then need to tell that story over and over again through multiple platforms with a high level of consistency so that it starts to sink in and eventually become ingrained in how potential buyers think about the future.

But early stage startups lack the three things most critical to creating credibility and trust with potential customers. First, they haven’t established their brand. Customers have never heard of them. They have no reputation and there’s no reason for customers to take a chance on them. Second, early stage startups often offer a relatively small part of the total solution. IT decision makers will need to combine the startup’s part with parts from other vendors to have a complete solution to replace the status quo. That increases both the effort and the risk for the IT leaders and often simply isn’t worth it. Third, telling the story loudly, persistently, and consistently will typically require a level of investment well beyond the resources of an early stage startup.

A powerful move to overcome these challenges is for startups to pull together into a coalition to clearly establish the viability and value of the new category in the minds of IT decision makers. Together these startups should develop one consistent compelling story that each can each tell over and over again to awaken potential buyers to the risks they are already taking and to position the new category as a great solution. Their combined voices create greater credibility and their combined spending creates greater reach. The unique capabilities each startup brings to the table adds to the overall value of the category, providing a more complete solution for the customer.

Click the link below to read my full article on what this looks like in practice.

Let me know if you need any help on your category making journey, whether that be on your own or as part of a coalition.

https://clearpurpose.media/when-it-takes-collaboration-to-create-a-category-94939a81f72?sk=9826c23394d236b1a7968b39df1171ed

As I continue my tour of classic books that I haven’t previously reviewed, this week I come to Every Good Endeavor by pastor Tim Keller with Katherine Alsdorf.

With Keller’s passing earlier this year, it seemed like the right time to pick this book back up and read it from beginning to end. Keller was a talented and accomplished writer, but he was really a pastor at heart. At times, the content comes across as sermons on specific passages of scripture. At other times, the pastor seems to be encouraging his flock as a trusted counselor. The book as a whole tells a complete story that follows the Bible’s complete story. 

Every Good Endeavor provides a gospel-centered framework for understanding why work is good, why it is challenged, and how it can be redeemed for the glory of God. For Christians, the book provides fresh insights and encouragement. It doesn’t provide simple checklists for how to “connect your work to God’s work” but will cause you to think deeply and differently about why your work matters and how you can approach it with a new perspective.

Read my complete chapter-by-chapter review here.

Going on Offense is the third book that Behnam Tabrizi has written on the topic of establishing innovation and agility as how organizations operate. This book is subtitled a “playbook” and leans heavily on studies of five companies that have done so: Apple, Tesla, Amazon, Starbucks, and Microsoft, along with references to 21 other companies more or less successful in sustaining innovation. The result of their research is the identification of eight elements common to companies that are successful at perpetual innovation. The book is structured into a chapter on each of these characteristics along with a closing chapter providing a five step process for establishing those elements.

Read my full review here.

For the next stop on my tour of classic books I hadn’t yet reviewed, I revisit Good to Great by Jim Collins.

Good to Great is one of a very small set of classic business books that has fundamentally changed how leaders think about and talk about their businesses. In just over 20 years, the terminology and concepts introduced by the book have become so ingrained in business thinking that, in writing this review, I stopped several times to Google a phrase or idea to try to figure out who, before Collins, had originated it. If you’re a business leader and haven’t read the book, you’ve undoubtedly been influenced indirectly by it.

Read my full review here.

The new book Madison Avenue Makeover by Michael Farmer effectively documents the transformation process that ad agency Huge has followed in defining a new operating and business model.

What it does well is describe how ad agencies work and the challenges in the industry. It does a good job of documenting the specific meetings, decisions, and personnel changes made throughout the journey from July 2021 to the end of 2022. It clearly documents the new operating model for Huge and how this new model is expected to overcome the business model challenges facing the industry.

However, the author admits that it’s still too early to know whether or not it’s going to work. The new model is a collection of hypotheses that are still being tested and are expected to be tweaked over time. It’s also not a very exciting story for those outside the industry. For those in the industry (especially those at Huge), the book may provoke some important questions or uncover some meaningful insights.

Read my full review here.

For the next stop on my summertime tour of “classic” books that I haven’t yet reviewed, I’ve taken a look at Wireless Nation by James Murray, Jr. Maybe you don’t consider this book a classic, but it is one of my all-time favorites.

When I was still in college, my dad introduced me to a company that he had made a small investment in. They were acquiring wireless spectrum and contracted me to do some computer programming to model the reach of wireless signals using that spectrum. It was a small project that provided some pizza money. I did what they asked for, hopefully with high quality, but otherwise didn’t think much about it. Little did I know at the time that much of my career would be in telecom and specifically in wireless. 

When I graduated college, wireless was still a relatively insignificant part of the telecom industry, so that experience wouldn’t become relevant to me until more than 15 years later when I joined Sprint. I picked up this book to better understand the wireless industry I was joining. It was fascinating to travel back in time to the mid-1980s and realize how crazy and formative those days had been in the industry that I had slightly touched through my IBM-PC keyboard in my college apartment.

Wireless Nation is one of my two favorite books about the history of digital technology (the other being Nerds 2.0.1 about the birth of the Internet). Both books tell the stories of those crazy people that saw a future that didn’t yet exist, ignored the nay-sayers, and made the future a reality. The stories are great stories — filled with heroes and villains and anti-heroes, and tracing the narrative arc from the “call to adventure” to a series of challenges and temptations to finally resolving those challenges, resisting those temptations, and ultimately gaining the reward. What makes these books so fascinating is the before and after picture they paint and even to consider how different the “after-after” (today’s world) is from the world described as “modern” when the books were published.

Can you remember a world before cellphones? That almost seems like an ancient world seen only in black and white photos, and yet for many of us, it was in our lifetime. This year the wireless industry celebrated the 50th anniversary of the first cellphone call ever placed (by Motorola’s Martin Cooper). But it was another 10 years before the technology was available as a commercial service (the first commercial cellphone call was 40 years ago this October). I can remember 1983. Can you?

What’s equally amazing is to think of what has changed since Wireless Nation was published in 2001. In 2001 there were six wireless carriers with at least 4% market share: Cingular (34%), Verizon (20%), Sprint (11%), Nextel (9%), ALLTEL (5%) and T-Mobile (4%). Today, of those only Verizon and T-Mobile still exist (ALLTEL is part of Verizon, Sprint and Nextel are part of T-Mobile and Cingular became AT&T). In 2001, the leading “smartphone” was the Nokia 9210. (For those that remember the Handspring Treo, it would come in 2002). Apple was still a computer company and Google was still a search company. There weren’t any social networks, unless you count America Online. (MySpace was launched in 2003.) In 2001, only 55% of the adult population even owned a cellphone and on average, the phone was only used about 5 hours per month (all voice). Many people today use their phones that much each day. How the world has changed!

Wireless Nation tells the industry’s fascinating story from inception to 2001 by colorfully telling the stories of the individuals who were part of it. Some of these people you may have heard of (e.g. Craig McCaw). Many of them I had never heard of before reading the book. It was the wild west frontier days of an industry that has become central to our lives and Murray does an excellent job painting the picture of heroes, villains, and (mostly) anti-heroes and making this time come alive in our own minds.

I strongly recommend it to anyone interested in the history of technology or business, or who simply wants to better understand how today’s wireless industry came to be.

Read the full review here.