STRATEGY GENIUS 605381_Strategy_Genius_Book.indb 1 22/08/15 7:50 AM This page intentionally left blank STRATEGY 40 insights from the science of strategic thinking RICHARD A D JONES 605381_Strategy_Genius_Book.indb 3 22/08/15 7:50 AM AboUT ThE AUThoR Richard Jones is a consultant and entrepreneur who works on complex strategic and technology issues – developing and implementing new strategies and business models from the USA to Kazakhstan and from the Arctic Circle down to South Africa. Client work includes Shell, BT, Nike, BCG, Santander, RBS, Boots, Vodafone, Siemens and Johnson & Johnson. The technology consultancy he co-founded (venturateam.com) is considered a leader in next generation telecoms and it has also bootstrapped its own successful operator in the highly competitive Swedish telecoms market – serving 155,000 subscribers and being ranked number 4 in the world for broadband service value prior to a sale to TeliaSonera. He has founded or helped several other start-ups achieve returns of 40 to 75 times for shareholders. He has applied these skills to helping develop new business units for companies like BT. The latest venture, founded with his colleagues, is taking the open access Fibre to the Home (FTTH) elements of the Swedish operation global – with the first client delivering what is believed to be the first gigabit, triple play services for subscribers in the whole of Africa. He is very active across a number of disruptive technology areas – mobile Internet, FTTH and cloud – including as Chairman of the Smart Cities – Operations and Applications Committee for the FTTH Council MENA. Richard regularly chairs a number of technology conferences across Europe and MENA covering cutting-edge telecoms, smart cities and technology. He also delivers keynote speeches on strategy and disruption for companies like NBC/Universal. Richard is the author of several books, including Project Management Survival (also available in Chinese, Polish and Latvian) and The One Day MBA – a book on the different skills required by executives who want to gain experience fast. 605381_Strategy_Genius_Book.indb 4 22/08/15 7:50 AM He has a degree in electronics, a masters equivalent in engineering, an MBA with distinction from the University of Warwick and is also studying for a doctorate in the strategy of technology companies. If you’d like to get in touch Richard can be contacted at [email protected] 605381_Strategy_Genius_Book.indb 5 22/08/15 7:50 AM Acknowledgements I would like to thank the nice people at Hodder & Stoughton for asking me to write the book and their help in editing it. Strategy is such an important topic but so badly understood. It’s been a pleasure working with Iain, Alison and the others to deliver a book that I hope will help companies create and execute better strategies. I also want to thank Stefan Stanislawski and Mikael Sandberg, my partners within Ventura Team (venturateam.com). We’re into our 15th year of the adventure and have delivered strategy, business modelling, change management and implementation projects around the world together. I think it’s rare to find people you really like and respect that you can work with, but I’m lucky as they are two of the best. Finally, thanks to my lovely wife Julie and Harry and Will for the support, love and laughter, as well as allowing me the time to write this book. PeRmIssIons Chapter 16 Figure 16.1 Reprinted by permission of Harvard Business Review. From Tilt: Shifting Your Strategy from Products to Customers by Dawar, Niraj, 2013. Copyright © 2013 by Harvard Business Publishing; all rights reserved Chapter 37 Figure 37.1 Reprinted by permission of Harvard Business Review Press. From Repeatability: Build Enduring Businesses for a World of Constant Change by Zook, Chris & Allen, James, 2012. Copyright © 2012 by Harvard Business Publishing; all rights reserved Chapter 39 Figure 39.1 Reprinted by permission of Harvard Business Review Press. From The Balanced Scorecard by Kaplan, Robert S. & Norton, David P. 1996. Copyright © 1996 by Harvard Business Publishing; all rights reserved Chapter 40 Figure 40.1 Reprinted by permission of The Academy of Management Executive. Hambrick, Donald C. & Fredrickson, James W. (2001), ‘Are you sure you have a strategy?’, The Academy of Management Executive, Vol. 15 No. 4 pp 48–59. Copyright © 2001 Chapter 40 Figure 40.2 Reprinted by permission of Harvard Business Review Press. From Playing to Win: How Strategy Really Works by Lafley, A. G. & Martin, Roger L. 2013. Copyright © 2013 by Harvard Business Publishing; all rights reserved 605381_FM_Strategy_Genius.indd 6 24/08/15 5:34 PM ‘Richard Jones is, for a broadcaster like me, on the fast dial for comment about almost everything. I am, like most of my breed, lazy and a skimmer. Richard always places the context and arrows the opinion. So this is so appropriate – genius conflated into something you can understand. A bit like Richard, really.’ Michael Wilson – Director of Business and Economics Editor, Arise Global Networks ‘Good strategic thinking is often preached; here are some good questions and frameworks for practitioners.’ Peter Davidson, FREng – Formerly Senior Innovation Advisor to the Department for Business, Enterprise and Regulatory Reform (BERR) and Department for Innovation, Universities and Skills (DIUS) ‘Strategy is one of those topics that many people talk about without having much idea what they mean. Richard Jones is one of the exceptions. His latest book gets straight to the point and you can see that this is someone who not only understands the topic and can explain it well, but has actually done these things and put into practice the stuff he talks about. A very good book; I recommend it strongly.’ Peter Hiscocks – CEO Judge Business School Executive Education, University of Cambridge 605381_Strategy_Genius_Book.indb 7 22/08/15 7:50 AM First published in Great Britain in 2015 by Hodder & Stoughton. An Hachette UK company. First published in US in 2015 by Quercus US. Copyright © Richard A D Jones 2015 The right of Richard A D Jones to be identified as the Author of the Work has been asserted by him in accordance with the Copyright, Designs and Patents Act 1988. Database right Hodder & Stoughton (makers) All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior written permission of the publisher, or as expressly permitted by law, or under terms agreed with the appropriate reprographic rights organiza- tion. Enquiries concerning reproduction outside the scope of the above should be sent to the Rights Department, John Murray Learning, at the address below. You must not circulate this book in any other binding or cover and you must impose this same condition on any acquirer. British Library Cataloguing in Publication Data: a catalogue record for this title is available from the British Library. Library of Congress Catalog Card Number: on file. Paperback ISBN 978 1 47360 538 1 eBook ISBN 978 1 47360 539 8 1 The publisher has used its best endeavours to ensure that any website addresses referred to in this book are correct and active at the time of going to press. However, the publisher and the author have no responsibility for the websites and can make no guarantee that a site will remain live or that the content will remain relevant, decent or appropriate. The publisher has made every effort to mark as such all words which it believes to be trademarks. The publisher should also like to make it clear that the presence of a word in the book, whether marked or unmarked, in no way affects its legal status as a trademark. Every reasonable effort has been made by the publisher to trace the copyright holders of material in this book. Any errors or omissions should be notified in writing to the publisher, who will endeavour to rectify the situation for any reprints and future editions. Typeset by Cenveo® Publisher Services. Printed and bound in Great Britain by CPI Group (UK) Ltd., Croydon CR0 4YY John Murray Learning policy is to use papers that are natural, renewable and recyclable products and made from wood grown in sustainable forests. The logging and manufacturing processes are expected to conform to the environmental regulations of the country of origin. Hodder & Stoughton Ltd Carmelite House 50 Victoria Embankment London EC4Y 0DZ www.hodder.co.uk 605381_Strategy_Genius_Book.indb 8 22/08/15 7:50 AM coNTENTS Introduction xi About this book xiv 1. Do you have a good strategy? 1 2. Can your people say what your strategy is? 7 3. So what is strategy and what should it deliver? 12 4. The right amount of strategic ambition 18 5. Why things going well can be so dangerous 23 6. Disruptive technologies 28 7. From tough competition to hypercompetition 34 8. Responding to hypercompetition 42 9. Exploiting disruption 48 10. Routes to resilience 55 11. Seeing disruption coming 62 12. Picking which competitive advantage to pursue 69 13. What is the theory of your firm? 75 14. Competitive adaptability through adaptability 80 15. Why stopping is as important as starting 88 16. Marketing as strategy 94 17. Understanding your market situation 100 18. The new dynamics of competition 107 19. How to avoid your business model getting into trouble 113 20. Matching strategy to your situation 119 21. Generic strategy options and what they mean for you 123 22. Creating adaptability to deal with a changing environment 129 23. Learning from failure 135 24. Creating new business models 140 25. How to identify new business models 145 26. Managing risk in your business model 151 27. Sustainability, feasibility and acceptability (SFA analysis) 157 28. Bold retreat 163 29. Strategy – art or science 168 30. How strategy shapes structure 174 31. Getting the business model right 180 605381_Strategy_Genius_Book.indb 9 22/08/15 7:50 AM