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- Herausgeber: WS
- Kategorie: Fachliteratur
- Sprache: Englisch
Knowledge drives growth. Thinking sparks breakthroughs.
Do you dream of building a thriving business?
Those who follow the rules build successful companies.
Those who think differently build great ones.
Start seeing the world of business from a new angle with this book written by someone who spent years building companies rather than working in academia.
Learn from the book:
– What the purpose of the flourishing company might look like
– How to set long-term strategic goals
– How to think long-term in a short-term world
– How to measure business success effectively
– How to keep thinking strategically when overwhelmed by short-term tasks
This isn't a strategy textbook or a step-by-step guide. It's a collection of groundbreaking insights from a person with 30 years of experience, aimed at sharpening your strategic thinking.
Svyatoslav Biryulin has spent his entire career in management. He served as a CEO for over 12 years. He has served as a board member for more than 10 years and as an independent strategy consultant for over 8 years. His experience is reflected in this book.
Das E-Book können Sie in Legimi-Apps oder einer beliebigen App lesen, die das folgende Format unterstützen:
Seitenzahl: 120
Veröffentlichungsjahr: 2024
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Red and Yellow Strategy: Flip Your Strategic Thinking and Overcome Short-termism
Svyatoslav Biryulin
Copyright 2024 Svyatoslav Biryulin
All rights reserved
Self-published.
Digital edition.
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 prior permission of Svyatoslav Biryulin.
Ljubljana, Slovenia
Kataložni zapis o publikaciji (CIP) pripravili v Narodni in univerzitetni knjižnici v Ljubljani
COBISS.SI-ID 199100419
ISBN 978-961-07-2177-2 (ePUB)
2024
Table of Contents
Chapter 1. Strategic Thinker – A Many-Eyed Giant Argus or an Oracle?
Strategic thinking biases
Strategic Thinker – a prophet, an oracle, a warlock, or a wizard? Or all of the above?
Contemplation Questions
Chapter 2. Life is a marketplace of values
Marketplace of values
Group exchange – organizations
Why are some companies more successful than others?
Contemplation Questions
Chapter 3. Value Ecosystems and Value Waves
Value Ecosystems
Value Ecosystem Management
Value Waves
Quibi and Value Ecosystems
Contemplation Questions
Chapter 4. What Is Business?
Strategic mindset
Three coaches
Building a business that will outlive its founders
Contemplation Questions
Chapter 5. Fallacies in Strategic Goal Setting
Flaw #1
Flaw #2
Flaw #3
Flaw #4
Contemplation Questions
Chapter 6. The dark side of strategic goals
Dark sides of big goals
Do we need goals?
Contemplation questions
Chapter 7. Strategy and Trees
Business as relationships
Strategy and trees
Strategy as creating conditions
Contemplation Questions
Chapter 8. What is strategy?
Strategy as a mission
What does strategy mean?
Strategy and goals
Strategy as constitution
The definition of strategy
Beware of the person who sells you a book with only one page.
Contemplating Questions:
Chapter 9. Red and Yellow strategies
Bricks and computer programs
Strategy as a half-baked plan
Red strategy
Yellow strategy – strong strategy loosely held
Yellow Bricks and Yellow Strategy: Inevitably Choosing the Yellow Strategy
Strategy as continuous hypotheses testing
Red and yellow strategies
Contemplation questions:
Chapter 10. What is NOT a strategy?
Overlooked ideas
Strategy and design thinking
Strategy Isn't a Google Maps Route
Customer-free strategy
What is NOT a strategy
Contemplation questions
Chapter 11. Blue Ocean Fallacy
Where to play
Circus and business strategy
The market is not an ocean
First – there are no ‘red oceans’
Second – ‘blue oceans’ are here
Contemplation questions
Chapter 12. Sixteen Basic Human Needs And Business Strategy
Why do you want what you want? Human needs
Sixteen basic needs
Customer needs and customer value
Picturephone (1964) vs Skype (2003)
Value Ecosystem
Conclusion
Chapter 13. Key takeaways
Ecosystems
Stakeholders and Value Waves
Purpose, goals, and success
Central principles
Red and yellow strategies
Market, customer needs, and customer value
Stakeholder value
Chapter 14. Appendix 1
Chapter 15. Appendix 2
Red strategy: 25 questions
Yellow strategy: Crucial questions
Chapter 1. Strategic Thinker – A Many-Eyed Giant Argus or an Oracle?
"Thinking about thinking is the most important kind of thinking."
Category Pirates
In 2011, Wells Fargo bank earned $2.6 million in fees thanks to its new strategy, “Eight Is Great.” In 2016, it paid $185 million in fines for how it did it.
In 2011, most customers used only one or two bank products. The top executives firmly decided to increase this number to eight.
But workers struggled to meet demanding quotas. They began to cut corners, opened 1.5 million unauthorized deposit accounts, and made 500,000 unauthorized credit card applications for Wells customers – without their knowledge.
In 2016, the regulator punished the bank for what, initially, was a good intention.
…
In September 2005, eBay triumphantly announced buying Skype for $2.6 billion. It had hoped the VoIP service would help users communicate better. But four years later, eBay sold Skype for $1.9 billion.
For most eBay users, email was enough.
…
In early 2023, US automotive industry executives beamed with enthusiasm about the future of EVs. They had invested billions in new production facilities.
But the market received a cold shower when the market growth sharply slowed down in the second half of 2023.
“Ford has pulled back on EV investment and could delay some vehicle launches while increasing production of hybrids…It lost a staggering $4.7 billion last year on its battery-powered car business,” The Wall Street Journal reported.
Mary Barra, the CEO of General Motors, said the company “wouldn’t meet a self-imposed goal of producing 400,000 EVs over a two-year period through mid-2024.”
…
When we think of the future, it seems so linear and logical, but reality usually turns out to be rather messy and complicated.
These three cases are very different. Yet, they have a lot in common. I blame strategic thinking biases for these mistakes – and many others.
Strategic thinking biases
Our thinking device – the brain – evolved about 500,000 years ago.
It developed (and still develops) at a snail’s pace. In the past 100,000 years, its size has only increased by 10%.
Homo sapiens originated in Africa roughly 300,000 years ago. And the brains of these ancient humans were ideally suited to their lifestyle.
They lived in small groups of about 150 people.
They weren’t keeping track of the stock prices.
They didn’t worry about product-market fit.
They didn’t run organizations so large that their leaders might never meet most of the employees face to face.
Their life wasn’t easy, but their strategic tasks were pretty simple – securing enough food for their families, raising children, and surviving.
But look at the CEOs of modern businesses.
They must think multi-dimensionally.
They have to balance the conflicting interests of various groups of people.
They need to foster team creativity and enforce rigorous execution discipline.
They should lay the foundation for long-term success and ensure day-to-day outcomes.
They are like race car drivers who must simultaneously win today’s race and upgrade their cars for future ones. To make it worse, they do not know what these future races will be like.
At the same time, they still rely on pretty much the same computing devices in their heads as their distant mammoth-hunting ancestors. It’s like building AI on an old Windows XP computer.
Our brains are like ancient computers running on outdated software. We stick to patterns instead of thinking things through and let emotions run the show. Our short-term memory capacity is limited to three to five items.
We are physically incapable of keeping all business tasks in our heads. Like carnival jugglers, CEOs must keep multiple objects in the air at once. And these objects vary in size and weight.
No wonder their strategic thinking is biased. A few years ago, when I was a CEO myself, I suffered from the same problems.
Here are some examples:
With this book, I will try to help you focus on primary business principles, which will sharpen your strategic thinking.
I don’t claim to have a magic solution to all problems. Nor do I claim to have a magic wand to overcome all cognitive strategic biases – there are too many. But I will offer you a few valuable ideas.
Strategic Thinker – a prophet, an oracle, a warlock, or a wizard? Or all of the above?
Argus was the guardian of the heifer-nymph Io. He was nicknamed Panoptes for his hundred eyes. Even when some of them slept, others stayed open. So Argus could see everything and missed nothing.
Is a strategic thinker a many-eyed creature like Argus or an oracle who predicts the future? Or both?
Would that thinker be a brave captain who looks over the horizon and navigates the ship through the raging waves or a thoughtful analyst?
The sad truth is that nobody knows.
We live in a world of blurred definitions and made-up meanings.
Igor Ansoff was the first to apply the term ‘strategy’ to business in 1965. Every HR person tells you that strategic thinking is a must for top executives.
However, we lack both a shared definition of strategic thinking and a means to measure its effectiveness.
Strategic thinking is what we realize we lack after making a mistake.
With this book, I offer you an unconventional perspective on this issue.
You may find many definitions of strategic thinking in books.
They say that a strategic leader must ‘think big and bold.’ That a strategic thinker should ‘challenge current assumptions’ and ‘anticipate the future.’ To ‘see the big picture.’
I am far from asserting that these definitions are wrong.
But I don’t know how one can master the ‘bold thinking’ skill or develop the art of ‘seeing the big picture.’ I haven’t met an executive or entrepreneur who learned to think strategically simply by ‘dreaming big.’
Over the years, as a CEO, a board member, and a strategy consultant, I have developed my own practical approach to strategic thinking. I have participated in hundreds of strategy discussions and conducted dozens of strategic retreats. The company I led went through a major strategic crisis in 2008, survived, and found a new path to success.
This book offers a distilled summary of my experience of strategic thinking. It is not a textbook or a how-to manual. I will offer you practical strategy development tools in a future book.
This mini-book is devoted to only one topic – strategic thinking. It involves understanding and applying some fundamental laws that we too often forget about when devising a strategy.
Contemplation Questions
Strategy is the answer to several correct questions. At the end of each chapter, I will offer you several questions for reflection. By contemplating the answers, you will be able to sharpen your strategic thinking.
Questions for this chapter:
– Do you believe you allocate enough time for strategic thinking?
– Do you contemplate different strategic issues every day?
– Does your team do the same?
– Do you discuss strategic questions with your team regularly?
– Do you find these discussions productive?
Chapter 2. Life is a marketplace of values
"The ultimate goal of our existence is interaction. Man is a social being. We need each other, and that's it."
Dr. Ichak Kalderon Adizes
What do the New York Stock Exchange and your birthday party have in common?
What does Amazon have in common with a school library?
They are more similar than you may think.
Marketplace of values
It appears that the first homo sapiens should have been doomed. They didn’t run faster than predators. They didn’t have a keen sense of smell or sharp claws. They didn’t see in the dark.
But they survived and evolved through communication skills. A group turned out to be stronger than an individual.
But communication skills weren’t only about gossiping or coordinating actions during hunting. They paved the way for complex social contracts.
The earliest social contracts were simple – hunters traded bear skins for stone axes. However, contracts grew more complex over time. Sophisticated forms of exchanging intangible values emerged – such as family, community, or society.
The first businesses – although it would be a stretch to call them that – emerged. Business is a complex form of value exchange involving more than two parties.
Our life is all about value exchange.
Only those who give more than others receive more than others.
At work, we exchange our time and energy for money and, if we are lucky, interesting tasks.
A bakery at the corner and an international behemoth both trade values with their customers and suppliers.
We share emotions with our friends and family. The value we give and receive may be intangible.
Our societies and communities are vast marketplaces of value. For instance, we obey the rules in return for social benefits and status.
When you stop at a red light, you sacrifice freedom for your and others’ safety. We play by the rules and expect others to do the same.
Even dictatorships offer their citizens protection from external enemies (most likely fictitious ones) in return for limiting their civil rights.
Value can alter its forms during the exchange. For instance, a father exchanges his time and energy to earn enough to afford a good education for his daughter. However, his efforts don’t immediately translate into a monetary value for the daughter. Instead, she receives positive emotions from her father’s love and care and a chance to build a decent career.
Even when you sleep, you voluntarily turn yourself off for eight hours to restore your energy and strength.
Money itself doesn’t have any value. But it is a universal medium of exchange for many types of deals.
Unless you are a hermit in a desert, you’re always involved in some kind of social exchange.
Success is the ability to gain more value by entering into beneficial social contracts.
Group exchange – organizations
When an ancient hunter swapped furs for a bow and arrows, it was an individual exchange. However, the process followed by an ancient craftsman to produce a weapon fundamentally differs from how Amazon, Temu, Apple, Samsung, and any other company operate because organizations have to cater both to the needs of their customers and employees.
When you buy a bottle of wine at a grocery store, you exchange the value you possess – money – for the value this organization can offer – reasonably priced wine.
But the store couldn’t deliver value to you without producing value for many people who made the deal possible.
Every business has employees, shareholders, suppliers, and customers. We’ll delve into the matter in more detail in the next chapter. But here, it’s essential to note that any organization – for-profit or non-profit, private or public – is a machine that trades value with multiple groups of people.
An organization leader is someone who tries to build such value for a group of people that they are willing to create value for other groups.
And the ability to do it efficiently is key to the organization’s success.
Why are some companies more successful than others?
The Terman Study of the Gifted is a famous scientific work on the correlation between IQ and individual success. Lewis Terman began the study at Stanford in 1921. He and his team selected 1,528 gifted children and followed their lives over many years. After Terman’s death in 1956, other researchers continued his work.
