StrategyHeuristics

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Contents

Readings[edit]

Reading #1: In Praise of Middle Managers by Quy Nguyen Huy[edit]

SUMMARY: Contrary to popular belief, middle managers make valuable contributions to radical change at a company. They stand in a unique position between day-to-day operations and the big picture, which allows them to creatively address problems. (Woskov)

  1. Middle managers, as it turns out, make valuable contributions to the realization of radical change at a company.
  2. Because of their proximity to day-to-day operations and to the big picture viewpoint, middle managers can creatively address problems that upper management cannot because they understand what is feasible as well as what is important. (Skiple)
  3. Since middle managers often have the best social networks, they are uniquely qualified to positively effect change in the implementation phase. (Skiple)
  4. Change can result in high levels of fear in an organization, and middle managers know their subordinates and can tailor their approach to alleviating that fear. (Skiple)
  5. Too much change is chaos, too little kills momentum; middle managers are responsible for “making the whole messy thing work.” (Skiple)

Reference/Anecdote: At a telecom company with 117 funded projects, 80% of senior executive initiatives failed; 80% of middle managers ideas succeeded. (Pauli)

Reading #2: "Can You Say What Your Strategy Is?" by Collis and Rukstad[edit]

SUMMARY: A clear and simple strategy statement, consisting of an objective, scope, and advantage, can have a substantial impact on a company’s success. (Woskov)

  1. The strategic objective should be specific, measurable, and time bound. (p 86)
  2. The basic elements of a strategy statement are: the objective (ends), the scope (domain), and the advantage (means). FASS

MNEMONIC Device: Find the "sweet spot", or where the 3 c's converge: (Pauli)

  • Customer needs it
  • Capability exists to fill the need
  • Competition doesn't provide it adequately or at all

Reading #3: "What is Strategy" by Michael Porter[edit]

SUMMARY: This article lays the foundational concepts of strategy and specifically addresses how it is different from operational effectiveness. (Woskov)

  1. COUNTERINTUITIVE: Japanese companies rarely have strategies; most imitate and emulate one another.
  2. COUNTERINTUITIVE: Customer focus should NOT be interpreted to mean "serve all customer needs or respond to every customer request."
  3. Strategy is... the creation of a unique and valuable position involving a different set of activities. (Skiple)
  4. Strategy is... making tradeoffs. (Skiple)
  5. Strategy is... creating fit among a company's activities. (Skiple)
  • First-order fit: consistency (between activity and strategy)
  • Second-order fit: activites are reinforcing (neutragena - provided in classy hotels = ppl associate w/superior product when at drug store)
  • Third-order fit: optimization of effort (Gap offers new choices to customers more frequently than rivals)
  1. Strategy is...choosing to perform activities differently than rivals do (i.e. Southwest - all 747s, no meals, lots of times, targeted hubs) (Pauli)
  2. Strategy is...choosing what not to do (Pauli)
  3. Companies that try to be all things to all customers risk confusion in the trenches as employees attempt to make day-to-day operating decisions without a clear framework.
  4. A company can only outperform rivals only if it can establish a sustainable competitive advantage. (Pauli)

Reading #4: "The Five Competitive Forces that Shape Strategy" by Michael Porter[edit]

SUMMARY: Awareness of the five forces can help a company understand the structure of its industry and stake out a position that is more profitable and less vulnerable to attack. (Woskov)

COUNTERINTUITIVE: Fast-growing industries are always attractive. (Not so--liable to High threat of entrants, high power to suppliers, potentially high number of substitutes--i.e. these stronger forces lower profitability). (Pauli)

1. It is the threat of entry, not whether the entry actually occurs, that holds down profitability. (Pauli)

2. When it comes to analyzing your Industry, making lists is not a substitute for rigorous analysis. (Pauli)

3. It is industry structure that drives competition and profitability. (Woskov)

4. Eliminating rivals is a risky strategy because a a profit windfall from removing today's competitors often attracts new competitors and backlash from customers and suppliers. (Woskov)

Reading #5: "The Making of an Expert" by Ericsson, Prietula and Cokely[edit]

SUMMARY: This article explodes the myth that experts are born. Instead, outstanding performance is the product of years of deliberate practice and coaching, not of any innate talent or skill. (Woskov)

  1. Experts are made, not born. (Richey)
  2. Requirements for developing genuine expertise: struggle, sacrifice, self-assessment. (Richey)
  3. 10,000 hours required or 10 years (Pauli)
  4. You need a coach with quality feedback who push you “just right” (Pauli)
  5. No shortcuts
  6. Requires deliberate practice that focuses on area’s you can’t do well
  7. First hours of the day are "best"

Real expertise must pass 3 tests:

  • performance must be consistently superior to peers
  • repeatable/verifiable in a lab
  • measurable

Reading #6: "Reinventing Your Business Model" by Johnson, Christensen and Kagermann[edit]

SUMMARY: Business model innovation can reshape industry. This process can be accomplished by recognizing an important job that the customer wants done, constructing a blueprint for how the company will fulfill that need, and finally comparing it to the existing to model to see if change is needed. (Woskov)

  1. The Customer Value Proposition (CVP) is the most important part of the business model to get right. (Skiple)
  2. Key resources are those that create competitive differentiation; they are not "generic" resources that other players possess.(Skiple)
  3. The authors' definition: a business model consists of four interlocking elements – CVP, profit formula, key resources, and key processes – that, taken together, create and deliver value. (Skiple)
  4. Radically new products usually need new business models, but it is possible to transcend the problem if you can understand your existing business model at a granular level and come up with a better way of getting an important job done. (Skiple)
  5. The four most common barriers keeping people from getting a job done are insufficient wealth, access, skill, or time. (Skiple)
  6. Game changing products rarely emerge from established businesses (Ho).

Reading #7: "Cocreating Business's New Social Compact" by Brugmann and Prahalad[edit]

SUMMARY: The liberalization of world markets is forcing companies and nongovernmental organizations (NGOs) to work together and develop new business models that will transform organizations and reduce poverty. (Woskov)

  1. Carefully calibrated business models can unleash powerful forces for good (Woskov)
  2. Innovative business models will lead to novel frameworks (Woskov)
  3. Companies succeed in bottom-of-the-pyramid markets when they leverage the competencies, networks, and business models developed with NGOs (Woskov)

Reading #8: "Leading Clever People" by Gofee and Jones[edit]

SUMMARY: Clever people can have an important impact on a company, but they have unique set of characteristics which require attention from management. The most defining one is that they do not want to be led. (Woskov)

  1. Competitive advantage lies in the ability to create an economy driven not by cost efficiencies but by ideas and intellectual know-how (Ho).
  2. You need to be a benevolent guardian rather than a traditional boss when it comes to clever people (Ho)

Leaders must manage organizational rain for creative people (Dial). Leaders should promote diversity in ideas (Dial). Leaders must establish credibility when working with clever people (Dial). Clever people must be allowed to experiment and fail (Dial).

Reading #9: "Women and the Labyrinth of Leadership" by Eagly and Carli[edit]

SUMMARY: It’s not because of a glass ceiling that women don’t make it into the C-Suite, but the sum of many obstacles that more closely resembles a labyrinth. (Woskov)

  1. The journey for women to the higher level management positions is a complex route full of twists and turns, both unexpected and expected (Ho).
  2. Labyrinths become infinitely more tractable when seen from above. When the eye can take in the whole of the puzzle - the starting position, the goal, and then maze of walls - solutions begin to suggest themselves (Ho).

Reading #10: "What Makes an Effective Executive" by Peter F. Drucker[edit]

SUMMARY: Managers may have differing characteristics; however, every effective manager shares eight simple practices.

1. The first step to being an effective manager is to learn what needs to be done and what is right for the enterprise. The remaining steps flow from this knowledge. (Pauli)

2. Don't let action plans put you in a strait-jacket. They should be used to guide your use of time but are flexible as circumstances change. (Pauli)

Reading #11: "When Growth Stalls" by Olson, van Bever and Verry[edit]

SUMMARY: Successful companies can lose momentum for four main reasons (premium-position captivity, innovation management breakdown, core business abandonment, and talent shortfall), but the good thing is that they are all within management’s control if spotted in time. (Woskov)

  1. Safeguards against revenue growth stalls should occupy the forefront of an organization’s strategy agenda. (Richey)
  2. Stalls are typically sudden, and unforeseen by the organization’s leadership, as core performance metrics are often inept at identifying the onset. (Richey)
  3. COUNTERINTUITIVE: Logical management decisions/actions cause a revenue growth stall to occur. (Richey)
  4. Counter-intuitive: When it comes to identifying growth stalls, if it ain’t broke, fix it anyway. (profitable competencies can and will expire, so you can't rest on your laurels) (Pauli)

Reading #12: "Creativity and the Role of the Leader" by Amabile and Khaire[edit]

  • Forehead slap: One doesn't manage creativity; one manages for creativity. (Skiple)
  • Look for ideas from all levels of the organization, and open the organization to diverse perspectives. (Skiple)
  • In the initial stages of development you want people working at the ends of the Gaussian distribution. (Skiple)
  • Eventually innovation reaches a point where is will be best served by people who know how to take it to market; unfortunately, since the passion for an idea is highest among its originators, projects often lose steam at the handoff. (Skiple)
  • Managers need to provide “paths through the bureaucracy” – powerful constituencies within the company collectively beat things into a shape that more closely resembles the existing business model rather than the opportunity in the market. (Skiple)
  • Remember: gardens also have weeds: managers must not only water and fertilize, but also kill off the stuff that holds no potential. (Skiple)
  • Managers need to elimintate the stigma of failure; the goal should be to experiment constantly, fail early and often, and learn as much as possible in the process. (Skiple)

Reading #13: "Leading Change: Why Transformation Efforts Fail" by Kotter[edit]

SUMMARY: Making fundamental changes in an organization requires eight steps to completed successfully and in the right order. (Woskov)

  1. An urgency rate is high enough when about 75% of a company’s management is honestly convinced that business as usual is totally unacceptable. (Woskov)
  2. When communicating a vision, use every possible channel, especially those that are being wasted in nonessential information. (Woskov)
  3. While celebrating a win is fine, declaring the war won can be catastrophic. (Woskov)
  4. If you can't communicate the mission to someone in 5 minutes and get a response that signifies understanding and interest, then you are not done with the vision phase. (Ho)
  5. In order to lead change, the guiding coalition develops a picture of the future that is relatively easy to communicate and appeals to customers, stockholders, and employers. (Ho)
  6. Change requires creating a new system - which demands leadership. (Richey)

Reading #14: "Strategy as a Wicked Problem" by Camillus[edit]

SUMMARY: Wicked problems can't be solved but can be tamed by involving stakeholders, documenting opinions, communicating, defining the corporate identity, focusing on action, and adopting a "feed-forward" orientation (Dial).

  • Involving stakeholders in may complicate the planning process, but it will facilitate understanding, idea generation, and buy-in (Dial).
  • The corporate identity should incorporate values, competencies, and aspirations and act as the strategic intent of the organization (Dial).
  • Conventional decision analysis and its one final course of action is not effective when addressing "wicked" problems. Leaders should utilize prototypes, pilot programs, and experiments to test potential strategies (Dial).
  • Strategy assumptions must be identified and assessed when dealing with "wicked" problems (Dial).
  1. Not only do conventional processes fail to tackle wicked problems, but they may exacerbate situations by generating undesirable consequences. (Ho)

Reading #15: "The Core Competence of the Corporation" by Prahalad and Hamel[edit]

SUMMARY: A corporation gains its competitive advantage from core competencies, and must be conceived as a hierarchy of core competencies, core products and market-focused business units in order to compete in the changing global economy. (Ho)

  1. The modern corporation can be viewed as a "tree," and the roots are the core competencies. (Skiple)
  2. Core competencies are shared resources that must be allocated by the corporation. (Richey)
  3. Radical changes in management are often necessary to create an organization capable of infusing products with irresisteible functionality or creating products that customers need but have not yet imagined. (Ho)

Reading #16: "The Balance Scorecard: Measures That Drive Performance[edit]

Summary: The complexity of managing an organization today requires that managers be able to view performance in several areas simultaneously—an ability that is achieved through the balanced scorecard. (Pauli)


  1. The balanced scorecard is like the dials of an airplane cockpit: it gives managers comprehensive information at a glance. (Pauli)
  2. Senior managers must be involved in designing/editing the balanced scorecard since they have the most complete picture of the firm’s vision and priorities (not financial experts). (Pauli)
  3. It’s not good enough to just improve operational capacity. Firms must translate the new gains into profits (i.e. put the freed up capacity to work or get rid of it) (Pauli)
  4. How does the balanced scorecard work? It provides answers to 4 basic questions from 4 key perspectives: (Pauli)
  • 1) How do customers see us (customer’s perspective)
  • 2) What must we excel at (internal perspective)
  • 3) Can we continue to improve and create value? (innovation and learning perspective)
  • 4) How do we look to shareholders? (financial perspective)
  1. Leaders must make explicit links between operations and finance (Dial).
  2. A company's ability to innovate, improve and learn is tied directly to the company's value (Ho).
  3. Operational improvements don't automatically equate to financial improvements. (Richey)

Reading #17: "The Ambidextrous Organization" by O'Reilly and Tushman[edit]

SUMMARY: Ambidextrous organizations can exploit present technologies through incremental innovations as well as explore future endeavors through radical innovations by understanding the needs of newly structured businesses, maintaining executive commitment to ambidexterity, and communicating a clear/compelling vision at the executive level. (Ho)

  1. Established companies can develop radical innovations as well as protect traditional businesses by creating organizationally distinct units that are tightly integrated at the senior executive level. (Ho)
  2. The key to an ambidextrous organization is to have a tightly bound senior executive team who are united in purpose when making decisions regarding the "radical" vs. "incremental" sides of the organization. (Pauli)
  3. If need be, "elephants" (i.e. obstacles) should be removed that allow the senior exec team to be ambidextrous. (Pauli)
  4. The ambidextrous vision needs to be well communicated to ensure both the senior execs and the rest of the org understand the strategy and are on the same "sheet of music." (Pauli)
  5. Ambidextrous organizations need ambidextrous executives whom possess understanding and sensitivity regarding the needs of their newly structured businesses. (Richey)
  6. Executives must maintain their commitment to operating ambidextrously, even if their peers are not ambidextrous themselves. (Richey)
  7. A clear and compelling vision, relentlessly communicated by a firm's senior team, is crucial in building ambidextrous designs. (Richey)

Reading #18: "Of Strategies, Deliberate and Emergent" by Mintzberg and Waters[edit]

  1. Strategy can be defined as "a pattern in a stream of decisions," and strategic control is searching for thos patterns. (Skiple)
  2. In a view of strategy as a continuum, the theoretical extremes are deliberate strategies -- those that are realized as they were intended -- and emergent strategies -- those that are realized without any intentions at all. (Skiple)
  3. Strategies will tend to be more deliberate in tightly coupled, centrally controlled organizations and more emergent in decentralized, loosely coupled ones.
  4. Virtually all “real-world” strategies have characteristics of both the umbrella and the imposed models, since the central leadership will neither totally pre-empt the discretion of others, nor totally defer to others.
  5. Emergent strategy does not mean chaos but unintended order, and to manage a learning organization is to search for those patterns and consistencies.
  6. Much strategic adaptation may actually result from unconnected strategies (that may or may not exist clandestinely within an umbrella strategy) that have succeeded and pervaded the organization over time.
  7. Strategic choice requires self-awareness of the patterns in organizational actions and the consequences over time.

Reading #19: "Core Capabilities and Core Rigidities: A Paradox in Managing New Product Development" by Dorothy Leonard-Barton[edit]

SUMMARY: Core capabilities can transform into core rigidities, changing from a positive influence on product development to a negative influence. (Woskov/Ho)

  1. Capabilities are considered core if they differentiate a company strategically. (Woskov)
  2. For a capability to become core, all four dimensions must be addressed. (Woksov)
  3. A project does not have to be aligned with an organization's core capability for the dimensions of that capability to affect development. (Woskov)
  4. Project managers that constructively discredit skills, systems, and values that companies traditionally revere may cause a complete redefinition of core capabilities. (Ho)

Reading #20: "Fundamental Templates of Quality Ads" by Goldenberg, Mazursky, Solomon[edit]

SUMMARY:

  1. Creativity templates generate quality ads due to their ability to facilitate focused creativity, leading to more effective outcomes. (Ho)
  2. Templates are less transient than the ideas produced but can change in the long term.
  3. Templates are a trainable, resource-saving tool that will produce more effective ads. (Dial)

Reading #21: "Exploring Internal Stickiness: Impediments to the Transfer of Best Practice Within the Firm" by Gabriel Szulanski[edit]

SUMMARY: Knowledge barriers (lack of absorptive capacity, causal ambiguity, and an arduous relationship) contribute to the stickiness of internal knowledge transfer. (Ho)

  1. Internal transfer of best practices can be described by a four stage process: initiation, implementation, ramp-up, and integration. (Ho)
  2. The origins of internal stickiness are influenced by four factors: knowledge transferred, source of knowledge, recipient of knowledge, and context. (Ho)
  3. Counterintuitively, knowledge barriers contribute more to internal stickiness of ideas than motivational factors. (Skiple)

Reading #22: "Strategic Alliances Structuring: A Game Theory and Transaction Cost..."" by Parkhe[edit]

  1. In Strategic Alliances, a broken promise in the present decreases the likelihood of cooperation in the future (like in relationships). (Pauli)
  2. Behavioral transparancy (i.e. not being "shady"), long time horizons (i.e. marriage - until death do us part), and frequent interactions promote cooperation. (Pauli)
  3. Reduce fears of being perceived as opportunistic through a show of good faith (i.e. sharing non-recoverable assets like time, money, facility, etc.) (Pauli)
  4. Successful strategic alliances are composed of two building blocks: 1) a mutually beneficial relationship and 2) fading of the fear of opportunism. (Ho)

Reading #23: "Teaching Timeless Truths Through Classic Literature: Aesop's Fables and Strategic Management" by Short and Ketchen, Jr.[edit]

SUMMARY: Classic literature can be used to teach lessons and convey truths in contemporary strategic management. (Ho)

  1. Inexperienced students need help so that lessons in strategic management "stick." (Richey)
  2. Fables provide concise, effective lessons in strategic management. (Richey)
  3. Fables are simple and generalizable, but limited in terms of accuracy. Hence, they are best used in conjunction with theory and case studies. (Richey)

Reading #24: "Firm Resources and Sustained Competitive Advantage" by Jay Barney[edit]

  1. Firms cannot purchase sustained competitive advantages, but must find them in the rare, imperfectly imitable, and non-substitutable resources already controlled by the firm. (Dial)
  2. Managers analyze the potential economic performance of a company that leads to a sustained competitive advantage. (Dial)
  3. In order to have a first mover advantage, firms in an industry must be heterogeneous in terms of the resources they control. (Pauli)
  4. SWOT analysis decomposes the resource-based view (SW) and environmental models (OT) of competitive advantage. (Richey)

Reading #25: "Dynamic Capabilities: What Are They?" by Eisenhardt and Martin[edit]

SUMMARY: Investigates the characteristics of dynamic capabilities in different markets and how they ultimately contrast to some of the assumptions made in the resource based view (RBV) of the firm. (Woskov)

COUNTER-INTUITIVE: Dynamic capabilities are simple in high-velocity markets. (Woskov)

COUNTER-INTUITIVE: While dynamic capabilities are traditionally thought to be unique to each firm, they actually have commonalities (or "best practices").

  1. Sustained competitive advantage lies in resource configuration, not dynamic capabilities. (Dial)
  2. Dynamic capabilities are complex and sustainable in moderately dynamic markets. (Woskov)
  3. Variations deepen capabilities in moderately dynamic markets, but selection is key in high-velocity markets. (Woskov)
  4. High-velocity markets are a boundary condition for RBV. (Woskov)
  5. In a dynamic market, competitive advantage is usually short term. (Woskov)

Reading #26: The Stakeholder Theory of the Corporation: Concepts, Evidence, and Implications[edit]

  1. Who is harmed or benefited by the firms actions? The answer identifies your stakeholders. (Pauli)
  2. Stakeholders have interests in a firm regardless if the firm has interest in them. (Pauli)
  3. To be a legitimate function, managers should attempt to repond to stakeholder interests. (Pauli)
  4. Managers should select activities and allocate resources to obtain benefits for the stakeholders. (Dial)

Pauli is my hero

Reading #27: The Cornerstones of Competitive Advantage: A Resource-Based View[edit]

  1. Firms that have heterogeneous resources produce more, satisfy customers more, or at least break even. (Pauli)
  2. The 2 key features of imperfect mobility (i.e. tradable resources but more valuable to owing firm) lead to a sustained competitive advantage: 1) imperfect mobile resources remain available to firm and 2) Rents will be shared by the firm
  3. Heterogeneity must be relatively durable over time in order to add value to a firm.
  4. A firm must have the foresight or good fortune to acquire a position with the absence of competition to see above average returns.
  5. What distinguishes monopoly profits from Ricardian rents is that monopoly profits result from a deliberate restriction of output rather than inherent scarcity of resource supply.
  6. Heterogeneity is necessary for sustainable advantage, but not sufficient. (Pauli)
  7. All strategy converges on the resource-based view of the firm. (Richey)

Reading #28/29: Exploration and Exploitation Within and Across Organizations by Dovev Lavie, Uriel Stettner, and Michael Tushman[edit]

  1. Managers should balance exploration/exploitation to benefit organizational performance. (Pauli)
  2. Senior Management needs to be proactive and involved in decision making for balancing with organization separation. (Pauli)
  3. Stable environments favor "exploiters," while turbulent environments favor "explorers." (Richey)
  4. Exploration and exploitation form the ends of a continuum of organizational activities. (Richey)

Reading #30: Are You Sure You Have a Strategy? by Hambrick and Fredrickson[edit]

One Sentence: Success cannot happen without a “grand and well-considered aspiration,” and the five elements of the “strategy diamond” offer a way to craft and articulate that aspiration. (Skiple)

A truly effective strategy provides an integrated, overarching concept of how the business will achieve its objectives. The five elements of Hambrink and Fredrickson's stategy framework (Skiple):

  1. Areans: Answer to the question, "what business will we be in?"
  2. Vehicles: The means to attaining market presence; not an afterthought or "tactic."
  3. Differentiators: Weapons we will be using in the fight for market position; consistent and mutually-reinforcing.
  4. Staging: Speed and sequence of major moves; an art, not a science.
  5. Economic Logic: Clear idea of why people will pay more and why our costs will be less.

Heuristics:

  • When executives call everything "strategy," and end up with a collection of strategies, they create confusion and undermine their own credibility. (Skiple)
  • Staging decisions are driven by resources, urgency, credibility, and the need to pursue early wins. (Skiple)
  • Staging decisions are most important for initiatives where the gaps between the status quo and the strategic intent are the greatest. (Dial)

Reading #31: In Praise of the Incomplete Leader by Ancona, Malone, Orlikowski, and Senge[edit]

SUMMARY: A leader cannot be expected to do everything well, but must balance his or weaknesses with the help of others. (Woskov)

  1. Leadership is a set of four capabilities: sensemaking, relating, visioning, and inventing. (Woskov)
  2. Leaders are typically strong in only one or two capabilities. (Woskov)
  3. The sooner leaders stop trying to be all things to all people, the better off their organizations will be. (Woskov)
  4. Leaders must identify their strengths and then search for others who can provide the things they are missing. (Dial)

Made To Stick Chapter Discussions[edit]

Chapter 1: Simple[edit]

  1. Simplicity does not mean dumbing down a message to be "monosyllabic," but rather finding the core of an idea. (Pauli)
  2. The Curse of Knowledge makes it difficult for us to express our ideas in simple terms to people that do not share our knowledge. (Fass + class)
  3. Do not bury the lead of your message. (Dial)
  4. Determine a simple, core statement to remain focused and to prevent muddling. (Dial)
  5. Do not allow uncertainty to paralyze others' decisions. Provide one core message. (Dial)
  6. Share the core by using sticky principles and repeat often. (Dial)
  7. Simple = Core + Compact (Dial)
  8. Simple ideas are elegant and useful. (Dial)
  9. Use visual proverbs to repeat your core message. (Dial)

Chapter 2: Unexpected[edit]

  1. Surprise can be better achieved not by relaying knowledge, but by pointing out a gap in knowledge. (Woskov)
  2. Unexpected ideas are more likely to stick. (Richey)
  3. To make an idea "stickier," you must find the core, figure out what's counterintuitive, then use it to break the audience's schema. (Richey)
  4. Common sense is the enemy of sticky messages. (Richey)

Chapter 3: Concrete[edit]

SUMMARY: Concreteness makes ideas sticky by converting abstract ideas into more tangible ideas, making it easier to understand. (Ho)

  1. The only barrier to concreteness is forgetfulness, which may lead us from the tangible to the abstract. (Ho)
  2. Focus and mobilize the brain by making ideas concrete. (Dial)

Chapter 4: Credible[edit]

SUMMARY: This chapter explains how to make ideas believable.

  1. Antiauthorities (regular people) are just as effective at making ideas credible as authorities (experts and celebrities). (Woskov)
  2. Adding details can make an idea credible by giving the audience a mental picture. (Woskov)
  3. Statistics are helpful when they focus on the relationship (not the actual numbers) and use a the human-scale principle. (Woskov)
  4. Credibility can sometimes be gained by only using one example (the Sinatra Test). (Woskov)
  5. Hearing about someone who fooled someone else is not as strong as actually being fooled (testable credentials). (Woskov)

Chapter 5: Emotional[edit]

"Make people care"

  1. Create empathy by referring to specific individuals rather than the masses. (Pauli)
  2. Avoid overusing or abusing words (e.g. relativity, unique, sportsmanship). (Pauli)
  3. Appeal to self-interest and/or people's identity. (Pauli)
  4. Get the audience out of "Maslow's Basement." (Skiple)

Chapter 6: Stories[edit]

Summary: A credible idea makes people believe, an emotional story makes them care, but the right story makes them act. (Skiple)

  1. It is often enough to just be able to recognize a good story when you come upon one. (Skiple)
  2. Using stories rather than simply summarizing key points lets the audience remember the experiences that taught you the lessons in the first place. (Skiple)
  3. Good stories are much like mental simulations -- actually simulating the action as opposed to simply seeing a picture in your head. (Skiple)
  4. Mental practice alone produces two/thirds of the benefit of actual practice. (Skiple)

Book Reviews[edit]

Predictably Irrational[edit]

  • Your decisions are predictably irrational. (Dial)
  • Break the cycle of "relativity" by comparing alternatives broadly versus against each other. (Dial)
  • Question repeated behaviors to counter the force of "imprinting." (Dial)
  • Use "zero cost" to entice people to do the right thing. (Dial)
  • "Social norms" are more effective than "market norms" for motivating behavior. (Dial)
  • People will make better decisions if they are aware of the effect of altered emotional states on their decision-making. (Dial)
  • "Self-control" measures and penalties help counter the force of procrastination. (Dial)
  • Awareness of the force of "ownership" can help mitigate its effect on decision-making. (Dial)
  • Make decisions and close doors versus working to keep options open. (Dial)
  • Attempt to remove previous knowledge and expectations from the decision-making process. (Dial)
  • Assess the relationship between price and quality rather than assuming price indicates quality. (Dial)
  • Avoid bad situations, review values, and deal with money to ensure character is a positive force in decision making. (Dial)
  • Don't let your sense of reputational utility affect your decision-making: Order first. (Dial)

The Innovator's Solution[edit]

  1. By pouring resources into their core businesses and listening to their best customers, firms leave themselves vulnerable to disruptive innovations. No company is ever immune (Ho).
  2. Disruptive innovation either target new markets or the low-end of current value networks (Ho).
  3. Resources, processes and values determine an organization's capabilities to successfully leverage innovations (Ho).
  4. Executives must serve three roles in the corporation:1) straddle the interface between disruptive growth businesses and mainstream businesses within the corporation, 2) shepherd the disruptive growth engine through a set of new processes, and 3) be aware of changing strategies (deliberate to emergent) (Ho).

Blue Ocean Strategy[edit]

  1. A firm must not only narrowly focus on competing in existing markets (i.e. red oceans), but rather must pursue uncontested marketspace (i.e. blue oceans) to ensure survivability and profitability. (Pauli)
  2. When it comes to executing a blue ocean strategy, it's important to transform the extremes--the people and activities that exercise a disproportionate influence on performance (Pareto rule) (Pauli)
  3. During the initial phase of creating a blue ocean strategy, focus on the big picture (not the numbers).
  4. When looking for blue oceans, don't forget to consider both your customers and your non-customers.

Strategic Speed[edit]

  1. Leaders must focus on clarity, unity, and agility in order to successfully implement strategic initiatives. (Richey)
  2. Speed in implementing strategy means nothing, unless the firm generates value. (Richey)
  3. Strategic speed is where urgency and execution converge. (Richey)

How the Mighty Fall by Jim Collins[edit]

Summary: Even truly "great" companies can fail epically, and there is a pattern to such failure.

  • Collins' five stages of decline:
    • Stage 1: Hubris born of success;
    • Stage 2: Undisciplined pursuit of more;
    • Stage 3: Denial of risk and peril;
    • Stage 4: Grasping for salvation;
    • Stage 5: Capitulation to irrelevance or death.
  • Once a company enters stage five (capitulation) it can not recover, but it can avoid entering the stage if it returns to the framework that made it a "great" company to begin with.

The Tipping Point[edit]

SUMMARY: The Tipping Point refers to the moment during an epidemic when there is dramatic change. Gladwell uses the word “epidemic” to describe how products and ideas spread like a virus. This book is about what factors make things "tip". (Woskov)

  1. There are three rules that cause epidemics to tip: The Law of the Few, The Stickiness Factor, and The Power of Context. (Woskov)
  2. The Law of the Few is comprised of three important people: Connectors, Mavens (info specialists), and Salesman. (Woskov)
  3. The Stickiness Factor states that the message itself has a role in whether an epidemic tips. (Woskov)
  4. The Power of Context states that epidemics are sensitive to the times and places they occur. (Woskov)