Quote: "One of the book's claims, which I found shocking at first, was that in a large organization, executives don't set strategy".
Yeah, let's agree to disagree and let's take a look at history. 1 - Microsoft. Bill definitely had a strategy, one that almost cost him his sanity at the end of 90's, but nevertheless made Microsoft in only 25 years a behemoth. 2 - Apple. Steve definitely had a strategy when returned to Apple. Got all hardware licenses back and worked on iPhone until was the game-changer. 3 - Amazon. You going to tell me Jeff didn't had any strategy? Yeah right.
You know who didn't had a strategy after almost 100 years of strategies of its CEO's? Kodak. Remember Kodak? Yeah, it took only 15 years of streams of CEO's to be one per year with no strategy and a board full of idiots to make that company disappear from the face of Earth.
> So what, then? A company just drifts in the void, with no strategy?
> Not exactly. It's harder than that. What executives need to do is come up with organizational values that indirectly result in the strategy they want.
> That is, if your company makes widgets and one of your values is customer satisfaction, you will probably end up with better widgets of the right sort for your existing customers. If one of your values is to be environmentally friendly, your widget factories will probably pollute less but cost more. If one of your values is to make the tools that run faster and smoother, your employees will probably make less bloatware and you'll probably hire different employees than if your values are to scale fast and capture the most customers in the shortest time.
The claim is that as a CEO, you can't make the right decisions because you're too far from the individual decisions that need to be made. If you intervene in decisions directly, you risk overruling the people who are supposed to have the information needed.
So you need a different lever than dictating the decisions made, even the strategic decisions. You do that by having the right people and getting alignment between them. That's what the author calls values. Telling everyone "our strategy is to have a game-changing product like the iPhone" lacks sufficient detail to be called a strategy. Getting into more detail risks making decisions you may not have the information to make. So you set values, like "we focus on the overall end-user experience, not just hardware or software." You get people on board with them. If you pick the right values, the strategy you want should emerge from the individual decisionmaking of the people below you.
"we focus on the overall end-user experience, not just hardware or software." sounds like strategy to me (perhaps it needs to become a little bit more elaborate than that, but strategy at least).
Imo, Strategy at a high level is high level guidance. What is important to focus on and what should we not focus on (and preferably why). Some companies do however have these sneaky strategies like emergent strategy that is not set from the top but let it emerge along the way, possibly from the bottom up, based on the culture or whatever. Some companies simplify it to the extreme with the "simple rules" strategy (1-3 simple rules which steers the company, such as "turnover first, profit later").
Strategy can be very important, but usually takes a lot of time to affect the bottom line. You don't need a strategy (well, that in itself is kind of a strategy). Anyhow, the rest (the implementation/execution) is always more important - just add with startups (the idea is 1%, execution 99%).
What executives do is come up with organizational values that indirectly result in the strategy they want.
That's still incorrect. Microsoft didn't come up with Internet Explorer because Bill Gates set some organizational values. They came up with Internet Explorer because Gates identified Netscape as an existential threat to the company and told his engineers and product managers to do whatever it took to come up with a viable response. Similarly, when Steve Jobs designed the original Macintosh (or, later, when he came up with the iPhone), he definitely had a strategy in mind. It wasn't some values-setting, which led to a lower-level engineer or product manager creating the product. Likewise, when Jeff Bezos sent out his famous communique [1] mandating that Amazon move to a service-oriented architecture, I'm pretty sure he had some idea of a strategy.
I can keep going. When Larry Page and Sergey Brin decided to spend 9 figures on a video-sharing site with no history of profitability and a massive potential copyright liabilities, I'm pretty sure they had a strategy in mind. Likewise, when Zuckerberg decided to spend ten-figures on a messaging app, I'm pretty sure he wasn't doing it to "set values". The entire category of mergers and acquisitions is inherently strategic -- companies only seek mergers when their CEOs have a specific strategic outcome in mind.
Many at Kodak knew they were toast and the smart executives left. Tens of thousands of patents and employees having to do with complex chemistry around photography and almost no natural edge against competitors that were cleaner camera plays like Canon. The clearest strategy for the agents of the firm to capitalize on their own information was to leave.
The hero comment is beside the point. When a company literally force the government to make laws in retaliation for the shitty way a company runs their business is proof the “strategy” is unethical and illegal.
Each of the companies also pays the livelihoods for tens of thousands of people, perhaps hundreds of thousands. Thats one measure of good I suppose. Opinions on net good will differ.
Gates is doing a good job at PR if nothing else. In a cynical view (that is not mine) you could see it as him stealing $100, giving away $50, and being hailed a hero.
Yeah, let's agree to disagree and let's take a look at history. 1 - Microsoft. Bill definitely had a strategy, one that almost cost him his sanity at the end of 90's, but nevertheless made Microsoft in only 25 years a behemoth. 2 - Apple. Steve definitely had a strategy when returned to Apple. Got all hardware licenses back and worked on iPhone until was the game-changer. 3 - Amazon. You going to tell me Jeff didn't had any strategy? Yeah right.
You know who didn't had a strategy after almost 100 years of strategies of its CEO's? Kodak. Remember Kodak? Yeah, it took only 15 years of streams of CEO's to be one per year with no strategy and a board full of idiots to make that company disappear from the face of Earth.