{"id":3138,"date":"2015-02-02T20:00:37","date_gmt":"2015-02-03T04:00:37","guid":{"rendered":"https:\/\/masonmyers.com\/?p=3138"},"modified":"2015-02-01T07:56:12","modified_gmt":"2015-02-01T15:56:12","slug":"strategy-lessons","status":"publish","type":"post","link":"https:\/\/masonmyers.com\/strategy-lessons\/","title":{"rendered":"Simple Strategy Lessons: Better before cheaper. Revenue before costs."},"content":{"rendered":"

Sometimes the best ideas and best advice are the most simple.\u00a0\"Strategy<\/a>When I read the following article\u00a0a while back, I loved it. And believed it. And continue to believe it. Michael Raynor and Mumtaz Ahmed from Deloitte Consulting performed a study that began with 25,000 companies to find outstanding companies that truly perform. \u00a0A longer piece they wrote for the Harvard Business Review can be found here<\/a> and it goes beyond their simple “truisms.” Their book is “<\/a>The Three Rules: How Exceptional Companies Think<\/a>.”<\/a><\/p>\n

Here are there three rules, simplified:<\/h3>\n
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  1. Better before cheaper. \u00a0In other words, compete on differentiators other than price.<\/strong> \u00a0Some companies create a successful strategy on price (Walmart, Costco, GEICO, etc.) but I agree that it is more likely that one will be able\u00a0to create a competitive advantage on things other than price. With price and efficiency, it is too easy for competitors to observe what you are doing and eventually copy your product or service. With other elements of differentiation, it is easier to find areas where your competition could not compete even if they wanted to because of something inherent in their product, their customer base, their investor base, their sales channel, or from\u00a0many other factors.<\/li>\n
  2. Revenue before costs. \u00a0That is, prioritize increasing revenue over reducing costs.<\/strong>\u00a0 It is difficult to be world-class at reducing costs more than the next guy. \u00a0It is just too easy for others to copy (usually) and reducing costs\u00a0as a core competency is not really a competitive advantage. Being frugal and cost-conscious is a part of many successful companies, but it is not their core strategy. Plus, reducing costs is difficult and no fun. It creates a different vibe. Some people can be excellent at this strategy, such as 3G Capital or certain other private equity funds, but I agree that it is not a primary path to greatness.<\/li>\n
  3. There are no other rules, so change anything you must to follow Rules 1 and 2.<\/strong><\/li>\n<\/ol>\n

    Foundational concepts<\/h3>\n

    As the authors write, “The rules don\u2019t dictate specific behaviors; nor are they even general strategies. They\u2019re foundational concepts on which companies have built greatness over many years. How did these organizations\u2019 leaders come to adopt them? We have no idea\u2014nor do we know whether the executives even followed them consciously. Nevertheless, the rules can be used to help today\u2019s and tomorrow\u2019s leaders increase the chances that their companies, too, will deliver decades of exceptional performance.”<\/p>\n

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