2. “A hallmark of true expertise and insight is
making a complex subject understandable”
Client to Consultant: “So I am paying you to ask me
questions”
Consultant to Client: “Absolutely! Without these questions
you are not identifying your main challenges”
4. Strategy and Two Popular
Misconceptions
1. Strategy is formulaic or
mechanistic
2. Strategy is goal-setting
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5. The Three Key Hallmarks of Fake
Strategy
Failure to Face
the Challenge
Mistaking Goals
for Strategy
Bad Strategic
Objectives
• You must define the challenge
• If you cannot define the challenge, you
cannot evaluate the strategy or improve it
• Do not confuse desire with a plan to
overcome obstacles
• Fail to address critical issues
• Objectives are impracticable
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6. Bad Strategy in 3D
The Focus is on 3D
• Desire;
• Drive; and
• Determination
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7. The 3d Essence of Bad Strategy
Desire
Drive
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Determination
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8. Incoherence:
The Essence of Bad Strategy
• At best pursuing multiple unconnected
objectives
• At its worst, it involves pursuing conflicting
objectives
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9. The Cost of Bad Strategy
It is a source of
weakness
because it is
incoherent
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10. So what is Genuine or
Good Strategy?
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11. Essence of Genuine Strategy:
The D² rule
• Avoid Dumb
• Focus upon Direction
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12. The Essence of Good Strategy
Direction
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13. What is Direction?
• It’s focus
• And this can
only be
obtained by
making choices
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18. Pre-requisite for Genuine Strategy:
Define the challenge
• If you apply careful consideration and define
then challenge then you are well on the road to
good strategy
• If you fail to identify and analyze the
obstacles, you cannot have a strategy.
– Instead, you have either a stretch goal, a budget, or
a list of things you wish would happen”
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19. The Absence of Good Strategy
Explained
Good Strategy
Bad Strategy
• Begins with the • Begins with an
admission that
implicit denial
there is always a
that there is any
specific problem
specific problem
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20. Essence of Good Strategy
Diagnosis
Guiding
Policy
(the signpost
indicating future
direction)
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Coherent
Action
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21. Strategy is the Path
• The How
• The Why
(Genuine) • The Where
Strategy • The When
• The Who
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22. What is Genuine Strategy?
• A cohesive response to an important challenge
• A genuine or good strategy must therefore
include the details – the actions to be
implemented
• Strategy is not grandiose goals – it’s about how
an organization will move forward
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23. Developing Genuine or
Good Strategy
• It emerges from identifying
one or two critical issues in the
situation and then focuses and
concentrates action and
resources on them.
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24. Bad Strategy vs Good Strategy
Bad Strategy:
Widespread
Good Strategy: Rare
• Urges achievement of a
goal…but nothing else
• It’s essentially wishful
thinking
• ‘Problems’ are glossed over;
• Tries to meet conflicting
goals and ducks making
hard choices
• Is honest in identifying
challenges
• develops a cohesive
approach to overcome them
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26. Coherence:
The Essence of Good Strategy
• Good strategy does NOT simply build upon
existing strength
• It is a source of strength because it is coherent
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27. Strategy and Competitive
Advantage
• Competitive Advantage often arises simply by
having a genuine or good strategy
• Because most organizations have a fake or bad
strategy
– Sure they have goals but are essentially guided by
‘spend more, work harder’ mantra
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28. The Advantage of Having Good
Strategy
• Focus – as it is
so unexpected
by rivals
• And as such
identifies the
“don’ts” as well
as the “do’s”
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30. Remember
it's just as important to decide
what not to do in business as
it is to determine what to do
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31. What makes for a good strategy?
• Harnessing power and applying it where it will
have greatest effect
• We can find good examples of this
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32. Sources of Power:
Leverage
Strategic leverage arises from a mixture of:
1. Anticipation
2. Insight into what is most pivotal or critical in
a situation;
3. Making a concentrated application of effort
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33. OK. I now get it. Strategy and
goals are two different
things.
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35. But business success is
simply about being
better. Isn’t it?
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36. The “Being Better” Argument
• In order to succeed, it’s true you do need to
possess at least one advantage:
• Better
• Cheaper
• Faster
• Richer
• Stronger
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37. The “Being Better” Argument
• But simply ‘being better’ provides only shortlived success
• The ‘better’ is based only on operations
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38. Three Questions
1. What biblical story do you most associate with
an underdog defying expectations to beat a more
impressive opponent?
2. Who is the greatest boxer of all time, and indeed
considered the greatest sportsman of the 20th
century?
3. Who are considered the greatest ever football
(i.e. soccer) team?
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40. What explains their success?
Their success was based
upon Genuine Strategy
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41. Example 1: David vs Goliath
David
• Youthful
• Inexperienced in hand-tohand conflict
• Physically weak
• No protection
Goliath
• Mature
• Experienced in hand-tohand conflict
• Physically strong
• Heavily protected
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42. Example 1: David vs Goliath
• If David is to win, he
only had one
option…and his insight
enabled him to identify
that fact
• Goliath – classic case of
‘brawn and no brain’
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43. Lessons from David vs Goliath
Smarter can
beat better
• Good strategy comes
from fresh insight into
strengths and
weaknesses, and
opportunities and threats
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44. Facing ‘Goliath’
• So developing a strategy to topple the
‘invincible’ is not easy
• Do you try and copy the best – but the core
competence of the best is always hard to
imitate
• Or do you have to invent a superior solution?
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45. Example 2: Ali vs Foreman
World Heavyweight Championship Fight, Zaire,
October 1974
The Challenger
32 years of age
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The Defending World Champion
25 years of age
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46. Ali vs Foreman:
Comparison Based Upon the ‘Better’ argument
Ali
Foreman
• Former World Champion
• Past success was based on
being ‘better’
• Past his peak in terms of
being ‘better’
• 32 years of age
• Making a comeback after
years without competitive
fights
• Defending World Champion
• Present success was based
on being better
• At his peak
• 25 years of age
• Getting better with each
fight
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50. Ali vs Foreman
•
•
•
•
•
Two boxers
One, the defending world champion
The other, the former, older champion
One Common goal
Two Different Strategies
– Ali – Good Strategy
– Foreman – Bad Strategy
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51. Ali vs Foreman
Ali Practiced Good Strategy
George relied on Bad Strategy
• diagnosed his critical problem
• He could no longer “float like
a butterfly, sting like a bee”
over 15 rounds against a
younger opponent
• The 3D Effect
• So he developed an action plan
to overcome his critical
weakness
• Rope-a-dope
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52. Rope a
Dope
Ali Wins by a
Knockout in
Round 8.
Foreman had run
out of steam.
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53. Two Vital Lessons from
Ali vs Foreman
1.
Even the very best
are eventually
overtaken;
2.
If they are to
continue winning,
they need genuine
strategy
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54. Lessons from “Rope-a-dope”
• Exhaust your rival’s
resources through
suckering them into
constant expenditure of
ineffective yet
debilitating effort
• When you look at the
market for some
products, do we see that
the market leader is
employing the “rope-adope”?
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55. Example 3:
Barcelona’s Dominance of World Soccer
• The present Barcelona side, Spanish and
European champions, are considered the greatest
team of all time;
• It features Lionel Messi (born 24 June 1987), the
World Footballer of the Year (2009, 2010)
• Spain, current European and World Champions, is
heavily dependent upon Barca players
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56. Example 3:
Barcelona and Spain’s Dominance of World
Soccer
This example shows that this success is
based upon a genuine strategy that
was developed 40 years ago
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57. Example 3:
Barcelona and The Dutch Legacy
• In the early 1970s, Barcelona was managed by
Dutch coach, Rinus Michels
• He bought the player Johan Cruyff – ‘the Messi’
of his generation
• Cruyff managed Barcelona in the late 1980s-mid
1990s
• One of his key players was Josep Guardiola,
manager of Barcelona since 2008
• Today the present Barca team are hailed as the
greatest ever side
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58. Example 3:
Barcelona and The Dutch Legacy
• In 1970 Brazil beat Italy 4-1 in the soccer
World Cup final in Mexico
• The Brazilian team was considered invincible
• The next World Cup was in Germany in 1974
• But how could anyone beat Brazil?
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59. Example 3:
The Dutch Influence on Soccer
• Rinus Michels, the coach of the Dutch national
team, concluded that no one could match
Brazil
• So a radical new approach was required
• He invented ‘total football’
• At the heart of this new system was the player
Johan Cruyff
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60. Total Football Defined
• In Total Football, a player who moves out of
his position is replaced by another from his
team, thus retaining the team's intended
organisational structure. In this fluid system,
no outfield player is fixed in a nominal role;
anyone can be successively an attacker, a
midfielder and a defender. The only player
fixed in a nominal position is the goalkeeper.
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61. The Immediate Outcome
• In 1974 Holland beat Brazil but were beaten in
the final 2-1 by the host country Germany
• In 1978 Holland was again beaten in the final
by the host nation Argentina
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62. Barcelona F.C:
The Lasting Legacy
• Michels introduced ‘total football’ to
Barcelona
• The commitment to ‘total football’ continued
under Cruyff
• Cruyff recognized the exceptional ability
required to implement ‘total football’
• He thus established in 1978 “La Masia”, the
youth academy to train young players in the
system from an early age
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63. Barcelona F.C:
The Lasting Legacy
• One of the first graduate from ‘‘La Masia” was
Guardiola, exceptional player and manager;
• Today’s current midfield of Xavi, Iniesta and
Fabregas are all graduates of “La Masia”;
• Messi is also a product of the youth academy
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64. Barcelona F.C: The Lasting
Legacy
Barcelona F.C.
• When Barca won the
European Champions
League in 2009, 8 of the 11
players were graduates from
the youth system
Spanish National Side
• When Spain won the 2010
World Cup the 22 man
squad included 8 Barca
players and 6 were in the
starting 11 for the final
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65. The Lasting Legacy:
From Total Football to Tiki-taka
Tiki-taka has been variously described as
• "a style of play based on making your way to the back of the net
through short passing and movement"
• a "short passing style in which the ball is worked carefully through
various channels, and
• a "short passing, patience and possession".
•
The style involves roaming movement and positional interchange
amongst midfielders, moving the ball in intricate patterns, and sharp,
one or two-touch passing.
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66. The Lasting Legacy:
From Total Football to Tiki-taka
• One of the weaknesses of Spanish sides and the
national team was that their players were often
much smaller and less physical than players from
other nations (e.g. Northern Europe, Africa);
• Tiki-taka focuses on movement, possession and
skill
• Some of the best players for Barcelona and Spain
are physically small
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67. Barcelona and Competitive
Advantage
Differentiation
• Barcelona competes through
innovation – it has
developed a unique style or
brand of football
Low Costs
• The youth academy enables
Barcelona to produce the
world’s best players at low
costs;
• This reduces the club’s need
to spend in excess of $50m
per player
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68. Barcelona and Competitive
Advantage
Competition:
• competitors have so far failed
to overcome the Barcelona
system;
• This is despite the fact that
arch-rivals, Real Madrid have:
• acquired the world’s most
expensive player ($132m);
Customers:
• Barcelona is the world’s
most popular club as its
style is uniquely
entertaining;
• It has 20m ‘likes’ on
facebook, narrowly beating
Real Madrid
• the world’s highest paid soccer
manager (about $20m)
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69. Barca Has Clear Core
Competencies
• “Core competencies
are the most
significant value
creating skills within
your corporation and
key areas of expertise
which are distinctive
to your company and
critical to the
company's long term
growth”.
• It can be leveraged
widely
• It’s hard for rivals to
imitate
• It’s of great value to
customers
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70. 1. Multiple Lessons from Barca and
its Genuine Strategy
• It arose from a foreign idea (i.e developed in
Holland)
• It involved honest internal analysis and
identification of weakness;
• Indeed the essence of the new strategy is to render
weaknesses that cannot be overcome obsolete;
• It has received constant commitment over 40
years – even in ‘difficult’ times;
• It is now delivering the best ever results as the
original business model (i.e. total football)
evolved to ‘ticki-tacka’;
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71. Multiple Lessons from Barca and its
Genuine Strategy
1. It is centered upon differentiation (i.e.
innovation);
2. The commitment to innovation compelled a
focus upon New Product Development (i.e.
the youth academy)
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72. Multiple Lessons from Barca and its
Genuine Strategy
3. New superstar brands (i.e. players) are
developed at low cost and sourced locally and
internationally;
4. Costly acquisitions are seldom required
– and even when they are they are graduates of La
Masia who were allowed to join other clubs
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73. Multiple Lessons from Barca and its
Genuine Strategy
5. Even when Barca is briefly overtaken by a
‘better’ team, it is without equal strategically,
so the strategy is a constant that ultimately
prevails
6. Barca may not always win, but its strategy
always delivers exceptional value to its
growing number of customers globally
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74. Barca vs Real Madrid:
Genuine vs Fake Strategy
Barca
•
•
•
•
•
Genuine strategy
Commitment to core values
Consistency
Succession planning
Relies primarily upon
organic growth (i.e.
development of players and
managers)
Real Madrid
• Fake Strategy – all about
goals;
• Lacking core values
• Inconsistency
• Absence of succession
planning
• Relies primarily upon
external growth (i.e.
acquisitions of players and
managers)
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75. Apple:
the corporate Equivalent to Barca
• Apple has a genuine strategy;
• At one time it struggled but remained totally
consistent to its strategy;
• It seized opportunity (i.e. the iPod) and has
refined its original strategy with each
successive product and/or service
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76. Apple:
the corporate Equivalent to Barca
• Apple can/should expect to be overtaken
briefly in some areas;
• But by applying its genuine strategy it can
expect to once again come out tops
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78. Conclusions
1. David was ‘smarter’ than
Goliath
2. Ali extended his success by
transitioning from ‘better’ to
‘smarter’
3. Barca relied on being ‘smarter’
to get ‘better’ and is now best
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79. Conclusions
1.
2.
3.
4.
Apple was ‘smarter’ than PC
producer;
PC producers were briefly ‘better’;
But Apple was the ‘smarter’ and used
this to conquer new markets, leaving
PC producers to fight over scraps
Apple does not always have to be
‘better’ so long as it’s always
‘smarter’
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