This was an interesting book, sometimes fun. It is focused on strategy in a business world prone to disruptions and changing conditions. Though perhaps slightly dated now, eight years after it was published, it was certainly cutting-edge then in 2017. Author Sid Mohasseb is an entrepreneur, venture capitalist, investor, and business thought leader. I bought the nice hardback version from the Dollar Tree for $1 around 2018 or 2019. This book is amply peppered with quotes from business, thought, political, military, and other leaders and successful people.
Part
One is entitled Hopes and Fears: Past and Future. The first chapter
examines addiction to outmoded ways of seeing and acting. He gives the sobering
data that the vast majority of startups don’t find the capital they seek and
end up failing. He also notes that companies and CEO tenures don’t last as long
as they used to. He gives three reasons for this: 1) more diverse environments
which are less predictable, 2) the pace and impact of change have increased due
to technological innovation, and 3) better interconnectivity among businesses
has great advantages but also risks. These factors should not be ignored.
Mohasseb recounts his own experiences and some successes and failures of
heading or ignoring these factors.
Being
flexible and accommodating disruption is one of the lessons of the book. Being
resistant to change can be hazardous. Resisting change is reinforced by
confirmation bias and overconfidence bias. Status quo bias, group thinking
bias, and “now” bias may be other factors.
“The age-old recipe for success was to gather data,
analyze it, hypothesize around insights, choose the best plan, then execute
that plan for the ensuing years. Today, this simply will not work. Why? Because
set plans are by definition static, and the world in which we live and compete
is dynamic, changing constantly. New technology allows for data points to come
in from everywhere, all the time.”
Fixed plans are simply not
adaptive enough for dynamic markets and situations, he argues. He talks often
about moments of insight he calls “Aha” moments and how certain ways of
thinking can foster them.
He cautions against corporate
overconfidence. He emphasizes constant evolving and gives a three-fold formula
for evolving: 1) align with uncertainty, 2) appreciate reality, and 3) aspire
for more.
The ability to deal with
disruptions is very important, especially at a time when business and digital
disruptors were popping up all over.
Part Two is entitled Not
Too Fast: Let’s Get Grounded. He recounts a bit of the history of the study
of business strategy, arising from the Stanford Research Institute in the early
1960s, which defined business strategy simply as “a systematic means by
which a company can become what it wants to be.” Business strategy was
often modeled on military strategy. He mentions the influence of former GE CEO
Jack Welch in the 1990s and Harvard Business School’s Michael Porter, who
advocated for “competitive advantage.”
Mohasseb does not mention AI
but talks a lot about some of its precursors, like data analytics,
digitization, the internet of things (IoT), and Big Data. These things enable
faster and better business decisions and lead to insight. These things also
lead to bigger and more data, which set the stage for the AI innovations we are
seeing today. He does note that the Internet of Things (IoT) would generate
massive amounts of new data, which it has and continues to do. From data
analysis, we can generate insights (now AI can help with that).
Mohasseb notes that big
investments were being made in data analytics and big data. Cloud computing was
taking off at the time as well. Computing and data storage costs were dropping.
He notes that bigger and more data do not confer strategic advantages without
analyzing that data to inform decision-making. Analytics can and often does lead to
optimization. Making equipment more efficient through optimization can save
money. This continues to be true. He sees data as simply one ingredient in a
recipe for success. It is also, he says, a valuable corporate asset. Analyzing
it can lead to insight and optimization. In a historical context, he sees the
last hundred years as an age of manufacturing followed by an age of
distribution, and predicts an age of obsession with the customer that big data
can aid.
“Let’s not just “compete on analytics.” Let’s “compete
on analytically informed and dynamic strategies.”
He says the battle over
analytics will soon be over when all companies can access the same capabilities
and intelligence. He also warns that basic business fundamentals should not be
ignored.
“The science of strategy is to leverage machines and
systems to extract insights from data quickly and understandably. However, real
competitive edge has always come from comprehension.”
“The artful part of strategy is knowing when to go to
war and when not to.”
This refers to knowing when
to make certain decisions and moves.
“The secret to success is to effectively combine the art
and science of strategy.”
He talks about augmented
intelligence that comes from people partnering with machines. We are seeing
quite a lot of this now with AI-enabled systems, including sensor-based
Internet of Things applications, which enable the collection of vastly more
data.
“Man-machine teams and adversaries are the future of
business competition.”
He mentions Stuart
Firestein, author of Ignorance: How it Drives Science, who advises
cultivating ignorance, or ‘not knowing,’ because it can lead us to insights,
innovation, and advantages.
He mentions Columbia Business
School’s Ruta McGrath, whose book, The End of Competitive Advantage, notes
that stability can be dangerous in a dynamic competitive environment. She
cautions that every advantage is temporary.
Part Three is entitled Breaking
Static: Unleash & Embrace. First, he talks about emergence.
“Organizations are complex systems. Companies are
emergent. They represent a collection of human beings, processes, and practices
– they are alive.”
He also notes that each is
distinct, unique, and always changing.
“When a group of people (an organization) collaborates,
interacts, communicates, and pursues the same purpose, emergence occurs; a
collective change happens, a fresh understanding that leads to new decisions,
patterns, or changes in direction.”
“Your organization is emerging whether you desire it,
acknowledge, or ignore it.”
Next, he talks about
connectivity, consistency, and continuity. Optimized connectivity is an
essential prerequisite. This involves getting the correct and full signals
about performance, the industry ecosystem, the company’s capabilities, and
market dynamics.
“Connectivity is critical to discovery – when the
signals are broken, effectiveness is compromised.”
Consistency, he says, is
vital for data capture and analysis. He says companies should be consistent in
measurement and evaluation.
Continuity involves paying
attention to time, he seems to suggest. The timing of business decisions can
make or break a company. Better to coordinate with market signals as much as
possible.
He says that “life is
about exchange” and therefore we should be cognizant of the value of things
being exchanged, including the perceived value.
“A winning strategy aims to balance the value delivered
to all stakeholders at all times.”
He says growth, risk, and
efficiency must be grouped, monitored, and balanced.
Chapter 6: Gaining the Edge, focuses on how to
gain that edge, utilizing the evolving caterpillar metaphor as he does
throughout the book. First, he notes that “uncertainty is your ally,” so
we must become comfortable with it. He tells cautionary tales about the growth
of digital industries like Netflix and Amazon, disrupting and replacing
brick-and-mortar ones. These new developments reorganized the strategies of
many other companies seeking to avoid undesirable outcomes. He says that it is
better to get comfortable with probability than certainty. He also gives
examples of where embracing certainty was disastrous and where it paid off to
embrace uncertainty. He warns that “hope is not a winning strategy.”
Disruption risks show that being able to put out fires is a vital skill. The
ability to get a whole team to utilize uncertainty as an ally can be very
valuable, he suggests. He says that creating cultures of innovation has been
beneficial for many of the tech companies. He emphasizes the importance of the
free flow of intelligence within an organization, “unconstrained by
functions and turfs.”
Mohasseb advises to “capture
and interrogate reality.” He gives Amazon’s development of cloud computing
as an example where this has happened. The first step is to appreciate reality,
to understand the performance and capabilities of the company, and the
fluctuations in markets. He says to “make it achievable” and that
describes execution. He also says, “plan to improvise.” Prioritization
and timing are important for improvisation.
Having reviewed thousands of
business plans and working with hundreds of entrepreneurs, he cautions:
“Experts may advise, “Have a firm conviction about your
strategy and pursue it relentlessly.” I disagree. Convictions can be deadly –
the wrong convictions will waste your organization’s energy and resources.”
Mohasseb recommends cultivating “purposeful
curiosity” as a means to attract insight. He says that the most common
causes of strategic failure are solving the wrong problem or pursuing the wrong
opportunity. However, finding the right problems to solve and the right
opportunities requires a process of discovery. That process in turn requires
effective observation of realities and uncertainties via the scrutiny of data
and signals. He says that advantage is found through data analysis. Just having
data or technology is not enough. It needs to be analyzed or developed for use.
Finding signals in data is what many scientists and strategists do. These days,
AI does it very well, oftentimes better or much better than humans do. AI does
not forget and can crunch vast numbers quickly, but its ability to strategize is
just beginning with agentic AI. This will improve in the future. Identification
of challenges and opportunities is one result of data analysis.
“Let data analytics constantly deliver the signals,
news, and insights – pointing out both direction and progress.”
More data is usually good,
but too much can lead to confusion, he says. I think AI can mitigate that a bit
these days.
He also points out that we as
individuals and groups use analytics all the time. It’s what we refer to as
common sense in many cases. Strategies must pass the test of common sense. He
also recommends keeping strategies simple.
The final section is Part
Four: Doe or Die … Evolve and Thrive. He first states that
measuring the effectiveness of a strategy during its implementation is
important.
“Positive evolutions are purposeful, intelligent, and
planned.”
He says that “friction is the unavoidable side effect of
change.” Since change is natural and inevitable, so is friction. Obstacles
need to be overcome.
He recommends cultivating a
curious and innovative mindset as a positive habit.
In the final chapter, he
speculates a bit about the effects of AI and our growing dependence on
machines. Nine years later, we still don’t know what the full impact will be,
and predictions are all over the place. He asks whether AI is any different
than previous technologies like knives or fire. He notes that we should
continue to build and partner with machines and segment our intelligence. That
seems to be happening these days.
“Politics and religion may divide us, but data and
machines could connect us and make us one world. A world where the boundaries
of companies, services, and products are hard to distinguish. A world where
constant innovation comes from all corners of the earth. Where only the
informed can truly evolve and abundance of data end ensuing insights will make
the planet more knowledgeable and innovative.”
Great book!
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