Better, Simpler Strategy: A Value-Based Guide to Exceptional Performance

These organizations are aware of a built-in bias to mistake complements for substitutes. They always ask, What is the best case you can make to argue that a new technology or a new product might be a complement?

Managerial involvement—Some executives prefer a hands-on management style; they frequently visit plants and work one-on-one with employees and suppliers on operational tasks. Others focus on collaboration in the C-suite. There is no general performance advantage in adopting either style, but hands-on managers run the risk of seeing process-oriented

My recommendation is to use three criteria (figure 12-3) to choose the right partners. The first is value potential: close collaborations are particularly valuable if they have the potential to move WTS, cost, and willingness-to-pay (WTP).

High expectations—

Second, specificity: Do you ask your supplier to invest in dedicated capacity? Would you like them to develop a novel process that benefits primarily your firm?

A further complication is that ride-sharing companies typically treat drivers as independent contractors, not employees. This saves cost, but it also allows drivers to work for multiple ride-sharing organizations. In effect, a new entrant will not have to assemble a new pool of drivers. The entrepreneur can simply “borrow” the drivers already in th

The third type of network effect is characteristic of platform businesses (see figure 8-2c).

Making change real—

An obsession with business models—how you capture value—is particularly risky, because value capture is a zero-sum game: from the very beginning, you accept that your success makes customers worse off.