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

Platforms serve multiple groups of customers, and while many create value for all groups, some choices betray the organization’s primary orientation. A travel site that sorts hotels by profit margin primarily serves the lodging industry. A site that sorts by customer reviews has the opposite orientation. The distinction between buyer-focused and se

The basic intuition underlying value-based strategy could not be simpler: companies that achieve enduring financial success create substantial value for their customers, their employees, or their suppliers.

Align external and internal incentives. With broad goals in place, you can define metrics that align with these goals and link them to financial incentives.

Paradoxically, the strategic effects of learning are most valuable if learning reduces cost at an intermediate pace—not too fast and not too slowly.

A typical contest attracts about 35 designers who produce 115 designs.20 Companies then provide feedback so that the designers can improve their work. Projects run for seven days. The company pays the winning designer a prize, generally about $300. In exchange, the brand owns the copyright. My colleague Professor Daniel Gross studied more than 4,00

“Before the FICs, you never felt like your ideas were being heard. You could say something to someone, but it just didn’t go anywhere. Now, it feels like management cares about our ideas and how we feel.”11

Resource constraints are the main reason firms assume reverse positions. To be great in one specific dimension—search, for example—Slack had to neglect many others. This principle holds true not only for startups, where resource constraints are particularly severe. Excellence invariably requires resources in short supply: time, capital, managerial

On average, a US company at the 90th percentile of productivity creates twice as much output as a company at the 10th percentile—with identical inputs!1 The dispersion is even more pronounced in China and in India, where we often see 90–10 ratios of 5:1.2 Nor are these fleeting differences. Gaps in productivity tend to persist over long periods.3

As Intel’s experience shows, operational effectiveness and strategy are intertwined. My advice is to pay little attention to the distinction. Do not dismiss an initiative simply because it seems to be an investment in operational effectiveness. It might well turn out to be the catalyst for a strategic renewal.