Underdogs cater to neglected parties. Most platforms favor specific groups—customers or vendors. Serving the unloved group allows for meaningful differentiation.

The most sophisticated businesses use three approaches to get closer to the truth: pattern recognition, trend analysis, and experiments.

Every strategist needs to know the minimum efficient scale of their firm. It is irresponsible to choose a strategic direction without knowing

Underdogs focus on a small group of customers who place a high value on connections with one another. The

“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

Share creatively—Consider various ways to share value with your workforce. Reducing compensation is only one of many ways to capture value from improved working conditions. For example, companies that provide tuition assistance reap the benefits of that policy by attracting more-skilled employees.

Be predictable—Focus on initiatives that lower WTS in a predictable manner. Flexible hours and opportunities to work from home,

One of the lines that had received only the multiplier incentive proved an exception. This line became increasingly dysfunctional. Workers criticized each other for a lack of skill, their supervisor for poor communication, and management for an insufficient flow of quality material. A full 70 percent of these workers quit. (Another line with the sa

Making value creation the center of a buyer-supplier relationship is hard work, and you want to be careful in the selection of the suppliers with whom you build this type of relationship. In selecting the most promising partners, you need to consider their value potential (how much you can move WTS), the specificity of the investments (how unusual