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A Preview of Strategy Rules with David Yoffie

Strategy Rules

A summary of things you should know about Strategy Rules according to David Yoffie:


In this episode David Yoffie takes a deep dive into his book, Strategy Rules, where he unveils 5 five timeless lessons from Bill Gates, Andy Grove, and Steve Jobs.

In their book Yoffie and his co-author, Michael Cusumano, share the successes, failures, commonalities, and differences of world famous leaders like Bill Gates, Andy Grove, and Steve Jobs. The goal of the book is to teach you 5 new strategic rules for doing business, the best practices that come with high-tech entrepreneurship, and how to take your leadership to the next level.

This book is perfect for entrepreneurs who own or plan on owning a high-tech company and want to learn strategy techniques from the best leaders in the business.

The Book’s Unique Quality (2:58)

The thing that makes this book different from others is most people write biographies on these particular individuals or they write histories of the companies. There is no book, that I am aware of, that dives deep into looking at three CEO’s, comparing and contrasting them, and trying to understand what they were able to do in similar ways that produced such extraordinary performance. We think that by looking across companies and across great leaders you get a deeper insight. It’s not about the individual personality traits; it’s about the ways they think and the ways they deliver performance.

The Best Way To Engage (3:44)

Like many books we have an introduction and concluding chapter which gives you the high level overview of everything you might want to know. Then we go into and talk about each of the five rules in great depth. For each rule we have a single chapter so you can jump in where needed if you want.

The Reader’s Takeaway (13:30)

The idea of what we call Look Forward Reason Back is the critical idea that ultimately determines what makes a great strategist. It’s that ability to look ahead, to have a vision, and then figure out what you need to do today to get to that particular end game. It’s also about anticipating what customers are going to need tomorrow, not what customers are needing today and then figuring out what they capabilities are that you have in your organization today that will deliver those customer needs of tomorrow.

A Deep Dive Into The Book (4:27)

The way we begin the book is by trying to first understand how these individuals were different and how they were similar. At a very basic level they could not be more different as individuals. Bill Gates was the classic nerd but grew up in a wealthy family, Andy Groves was a holocaust survivor and made his way to get a PhD in the United States, and we all know about Steve Jobs. But beyond that these individuals had some incredibly important similarities which we think are important for any entrepreneur who wants to be successful. Number one they were incredibly ambitious not just to make money but to build great companies and to change the world. Number two they worked incredibly hard and they also provoked incredible debates inside the company. Finally, they were all slightly paranoid and never took success for granted even when they were doing extraordinarily well.

All three of these individuals were able to build the most valuable companies in the world and the question is how did they do it and this is where the five rules come in. The five rules are what we call Look Forward, Reason Back, Make Big Bets Without Beating the Company, Build Platforms and Ecosystem not Just Products, Exploit Leverage and Power, and Shape the Organization Around Your Personal Anchor.

The first three deals with strategy and the last two deal with tactics and execution. If you want to be a great strategist you have got to be able to do things at a high-level as well as at a much more micro level and ultimately be able to execute. The idea of Look Forward Reason Back is that you got to be able to think several steps ahead into the future and then think about what you have to do today in order to reach that position.

We then break that down into a number of different activities that a great CEO is going to do if they follow these rules. The first one is that you have to start with some vision of where you want to go. This vision becomes critical in driving the success of all of these organizations which we define in great detail.

The second idea is that you got to be able to think big and make big bold bets that could potentially change the game but you have to do it without beating the company.

The third big idea is that you have to build platforms and ecosystems not just products. This is the notion that ultimately its great platforms that win, not great products that always win. The fourth idea is about the tactics and this is the notion that when you’re an entrepreneur you’ve got to be clever, you’ve got to stay under the radar, and you’ve got to employ tactics.

The last critical idea is the idea of how you execute when you have an organization that’s trying to do all these things. Ultimately this is about the CEO figuring out what they really do that is special, what it is that they have in their own capability set that enables them to do things that give them a comparative advantage to help their organization understand what will be successful. The notion here is that if you are going to be a successful CEO or entrepreneur first you have to know yourself and exactly what you can do well and don’t do well. All of these rules were quite similar across all three CEO’s and helped them start as entrepreneurs and ultimately build three of the most valuable companies in the history of the world.

NOTE: That was just a summary. To get the full deep dive, play the audio clip at 04:27

Notable Quotes From The Book (14:51)

“Success breeds complacency. Complacency breeds failure. Only the paranoid survive.” – Andy Grove

“Here’s how it’s going to work. I’m going to teach you electronics, you’re going to teach me retail. Let’s go walk the mall.” – Ron Johnson

The Credibility/Inspiration Of The Author (0:36)

I have been a professor at Harvard for 34 years and my co-author, Michael Cusumano, has been a professor at MIT for about 30 years. I have been involved in trying to understand the world of strategy and specifically the world of strategy and technology since the mid 1980’s. I had the fortunate experience of joining the Intel board of directors in 1989 which gave me an opportunity to meet Andy Grove and then Andy introduced me to Billy Gates and Steve Jobs. Today I continue to work broadly in this field and it has been the core of my research for most of my career.

I wanted to try to understand how an entrepreneur could develop into a leader of a great company and also think about what would lead to great performance. Ultimately when you think about companies that have done extraordinary well, the leaders who have done it better than anybody else have been Bill Gates, Andy Grove, and Steve Jobs. And all three of them we know their history from beginning to end and know they have done a really great job. This was an opportunity to dive deep into three extraordinary individuals.

Other Books Recommended By The Author (16:58)

Judo Strategy by David Yoffie
Competitive Strategy by Michael Porter

More Information About This Book and The Author

Buy Strategy Rules by David Yoffie and Michael Cusumano on Amazon today
Visit HBS.edu to learn more about David, his book, and his profession
Follow David Yoffie on LinkedIn

More Information About This Episode

Download the full transcript here (coming soon)
Listen on iTunes, Stitcher , and SoundCloud

Related books:

Exponential Organizations by Salim Ismail
Scaling Up by Verne Harnish
Winning the Long Game by Steve Krupp

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Wade is a 4-time serial entrepreneur and is the Founder/Host of The Entrepreneurs Library. With a long time passion for reading books, Wade created an online resource and podcast for entrepreneurs who love to read personal and business development books. His long-term goal in life is to start an entrepreneurial home schooling program for children of business-minded families.