Strategy That Works: Combining aspiration and execution to create lasting advantage

Strategy That Works: Combining aspiration and execution to create lasting advantage

Building a successful company can be overwhelming. You’re constantly faced with potential opportunities,
decisions and dilemmas. How can you stand out from the competition? Success comes from making a promise about
the value you’re going to create – and focusing everything you have on delivering
that promise. It’s about what you do, not what you sell. You may think, “This is too difficult for
your organization,” but the most successful companies we know have done it exactly this
way. For example: Back in 1984, the Chinese appliance company
Haier was in bad shape. They were struggling to pay wages, and even using their factory
doors for firewood. One day, a customer’s complaint about a
faulty refrigerator landed on the new CEO’s desk. When he looked for a replacement, he
realized that many of the refrigerators in their warehouse were faulty too. He decided that things had to change. He ordered
the workers to smash the faulty fridges to bits. It shocked everyone, but it was a turning
point. It hammered home the company’s new direction. When complaints came in again – this time
it was broken washing machines – Haier sprung into action. They discovered that some farmers
were actually using them to clean sweet potatoes. Haier saw an opportunity to build custom appliances.
They now produce a line of washing machines for cleaning vegetables in China. Refrigerators that stay cold during power
failures in Nigeria… and even small units to fit under desks in
U.S. dormitories. Haier made a commitment to solve their customers’
problems and even though it went against the conventions of mass production, they built
the capabilities they needed to deliver on that aspiration. Another company that works this way is CEMEX.
They started as a cement and concrete company in Mexico. Now, you might think it’s impossible to
differentiate yourself in a commodity industry like building materials. But CEMEX saw things
differently. They noticed that many of their customers
struggled to get projects off the ground. From small families, building homes floor
by floor, right up to large-scale municipal infrastructure projects. CEMEX believed that they could create a different
kind of relationship with their customers. The secret was to provide – not just cement
– but the knowledge of how to use it. They developed the capabilities to provide
support and advice on everything from procuring permits, through to choosing the best place
to build. This strategy enabled CEMEX to define a strong
and distinctive position in a very challenging market. Can any company accomplish this? Yes – even
companies which have teetered on the edge of bankruptcy. Not so long ago, Adidas was struggling with
solvency, trying to keep up with current fashion trends and competing on price. There was an
urgent need to turn the company around, and the solution to their future success came
from looking into their past. When a new management team came in, one of
the first things they did was to explore the company’s archives. They made an incredible
discovery… Four decades earlier, the company’s founder,
Adi Dassler – had painstakingly created specialist footwear, working closely with world-class
athletes, to study and understand human dynamics. His revolutionary ultra-lightweight soccer
shoe was even rumored to have helped the 1954 German team win the world cup. The new management team realized that within
the museum was not only the companies’ history, but real advantage. They decided to reinvigorate
and rebuild Adidas with this original spirit and dedication to excellence. They decided to shake up the organization,
in order to produce new product lines according to Dassler’s vision of industrialized craftsmanship,
timeless authenticity, and functionality over style. These soon found huge commercial success,
and helped Adidas build a differentiated and winning market position. We spent over a decade studying some of the
world’s most successful companies, and published the results in a book, with Harvard, entitled
Strategy that Works. The book reveals “the five acts of unconventional
leadership”, and provides a practical roadmap to success, allowing you to deliver on your

Comments (2)

  1. Great video. The best yet.

  2. Very nice!! Great job!!

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