Posts Tagged ‘Phil Rosenzweig’

Rethinking Hedgehog

Thursday, June 28th, 2012 by Troy Schrock

I recently wrote about Phil Rosenzweig’s book The Halo Effect.  One of the notions he challenges is Jim Collins’s Hedgehog Concept – the discipline of focusing on one thing at which you are a uniquely high performer.  The “Good to Great” companies were Hedgehogs, but Rosenzweig cautions that Hedgehogs end up as roadkill at least as often as they succeed.

The opposite of the Hedgehog is the Fox, jumping about from thing to thing.  Andy Grove, the acclaimed CEO of Intel, is noted for Fox-like thinking.  The technology in his industry was changing way too fast for him to focus on one thing.  He repeatedly led his organization through radical changes, including some where they abandoned the very products that had brought them much success.  Had they not been successful, they would have likely been criticized for not having a Hedgehog Concept.  However, Grove realized that there are appropriate times to be a Fox.

To be clear, I am not suggesting we abandon the Hedgehog Concept, and I don’t think Rosenzweig is, either.  We must find the proper balance between Fox and Hedgehog-type behavior.  Once a strategic direction is established, it’s time to focus on making that work, but prior to that, it’s okay to behave like a Fox.  In fact, that Fox-like behavior may be what keeps you alive if your Hedgehog Concept fails.


The Halo Effect

Thursday, May 31st, 2012 by Troy Schrock

One of the more challenging books I’ve read in recent years is Phil Rosenzweig’s The Halo Effect.  I call it challenging not because it was difficult to read, but because it strongly confronted some assumptions about good business that I have rallied around for a long time.  Starting with the “mother of all business questions” (What leads to high performance?), Rosenzweig strongly criticizes the methods of several well-known business researchers, including Jim Collins (Good to Great, Built to Last).  “This book is…written to help managers think for themselves,”  he writes, “rather than listen to the parade of management experts and consultants and celebrity CEOs, each claiming to have the next new thing.”

Buttressed by his own research, Rosenzweig claims financial results drive our impression of every aspect of a company.  Thus, when a company is performing well, employees love working for the company and speak glowingly of superiors, executives are thought to have brilliant strategy, customer focus is considered top-notch, and so on.  When financial results drop, those same employees change their tune, and those same executives are criticized for their strategic mistakes.

Rosenzweig does not say that Collins and others are wrong; in fact, he concedes that they point us in the right direction.  Yet, he cautions against treating their advice as automatic cause-and-effect formulas.

As much as The Halo Effect challenged me to rethink some things, it also reinforced the importance of disciplined strategy execution.  Writing about Logitech CEO Guerrino de Luca:

De Luca emphasized the importance of execution.  Once strategic choices were made, the focus shifted to getting things done.  “We learned many times,” he said, “modestly defined strategies have given dramatic success through great execution.” …Did Logitech’s CEO think he was following a blueprint for enduring success?  No.  But he made thoughtful decisions about strategic choices – deciding what not to do as much as what to do – followed up with disciplined execution based on clear priorities and explicit measures.  (p. 171-2)

Clear priorities.  Explicit measures.  They may not guarantee success, but they will greatly increase its likelihood.


In 100 Words: Focus on Process

Tuesday, May 1st, 2012 by Troy Schrock

Success derives from two components: strategy and execution.  Notice what’s missing from the list: results.

Results tell if you’ve been successful, but they don’t show how to be successful.  In fact, poor results may occur despite the best possible decision based on what was known at the time.  Similarly, great results might occur in spite of poor decision making.

The real key to understanding success is found not in the decisions, but in the decision making process.  Regardless of outcome, get in the habit of examining your process of strategic thinking and strategy execution.  Refining that will lead to success.

“Whenever someone says, ‘We have the right strategy, we just need to execute better,’ I make sure to take an extra-close look at the strategy.”  (Phil Rosenzweig)

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Vision Is Not Strategy

Tuesday, June 15th, 2010 by Troy Schrock

Business leaders sometimes mistake vision for strategy.  They hold an annual meeting with their executive team and boldly proclaim the company’s direction.  They think big and excitedly list the new initiatives they intend to pursue in the coming year.  Everything feels fresh, and the possibilities seem endless.  Everyone leaves the meeting fired up and ready to get to work.

Then the work comes.  The “sugar buzz” from the strategy meeting quickly fades as daily operational tasks obliterate its momentum.  Days turn into weeks.  Weeks turn into months. 

Suddenly, it’s time for the annual meeting again.  “Let’s take a look at that great strategy we developed last year,” says the CEO.  Someone scurries back to his desk and returns with a gleaming 3-ring binder.  He sets it in the middle of the table, turns to the appropriate page, and there it is…the “strategy.” 

“Wow, that was a great idea!” says one executive.  “I totally forgot about that one,” says another.  “We really had our A-game that day, didn’t we?” sighs a third. 

Did they?

What good is a strategy that doesn’t get done?  Anyone can envision a grand scheme.  The world of intentions is full of geniuses, but it’s what you do in the real world that counts.  Don’t congratulate yourself on big ideas; rather, celebrate the big results. 

It’s like the frustrated football player at the end of a tough loss.  “Our scheme was perfect,” he says.  “If we had just completed that one pass, made that one tackle, and not missed that one block, we would have won.”  Yeah, you might have, but you didn’t.  The other team is holding the trophy.  You failed to execute, and that calls your strategy into question.  No amount of wouldas, couldas, or shouldas will change that.

Sometimes, execution of a strategy requires changing the strategy itself.  Strategic thinking can’t just happen in the boardroom; it has to be a way of life – a continuously iterative process.   It’s purposeful action, frequently recalibrating in the face of reality.  Your football team may think they have a good strategy going into the game, but when the opponent scores two quick touchdowns and your quarterback goes down with an injury, cling to that strategy at your peril.  Reality has hit, and it’s time to adjust.  What were your wrong assumptions?  What new opportunities do you see?  How will you fix your errant game plan?  Visioning is over.  This is where the real strategizing begins.  The final score is the referendum on how you did.

Again, vision is not strategy.  Results can fall short of the vision, but you can’t separate strategy from results.  As Phil Rosenzweig writes in The Halo Effect, “Whenever someone says, ‘We have the right strategy, we just need to execute better,’ I make sure to take an extra-close look at the strategy.” 

Strategy is the doing.  In fact, strategy is so interwoven with action that it’s a shame that “strategy execution” has to be two words.  Perhaps “strexecution” is more like it.  Or maybe “stratexecution.”  Either way, that’s more like it.