Good Strategy Bad Strategy Richard Rumelt Lennys Podcast

TITLE: Good Strategy, Bad Strategy | Richard Rumelt CHANNEL: Lenny’s Podcast DATE: 2024-01-21 ---TRANSCRIPT--- don’t call it a strategy call it an action agenda huge numbers of people out there willing to sell you advice Mission and your vision and your values all these things that have to be in place before you can have a strategy that’s not true we begin to try to identify there the one or two key challenges that can actually be address and what are we going to do about it what are the coherent actions we’re going do to to take these on okay we’re going to we’re going to go after this and here’s the action steps we’re going to take to do that that’s essence of what you’re doing when you’re thinking strategically today my guest is Richard rammelt Richard is an absolute legend in the world of strategy it was such an honor to have him come on the podcast he’s the author of good strategy bad strategy which I’ve gifted to countless people who wanted to become more strategic he’s been mentioned so many times on this podcast he’s also the author author of The Crux his most recent book which some consider his best book which delves even further into his advice on how to craft a winning strategy Richard was a longtime professor at UCLA Anderson School of Management was on the faculty of Harvard Business School and he’s consulted on strategy with companies like Microsoft Apple and Intel and also with government organizations like US Army special ops command and folks like Donald Rumsfeld in our conversation Richard shares the concrete elements that make a good strategy why we’d be better off calling them action agendas rather than strategies why every great strategy starts with a clear diagnosis of the biggest challenge that you face also how to actually lay out a strategy why organizational Dynamics are often the biggest hindrance to winning strategies and so much more I could keep going but let me just say we cover a lot of ground in this episode and Richard shares incredibly thoughtful and deep answers to each question I am excited to bring you Richard remelt after a short word from our sponsors let me tell you about command bar if you’re like me and most users I’ve built product for you probably find those little in product popups really annoying want to take a tour check out this new feature and these pop-ups are becoming less and less effective since most users don’t read what they say they just want to close them as soon as possible but every product Builder knows that users need help to learn the ins and outs of your product we use so many products every day and we can’t possibly know the ins and outs of everyone command bar is an AI power toolkit for product growth marketing and customer teams to help users get the most out of your product without annoying them they use AI to get closer to user intent so they have search and chat products that let users describe what they’re trying to do in their own words and then see personalized results 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that you teach so thank you again for being here thank you I thought we’d start at the beginning and then work our way up and kind of see where the conversation goes what is the simplest way to understand a strategy what is a strategy and then what are the essential components of a good strategy well a strategy is a designed for overcoming a high stage challenge it’s a mixture of policy and action designed to deal with a challenge the challenge could have an upside could be oh gez we were fooling around and Back 40 and we discovered what what we do or it could be negative could be that the new innovation is driving us out of the market but challenge is is the hardest strategy the word comes from Stratos which is Greek for the Greeks elected 10 stroy to serve as strategic leaders at Athens and they they were elected and they dealt with the issues of the day the Persians are invading there’s plague in town we need money for a new Temple and that’s where the word comes to us from it isn’t just military it wasn’t it out it so strategy is always about dealing with an issue a challenge a problem what are we going to do about global warming what are we going to do about China or once you reify with Taiwan you obviously have these very uh Infamous famous elements of a good strategy something you call the colonel can you just talk through those pieces right sure so you when I used to teach strategy many years at Harvard and then at uh UCLA and other places uh there’s lots of ways to looking at strategy and so years and years ago we looked at the loran curve and the Matrix and the five forces and all those kinds of analytical tools and it begin end to doing with me this isn’t strategy these are analytical tools for for adoles problem for thinking about things for looking at competition but they’re about strategy strategy is one and I started to write a book and the first chapter of the book was uh the first part I wrote was David and Goliath strategy story so and and my point in in writing about D was that the surprise that David is able to beat this Giant Warrior and that’s a strategy story strategy story is about discovered strength it’s about oh look at look at how they did that look at how he got made in five moves look at how that’s a strategy Story look at how Steve Jobs changed the world when people didn’t expect it that’s the emotion strategy story is so so I want to write about strategy and my wife Kate asked me well do you defy strategy I said it’s really hard I can’t Define it and she said well you can’t write a book about it if you can’t Define it because I I have this other conceptual scheme in my head that the whole teachers and writers had which is that there’s a bunch of analytical tools and you know this is back in uh 2005 2004 and I I gradul came to the realization all strategy is fr it’s a form of dealing with challenges and that was the basic idea going ahead and of well so if that’s the core of it what’s the basic activity what are you’re doing when you create a strategy well you’re you’re diagnosing the situation you’re trying to figure out what’s going on here what’s the nature of reality that you’re deal with now humans can’t understand all reality no one can so part of what a diagnosis is is is is a decision of what you’re going to pay attention to and and and the hypothesis or several hypothesis Hypes about what work what’s going on how do things connect together and that’s beginning of the diagnosis and so diagnosis is an understanding of the situation that you’re in well that’s not enough and you could use any of those tools are famous for that and you can try F forces you can do any one of a number things to try to comprehend the situation the world is more complicated than 2 by tws unfortunately I was educated as an electrical engineer in my early years were spent designing spacecraft for an asset and when I got into looking at business and business strategy stuff I was always amazed at how unintellectual it was you know that here I was struggling to master Z transforms and M and yet these people are looking at 2 by two some little diagrams say well that’s that’s what the company’s about so a rich diagnosis of the situation but then a guiding policy okay so the guiding policy is is is what are we going to do now it’s a simple thing to say a guiding policy and and The Guiding policy is is is sort of in strategy it’s the core of it it’s it’s here’s how we’re dealing with the situation and yet when I say that it flies in the face of I was writing that I had a client who had 17 priorities this is what we’re doing we have 17 priorities and that’s the opposite of a policy that’s a lottery list of all the things we wish would happen over the next year we’re gon to gain market share in China we’re going to cire missions we’re going to save energy we’re going to become safer we’re going to cut cost we all these different things that we’re going to do and the role priorities you know lots of people you misuse were priority when they’re trying to do all that you wouldn’t want to be in a commercial airplane and here the tower say to the pilot I’m giving priority to the following three planes on Runway five you know right when you know there’s something wrong well that’s the word priority means the first it doesn’t mean the grab bag of everything that you can think of that might matter it means what’s first and so the guiding policy is is sort of at that level what what do we really have to do to how do we what are we doing and what are we not doing to deal with the diagnosis that we created and then the most important part of a strategy the part that it’s so easy to leave out because people like to think of strategy as this high level conceptual thing is the coherent action you you you have to do something and what you do has to be coherent in several ways first way is it has to deal with the problem or the diagnosis and and the guy see that’s the impl that it has to be coherent in that you shouldn’t do things that fight each other you shouldn’t say oh we are going to burn less oil and at the same time we’re going to import for more a I don’t doesn’t make any sense to do things that are self-contradictory and yet people do you know most companies have strategic goals of increasing growth and increasing uh profit magically that can happen in some cases God growth and profit or they battle each other let’s say we Define profit is return on Equity well if if if you’re going to increase growth and increase return on Equity I didn’t do that because you’re you’re basically TR to invest less to get to return on Equity or you’re going to grow and get your profit Mar how you going to do that you get your profit margin up and grow faster these are this is baby talk but CEO after CEO will stand up and say well we’re R to R and so having a coherent AC actions there that dun know on one another is an important part of strategies all three Els have to be there you has to be an understanding of the situation there has to be a guiding policy how are we going to deal with it and that can be a long-term sense of how we could heat I you don’t have to change your strategy every five it’s for every five years if you’re if you’re making Almond Joy candy bars or something you totally change your strategy house if you’re in the tech business of course you’re you have a shorter time Horizon and then the coherence in action is critical and so these are these are the three What I Call basic elements the chal that if anyone in three is missing something it’s not really a strategy it’s something else awesome okay is there an example that you could give that kind of makes these even more concrete of just I don’t know something that comes to mind that’s kind of a quick example of a strategy that uh illustrates these three components you know if you’re Microsoft right now and you’re trying to adapt to to AI yeah you have a diagnosis well let’s go you see you see the challenge of how adapt to it you create a guiding policy that you’re got invest in one of the major leaders and then you’re going toh begin to incorporate that into your search engine and then you have coherent actions you know you actually do some of these things and you you know it’s not it’s not rocket science the difficulty is that companies don’t do that there are companies that say well or future is let’s say something that’s not in a software business that’s industry 4.0 or 5.0 that we’re going to have a we’re investing in the future of Robotics at and Ai and and and computer vision and all that that’s that’s going to be our future and then you see what they’re doing they’re they bought this company they bought this company they put this company and that’s it it’s strategic ass without any synthesis so I mean strategy is not mysterious what’s mysterious to me what was mysterious to me and what remains mysterious to me is how so many organizational leaders don’t do it they they create bad strategy uh they they they do something that they say a strategy and then it’s not you have a whole chapter on this on what is a bad strategy can we just touch on a few of the things you see as signs that your strategy is is bad or maybe it doesn’t even exist sure what H good strategy bad strategy uh a lot of a lot of people resonated with the bad strategy part of the book they wrote emails and say oh my God thank goodness someone just finally said that these Walling in teral meetings I sit through or out action strategy or these documents that the company produces are not actually strategy and they’re not bad strategy the standard bad strategy for a corporation is a set of profit goals or performance goals a set of goals now goals are the engineering of how companies work to some extent but abstract highlevel goals uh they’re now a strategy there there’s something El there’re Ambitions and Ambitions are non strategy a list of all the different things you wish would happen is not strategy I was asked to help part of the US Department of Defense create a strategy for all the 17 different intelligence agencies wow how cool yeah they have 17 different intelligence agencies and the strategy basically that that these people had written yes said the 17 agencies should work work together more effectively now you don’t have to be a Russian spy to see that what they’re really saying is these guys aren’t working together effectively it’s a problem but they didn’t say that they said the strategy is they’re going to work together more effectively just like the arv always comes out with our strategy to join us meaning we’re having a trouble coordinate but then there’s nothing there about that other than this is what should happen there should be more effective coordination and oh I have an office of coordination to a person in charge of coordination but there’s no sense of well why is it hard to coordinate what are the barriers to this this has been going on for 34 years now what holding it back what is the problem we have to solve it’s not there and so I was I was hired to do a Foundry for company and they said well our our diagnosis inste not grown Fest okay oh and let’s let’s get into that because that’s not the that’s a statement uh it’s a statement of values you would like to grow faster than you are I’d like to be taller than I I’d like to have more hair or you want to grow faster okay so what’s holding you back and try but you know saying okay we’re going grow that’s not a strategy bad strategy also is fluff people will use fancy words to describe their situation now since I wrote that you know the term word salad has become common and to there’s a lot of word salad writing that people try to use to describe their situation may It’s s of more abstract perhaps more abstract therefore it’s more strategic incoherent stuff where we’re going to do a and we’re going to do B and those two things obviously fight one another all those things are part of bad strategy bad strategy is a documented or a set of intentions or a set of verbalizations where it’s non strategy there’s no diagnosis often president o started out saying where United States is falling by behind in education and he he’s looking at the P the Pisa test scores of 15 year olds around the world and it’s true the United States is down number of 30 um countries in terms of the scorus of our 15y old in math and in general knowledge so can correct statement we’re falling behind a real diagnosis would say because then call he jumped immediately to oh therefore we’re going to have more people go to college than any other C two well having more people go to college doesn’t solve the problem of 15y olds not being able to do elementary math hopefully it doesn’t screw up colleges everywhere so that kind of Gap is there oh where you don’t do the diagnosis why do we have this the argue over diagnosis is part of politics and part of organizational politics absolutely do and that’s important to do a strategy you have to resolve the argument it’s important so you know why do we have a homeless explosion in port or Seattle or Los Angeles and people argue about that some people say oh struck own housing they’re different diagnosis uh but to you to deal with the issue you have to decide on the D the politicians right now sort of decided for a few years that the problem is housing is too expensive we’re going to build housing at $700,000 a unit and give it to the hom people uh okay if you build it they will go if they have then you know the next problem is well can’t seem to build a housing and so again you need a new diagnosis why can’t you build a housing you’re a rich powerful country why why can’t you build some housing so diagnosis is is critical to understanding it and and in public policy we argue over the diagnosis and in organizations we argue and unless you resolve you can it so lacking diagnosis is one of the key reasons for bad strategy the other the fluff and the incoherent actions are are fun to describe but they’re less common the second major source of B strategy is mistaken goals for strategy same these these goals are our strategy and that leaves out so many of the important aspects amazing so just to summarize somewhat if you’re missing a diagnosis trying to explain what exactly is wrong it’s a sign your strategy is incomplete or bad if you’re missing concrete actions it’s a sign that your strategy is incomplete or bad there’s also I think an element of coherence the actions have to connect and there have to be a few very few of them I always like to think of three is like a good number is that is that something you think about like the rule of thirds for actions you want to take or even The Guiding policy or is there like a number that you think about just like no more than this a few a few not too many not so it’s hard number numers you know we work best when we concentrate we’re more effective when we concentrate on a few things a few people a few uh Focus who is is the fundamental source of power and Str yeah trying to do too many different things is is defocusing I think there’s a this quote in your book that I think is and this may be paraphrasing each time you say yes you risk turning a nent good strategy into a bad strategy yes focus is when I was 9 years old I was at summer camp and I had my Paris sent me a magnifying glass and I was out there using the son to try to cook a piece of wood and I think I had a piece of cloth that I was trying to burn wasn’t having much Lu and the magnifying blast focuses the Sun raay Sun’s raay on the spot counselor came over and he he said try this and he pulled out a black thread from his T-shirt put it down and I focused the Sun raise heart popped out so stupid little story but to burn that black thread there has to be a source of power so there has to be a focus that’s the magnifying Focus the power and it has to be aor that can be affected it has to be a black thread not a white threat and that sequence is part of strategic strategic action you need a source of power I say power I don’t say Advantage efficiency as they say power because there are different ways in which power is exhibited it and and you have to focus the power on a Target that can actually be affected or achieved and this is this is real simple logic but it’s a discipline to focus power or a Target that you can affect to take American power and say we’re we’re going to change China’s trajectory and Russian trajectory and our own and you know and the name all the 30 countries around the world that we’re trying to we’re diffusing our efforts because they’re they’re not the same they’re going in different directions obvious when you say it not so obvious as you live it because like any organization like any big organization US government has different interest they’re pursuing different interests but funded for different purposes with different clientele and so there’s gradually a diffusion of effort and one of the big issues in strategy is simply the organization it it complex organizations particularly have a you have a hard time focusing energy because of all be different interests yeah actually want to talk about both those things so I’m glad that you teed them up let’s talk about power what is this idea of power and how does that play into strategy why is it so important and then what are some examples of power that people can think about when they’re trying to think about implementing and adding a power to their strategy well in a competitive situation fundamental aspect of power is something that’s going to give you some sort of Advantage usually it’s in a of some kind two if two fighters are equally balanced or two horses are equally fast or two armies are equally and they they meet in competition it’s 50/50 who knows L will happen for a strategy you need to exploit an asymmetry of some kind you go a little faster of their something has to be different between the the two things so that’s the beginning of power is a cature we can think of it as leverage uh sometimes being first is a source of power uh being first to recognize something can be a source of power having a reputation of a certain kind gives you some power that someone who doesn’t have that reputation doesn’t have on the other hand having a wellestablished reputation of a certain trit can be the opposite of power because people don’t expect you to be able to do something new they expect you to be able to do this but not that having relationships can be a source of power when gerner took over IBM as it was failing in the face of the microprocess Revolution he recognized uh that their primary asset their source of power was that they were respected and they had they had up into every large corporational plan no way that and as an actual producing company and so he said we’re going to embrace our customers for Bear hung out CS you’re going to serve our customs because because that’s our source of our power that’s our leverage that’s the asy now the world begins to change and Computing begins to move to the cloud and IBM’s customers the largest companies in the world are the most hesitant to do that because they’ve got the big it departments that don’t want Mo Tre Club so small companies move CL and the big companies are it’s insecure in the clan we’d have to lay off people and we have these big machines we like to run and so IBM then becomes disadvantaged in the new world because it inherits this big company orientation and that lighting behind so so power the opposite side of power is this what you inherit from the pendant can be the wrong CL and so what but the source of power is is that source of power can be an invention the source of power can be uh a particular customer base that that you have identified it it doesn’t last forever power but but all the different sources of advantage that are sometimes transitory and sometimes permanent are are sources of power that that a company has to use to compete and survive imagine people listening are just like oh man I got to figure out the power that uh the advantage that I have with my business is there any advice you could share about helping people figure out where their power might lie well that’s that’s that’s a good question L you know so how do you how do you figure it out so I start as I said earlier with the symmetries and in what way is my company different than other companies in what way is my team difference what what do we know that other people don’t know what do we possess that people don’t possess so there has to be some as symmetry to to create uh competitive power there has to be something different sometimes you have to redefine your space down small enough then you can actually see it because particularly a smaller company that doesn’t have worldwide power has power in a certain Marketplace or certain set of customers or sometimes it’s not customer sometimes the power isn’t who you can bring in you can hire so if you’re you invented chat gbt you can bring in the smartest AI people for a year or two uh because every only one smart AI want work at The Cutting Edge with the current winner uh then they’ll start to argue with each other and infight and they’ll be all sorts of embarrassing Personnel things going on and someone else conrat that position if it’s not well managed business is is it’s exciting in that sense that it’s not stable it’s not it’s not just as it was when I was first studying it was not just IBM and Sears and at forever there’s a constant changing of a guard for better or worse for better because if you look at government there is no Changing of the Guard they get stifi makes sense so in your book you have this whole list of types of power I’ll just read them real quick leverage proximate objectives chain link systems design Focus growth advantages Dynamics inertia entropy there’s also the book obviously the seven powers that a lot of people are aware of I guess how do you think about just like the spectrum of types of power you can have is it is it is this it are there others right I started to make a list there in the book and I wrote a bit about chain League systems and uh today I mean the power that that that new business models are exploiting is the power of the user base what we called years ago n c where the more users you have uh the more useful product so did the idea of network effects first RS with the fold system which the idea was uh that you don’t want to be connected to a telephone system that only connects it to a it’s not all that useful that to connect to the work to be useful and uh my my colleague morvin lman was taking the economics course at uh at Harvard University at the same time that Bill Gates was a student in that classroom Professor Jo a network effects and of course that’s what catapulted him and his software Ms Doss at the time not Ms Doss he had something called basic that uh the network effect was huge he got angry about the network effect because people wouldn’t painting they kept stealing it and using it but presume everybody in the microcomputer industry had mbasic then we get the network effects uh from not just soft for but user Bas is now with the internet and so you get network effects with big social media no one wants to be on a social medium only three other people are social so you’s got having a large Network Amazon and get big fast because the the old the economics are are amazing so we used to say well in department store economics are that you’re you’re saving people the cost of going out of the store Mory DST stre to another store so now it’s all in one place and supermarkets the same thing but they look at a thing like Amazon where there the ease of shopping on Amazon keeps people from leaving it and going to another website other websites got better and better and some of that is less strong than it used to be and this is constant struggle but nevertheless the size of the user bench there is an important source of symmetry and power for the people who come out ahead and won that battle for this round this this five years 10 years how long does it last before some other thing begins to take precedence and now uh we have two sided markets whether it’s credit cards or or places where both buyers and sellers get together and so here these big forces that companies are playing with right now are these Network effects and when the new generative AI we have the possibility of stronger effects than we’ve ever seen before but we don’t know yet but the suspicion is this sizes would matter that the size of the data that you could put into the learning algorithm is going to make your AI better and so again big is going to matter just think of Google and uh their ability to improve search based upon all the searches that go on on their base every day it’s it’s very hard for Bing to catch up because Bing doesn’t have as much data to trade on and so unless there’s some new innovation there that isn’t just the amount of data you the leader again has this asymmetry working for now the way you get around all that is by being specialized by by owning a particular approach that isn’t the market leaders and it’s always been that way in business but you know our attention is often attracted by these giant so yeah sources of power today when we look at there no business models or they’re part of the fabric are these Network effects and things like that that are very very strong and uh people are trying to get those in startups and in small firms uh within a certain Market state and build it as fast as possible to get ahead of others there’s been Venture Capital available to to try those experiments and some of them work and some of them don’t but that’s that’s this new uh age we’re in now where the speed of building a market position with network effects is is is a dominant game in the tech space I feel like Twitter is the ultimate example of the power of network effects especially recently where if you think about it everything about Twitter has changed and it still continues to run like he laid off 80% of people at the company they changed the name they changed the domain basically the algorithms changed like what is I don’t know what is still the same how can you lay out considerer to people that it it still runs I mean you gota wonder I I love Twitter I’m on there all the time I feel like it’s never been better which is kind of wild and Twitter’s fascinating I mean I I I I tune into it every couple days and see what’s going on and they it it is just a an amazing Rumble of opinions and statements it’s it’s much more interesting to watch five music though there’s a lot of diagnosing and not a lot of uh concrete actions but anyway I wanted to come back to the element about power I think when people are thinking about power it may not be clear where that plugs into the diagnosis The Guiding policy and the coherent actions where should you be thinking and implementing this idea where my power is when you’re laying out your strategy to undertake a strategy that you think will work you’ve got to have a reason that it makes sense and that that reason is is is is derived from from some source of power some source of Advantage ultimately your power or your advantage is is is something based in history that has the feel of reputation or institutional skill or it’s some kind of as symmetry or knowledge that you have that others don’t have so it’s a resource that you can use that your competitors or others don’t have equal access to because because youve either have mastered it or you own it or inherited from the past all those things are sources of of the the power that you used to make it not an even bet so when you walk into uh the casino there’s there’s there’s well maybe if you play poker with skill you can expect to make some money but the general casino games you’re you’re go to expect to lose and in business statistically if you come to me and you say I’m going to open a new restaurant which is my strategy be my answer would be don’t open the restaurant invest in the S&P because the statistics are that new restaurants failed so what makes you think is that you can succeed oh I really want to succeed not good enough I trained under a chef who’s been very successful oh that’s interesting tell you more uh so there there where’s the Symmetry here where’s the source of power that that where you go from the the odds the standard odds in this game are against people where you think the odds are in your favor uh and that’s that’s the source of power looking for looking for this this information this skill this this thing in the field the way the resources are arranged that’s going to give you this Edge and some of that is is sort of part of the situation and some of it’s how you how you shape and focus your actions strategy tends to be surprising when we see it when we see it work and surprising because we don’t expect it we expect people to bumble around we expect armies to bumble around we expect nation states to bumble around we don’t expect them to execute coherent strategies United States went to Afghanistan and it wanted to catch Osama b l but at the same time they didn’t want to put an Army in the field but actually catch him because it would be embarrassing to have that many Americans in the field that’s what happened in toror this Secretary of Defense said no we only made it look like we’re taking over the country so they didn’t try to catch him as hard as they could and we want to have the education of women and and we want to have the democracy and we want to have have a long list that we would to have no no opum production but at the same time our allies are the Opium producers uh it was a Taliban that got rid Americans didn’t do it so we had all these different objectives and and it doesn’t work you need to have a focus on something achievable what’s achievable on y nation building is hard stuff takes a century you know Afghanistan I I’m all to contingent here with Afghanistan but it’s a really interesting subject Afghanistan was a warlord Society a bunch of different Warlords running the place uh well what the what the Society where else do we look for analogies well could SC in 1650 you can look at France in 1300 you can look at Japan uh before the modern era these are warlord societies well how did they go from that to being a cohering government that maybe wasn’t Democratic but still there was a government said of just much War it took took some to conquer on the rest and then it took a long time for them to put in the structures of of government and then maybe became a democracy maybe not but that’s the process it’s not like you just go in there and say you’re now no longer a warl society because we’ve decreed it h i don’t know you’re going to ask me more questions about what it is people should know and how do you get these sources of power how do you get these insights I’m a big fan of History I’m a big fan of knowing things about what happened business history biographies world history I if you don’t have access to other times and other places and other things that have happened it’s very hard to think strategically about the situation you’re in because there isn’t a science of strategy it’s not like physics it’s not like engineering where we can write down the equations of stress or beam and say how thick does the beam have to be it’s not like that it’s a lot of it is is based on analogy to previous Human Experience that is an amazing Insight is there anything you find most rich and valuable in terms of History periods Empires stories that you find most connects as an analogy is it like is there anything you find consistently as useful or is it just read as much as you can and you’ll often find something in there yeah the the further back we go in history the the leader is the is less Rich the best histories are are are written by the people at the moment it’s happening or very soon after you know history books and things like that are someone’s opinion uh but but you know like our own history here in the United States and we have pretty good documentation about what went on in the Indian War what went on why we had these big uh cycles of economic growth and then depression we had depressions in 1840 and now in 18 after the Civil War and there was another huge Panic depression in the 1890s uh you wor a lot of people don’t even know that these things happen how do they happen and of course everybody knows about the Great Depression you 19 293s but go back and if how did that happen why didn’t that happen and you’ll hear professors op about why it happened but there’s no agreement the biggest economic fact of the last 150 years AG got Wayland go back and and uh then then you can go online and look at the Wall Street Journal the your tis from that era and start in September of 1928 and just look at the front page every day which I done and you can see it unfold and it’s a surprised everyone there he well forgers laid off some people but it’s temporary they’ll hire them back this economist says well it’s a temporary this it’ll come back and and it gradually gets worse and worse and worse and there’s no understanding of it there’s not a lot of analysis and so you got M treatment saying oh it’s monetary they didn’t loen up the money supply you got other people saying things but but put yourself back at that moment in time and see what people saw and realize that no one understood what was happening and to form your own opinions that’s the that’s the diagnosis skill or that’s a that’s the feeling now let’s suppose follow the book you’re on a Cru ship and you follow and you’re you’re now in the the ocean it’s terrible and it’s confusing and there’s weights and there’s water and there I don’t want to drown and you look around and you see oh here’s a floating piece of wood and grab it wow that feels a lot better that’s how it feels when you look at a confusing situation and the first idea of how to understand it comes to mind oh yeah I’ve got this pce of what now I’m not drowning but is it right the most important intellectual tool we have is to think again to to say okay I came up with this diagnosis because I thought this and I thought this is there another way to look at this situation is there a bigger piece of wood over there than I can dve on to that’s the hard thing when I looked at the Great Depression I what I saw is the horob so if you look at Capital good all capit most Happ but that the public P the adoption curve goes up like this it Peaks and declines and then it comes back up again because it comes a point where everybody body who could afford waterers Scout and then the new sales drop off and my mind that’s what I saw 1929 everybody could afford a car had a car and the Auto industry began first science so the Great Depression in the Auto industry so that was my plank that I W now I don’t see anybody else writing about that but that’s the that’s the exercise and and to to exercise your mind about trying to understand complex situations it best to go back you don’t have to quit the Great Depression but you can go and try to find situations that other people have to deal with and and look at as much data as you can and and to practice that that’s what education should be in a business school it’s not they teach theories now because it’s so much easier to teach a theory than intellectual structure it’s also a lot more work reading a lot of books and history and studying and thinking I had a colleague at UCLA who assigned a book to NBA students and they went to the D and and kicked out of the course a book he wants to read a book no man sounds like you have another book in you writing about the Great Depression and what really happened there maybe maybe oh man exciting this episode is brought to you by vanta helping you streamline your security compliance to accelerate your growth thousands of fast growing companies like Gusto Comm Kora and modern treasury trust vanta to help build scale manage and demonstrate their security and compliance programs and get ready for audits in weeks not months by offering the most in demand security and privacy Frameworks such as sock 2 ISO 2701 gdpr Hippa and many more vanta helps companies obtain the reports that they need to accelerate growth build efficient compliance processes mitigate risks to their businesses and build trust with external stakeholders over 5,000 fast gring companies use van to automate up to 90% of the work involved with sock 2 and these other Frameworks for a limited time Lenny’s podcast listeners get $1,000 off vanta go to v.com Lenny that’s V n.com SL Lenny to learn more and to claim your discounts get started today I wanted to zoom back in something very tactical so say you’re a say product manager listening to this that is thinking about writing or has to write a strategy for their team say it’s like they’re working on the onboarding experience of their product and they’re about to sit down and start to write out the strategy for their team and say they have like a general idea what they want to do do you have any advice for just like how to lay out a strategy as you talk I think of there’s a section diagnosis section guiding principle section actions and then there’s power in there in the guiding polic right is that how you lay it out you have any advice for how to write this out so I wrote the Crux because I felt that that colonel was not sufficiently sharp enough for people and even in the Crux I could if I could rewrite the C’s book I would maybe write it a little differently today a whole couple things I would I would change first it’s really important to understand the challenge the problem the diagnosis is not mely understanding the world it’s understanding the challenge you face what makes it hard so the question I ask client is exactly that what makes it hard client will tell me oh we want to open up business in Australia we it’s a market we haven’t had and I’ll say okay so why are you and I talking about that you’re the CEO just tell somebody to do it what makes it hard oh well we don’t know anybody in Australia and they kick us out he’ll tell if if if you P he’ll tell you why it’s hard but that understanding hasn’t been percolated into a strategy part of the problem is that the concept of strategy has been so beaten up by thousands hundreds of books and thousands of we websites that people have a hard time trying to figure out how to create a strategy because they’re drawn up down left right so my two pieces of advice to anybody that’s actually trying to do this is a state the problem and B don’t call it a strategy call it an action agenda that you’re not creating a strategy you’re creating an action agenda what are we going to do about this problem that’s essence of what you’re doing when you’re thinking strategically you’re recognizing the problem and you have an action agenda to deal with it it’s not five years out 10 years out it’s not your general Mission To Build a Better World it’s none of that all of that is a different literature form there huge numbers of people out there willing to sell you device long your mission and your vision and your values and your all these things that have to be in place before you can have a strategy and that’s not true a different model I start now with ambitions because people want to put Ambitions in place they get anger with me if I don’t allow them to talk about their ambitions so we we sted ambition and okay you have all these Ambitions and I write in the Crux that when I was 25 I wanted to be a top business school Professor I wanted to be unfortun directors and I wanted to drive a Morgan drophead plus4 I wanted to climb the great mountains of the world I wanted to learn to fly an aircraft I wanted to marry a beautiful woman and have successful children I wanted to have a townhouse on the E we in Paris and on and all I had a lot of Ambitions that’s not a strateg we all have Ambitions and every company should have Ambitions if we look at all those ambition and let’s say I’m 25 years old well what’s keeping me from reaching them all well I’m not ready to join board of directors I’m not experienced enough oh okay so I put that over here I can’t afford the 10 okay over here how about the Ambitions that you have any chance of of making progress on now well beautiful woman yeah I don’t know any women F out of me if you hope we can do something about that so which of your your Ambitions can you begin to make progress towards reaching and what’s holding you back what are the barriers what are the problems so I I approach the question of the problem now through the filter of the ambition that that these are Ambitions fine let’s accept them all and which one can you actually make some progress on today and and what’s making that harm what what are the challenges so you’re you’re choosing a challenge you’re choosing of the possible challenges you could face up to you can’t do them all so there’s a focus thing you’re choosing which challenge to focus on and that challenge has to be a important and B it has to be achievable you have to it has to be something that you can address it has to be an addressable Challenge and so the the search for an action agenda not calling it a strategy is this balance between problems that are important because they’re close to your ambition and problems that you can actually address and do something about and that that overlap then becomes the choice you make okay we’re going to we’re going to go after this and here’s the action steps we’re going to take to do that and if it’s big company the AC steps they extend over two to three years smaller company to year six months to a year these are things we’re going to do not goals we’re going to achieve these are things we’re going to do action steps that’s that’s sort of the way I put it together today which is slightly different than the way it’s put together in the Crux yeah I love this advice that’s such a simpler way of thinking about strategy it’s an action agenda here are the things we’re actually going to do and then it starts with The Challenge and just to talk about the Crux briefly the Crux is named after this concept in mountain climbing of the hardest point of the mountain climb where people if they get past that it’s all downhill and I think basically the point there is focus on the most challenging like the biggest challenge that you need to overcome to achieve these Ambitions you’re describing is is that roughly the way to think about it yeah yeah and the idea comes from a sign and it comes from climbing I used to be a climber a rut climber in a snow Climer and a Crux and a climb is the hardest part the hardest pitch or a pitch the hardest move is the Crux of that piece and then the basic advice to a climber is if you can’t do the Croc don’t do the clim because you’re going to fall off there now that’s not exactly because you can try it over and over again till you get it but in general particularly if you’re looking at an helpline clim you better not take it on a clim where you can’t handle the crutch that’s why people go buer in the Builder still up to handle certain kind of crutch and so that’s that’s what the concept of the CR comes from now in in business the crutch is the hardest part of pring and from the design point of view skill do designers whether they’re an engineer or an architect someone else there’s there there’s usually challenge problem iay was hired to take a look at the Loof in Paris and had they had a Dusty parking lot in the center of this giant Palace it had become e and they wanted an interest to live there and the problem is they didn’t he didn’t want they didn’t want like a new building that would obscure b l itself the building itself is part of the story it’s part of the scene and yet at the same time they they needed to have an interest because the entrance at that time was all from the side on a sidewalk and and he looked at the situation and and and the and the competing needs and the problems and you had an insight into well build a transparent building build a building out of glass so that you see through to the loop doesn’t obscure and of course you build a rectangular building out of glass that top will get dirt so build a surely enough why that design Insight is something that software Engineers Hardware Engineers mechanical engineers space science Engineers like I was experience when we look on a dilemma and we try to focus on what makes this hard and and then and then by focusing on the difficult we we see a way around it heon must focused on well why is it so hard to use a rocket and it’s so hard because as it comes back into the planet at 18,000 miles an hour it burns up in the atmosphere or we have to spend a lot of money on heat shifts and at some instant he said to himself why not like science fiction just turn it around and have it land on its rocket well it’s not enough fuel well why don’t we carry more fuel so SpaceX when there was designing I was a conceptual designer but machine that became Voyager and went out pass the planets into iny space where it’s floating around right now well one of the problems is how do you know where Jupiter is it’s right there okay but how do you know where it is plus or minor not mind and you know exactly where it is when we set the EM Mission to Mars we were off by 500 miles so Jupiter how do we know exactly where it is because we can look at it through our telescopes so we can look at it from the right side of our orbit and the left side of our orbit but still there’s a a couple thousand miles hour in that that’s too much and that studying that problem The Simple Solution suddenly flashed and I I wish I could CL it was mine it wasn’t which is oh we’ll take a picture of it once we’re halfway there we’ll send that picture back and we’ll see it against the distant stars and now we’ll have a triangl is thing now where it is so designers experience this sense of focusing on the Crux of the pro the Heart part and then seeing way true and that’s strategy strategy isn’t picking a strategy out of a list of common strategies it’s looking at the problem what makes that problem hard and seeing a way to solve it now it’s called insight and insight is scary it’s scary because it’s not guaranteed to happen we want to innovate but we’re scared of insight we want to be the first but we’d like to pick our strategy off a list of common strategies for being first we want to beat the market but we don’t want to study enough to have an Insight so Insight is critical Insight is not magical it comes from immersing yourself in the nature of the problem and you will have at some point in inside about how to deal with it it doesn’t always come when we want to it can come while you’re driving the car can come the next day it can come in the Chanel Charles stor reports that his insight into the nature Revolution came as he stepped off um a carriage into the village trade somewhere boom suddenly oh yeah I thought it’s obvious it’s like how we raise animals we we read the read the strongest sure why was that so hard for me to see so I think one of the big takeaways here is that if you want to get better at strategy or be more successful with how you think about strategy spend a lot more time on diagnosing the problem and finding the biggest challenge that is keeping you from what you’re trying to achieve and your Insight might come the more you immersed and call an action agenda here’s what we’re going to do not here’s all the things we wish would have I love it you mentioned this point that some of the biggest challenges to executing a strategy is organizational Dynamics and politics is a part of that is there anything you could share for folks to help them through that you talked about one of the biggest challenges people just want to keep adding more priorities there’s all these needs everyone wants to include their thing in the strategy is there anything people can do to improve how this works typically I’ll say typically we need hierarchy of power because there has to be some mechanism for deciding what we’re going to do and there’s people with different interests and different P private interest and public interest and somehow there has to be a choice about putting some of these aside and doing this that you can’t say our strategy is to do everything that everybody wants to do that’s what happens when you form a committee in a city and you say what’s our city strategy they say oh we’re going to paint the pork bges we’re going to clean up the Gran us we’re going to building this forgot they have a walk that’s of everything they’re going to do with that and anybody who raised her hand and says well what about the birds can we you know oh yeah let’s put that in too that doesn’t go anywhere so we inside organizations people have different opinions so that’s part of they have interests that they may not stay clearly I interviewed secretary defense Donald Rell while we were invading Iraq second time and I was actually interviewing about budget matters but he asked me well what are you do Professor I said why I do Strat and he said well strategy that’s a hard subject he said you know I’ve got people here in the defense Department who have an expert on anything you want to know the clan structure in Iraq we got people to know you want to know the weather we have people to know you want to know how many C te we can fly in 24 hours people will know I got any anything you want to know we got someone who knows that but they all disagree and each have their own private agenda they have a contract they want to get they have a company they want to support they have conceptual idea they want pushed so every little bit of information comes with an agenda sometimes obvious sometimes didn’t and how do you put all this stuff together come up with strategy it says do you academics have a solution to this and I said no we don’t we don’t know much more than you know what you would do 3,000 years ago you should put five to eight smart people in a room and you tell him to come up with something but his question is at the heart of what I call a Founder which is how do you get a group of people to Coal around an action agent and and what work process would you use and how do you do that it’s a different question then what should our strategy be the question is well how should you go about creating a strategy should you ask the product manager to write a t or should you ask the CEO to come up with it should you hire a consultant how do you where do you how do you do this my experience working with companies is that the senior Executives have to do this and my experience is that the senior Executives know pretty much everything you need to know to do this that you don’t need you know consulting firms to come in and analyze everything and to do yes you’ll gain some insight if they come in and do a competitive analysis and a customer analysis and all of that but the basic issues the challenges you’re facing they know that it’s not mysterious they know all that stuff but they disagree about the importance of different things and more important ly they occupy positions of power that if we go this way this is going to be hurt and if we go this way they’re Bing more money for that and so they’re not their interests are not all LED which is part of what PH was referring to and so that the problem of strategy inside an organization is diversity of interest and and fear of action because action when you do something in your organization of any size it involves people changing what they do it involves changing power relationships someone humans in some way that someone who’s been the Alpha maybe is not the alpha anymore someone else is the alpha this is this is heavy stuff and this is why we have a hierarchy because someone in the end has to say it’s going to be this way and that’s people are hesitant to do that CEOs are hesitant to do that more so today than when I was a young man it’s it’s become hard for people to do this if you go to the bookstore and look at the management section in the bookstore most of it’s about leadership and the leadership is mostly about perfecting yourself it’s not about leading anybody the the theory is that if you perfect yourself and somehow raise come out of your head and people will follow you because you’re so magnetic and you’re so perfect and you’re so wonderful and you’re so insightful and that people will follow you won ever have to say figus do that it’s so embarrassing to tell somebody with to do and so this is the world we live in today where one of the problems in doing strategy is that it’s somehow been displaced by this literary form of am Mission and and management is being displaced by leadership which is the idea that the leader has a vision and people it did happened in the 80s there’s a whole literature there about transformation leadership that has percolated through the system and those I’m not against leadership but you have to tell people at some point we’re going to do this and we’re going to do it this way and Bob’s going to be in charge of this aspect and Jones’s going to be in charge of that aspect and there’s a hesitancy to do to make those choices because that’s part of the action agenda so the takeaway there is essentially have a decider makes me think of actually of George Bush he talked about rville but George Bush’s famous quote I’m the decider I don’t know if you remember that yeah that’s true one of the things we see in in in government particularly is is presidents have a hard time getting advice because they they surround themselves with people who want to please them never one we rarely you know it used to be I remember during wro Wilson’s Administration when he decided to take some hard action the litania S and he had to do something Visa Germany and the Secretary of State disagreed and quick fact that was it quick I disagree op don’t see that so much anymore the uh people organizations get Frozen because of the difficulty of changing positions of interest and Power in sh humans are complicated well if you look at Nokia you know one of the big examples of of strategic errors or Nokia was the leading smart phone maker in the world and somehow it lost its ability to compete and you know interesting question it’s been fair amount of research on this is how did that happen one way it happened was they replaced the engineers who used to run the company with lawyers and accounts nothing wrong with lawyers and accountants but they they didn’t have a feel for this Hardware software set of issues and another was they they put in a matrix organization that so diffused power inside the organization that nobody was actually in charge of in particular I’m exaggerating but you know the CEO kept pounding the desk and saying you know Apple’s coming out with this Smartphone and you have a touch screen and somebody here should make one of those there was no one in authority to do such maybe a final question on the other end of the spectrum from an noia from a startup Founders perspective what is a strategy and what should a strategy look like if you’re just a founder pre-product market fit just trying to figure out where where you want to go what should a strategy look like there do you even need a strategy well it’s it’s you’re you’re dealing a lot of uncertainty when when you’re a founder and a startup you’re making a bet you’re making a bet like an oil well wildhater would say I bet there’s oil under this ground we’re going to drill we’re going to find it there’s a certain amount of bet that’s going on and you should be clear about the nature of the B the the reality is going to be revealed to you in bits and pieces as time passes whether a certain approach is going to work or not what we find doing research on startups silicon valy startups is they start out typically aiming at a particular product Market solution you know the idea that you have in your head is there’s a set of customers who want a with like to have a or being denied a but we have a way of giving them a something product or service now some people they aren’t that even Advanced they basically say I know how to make something and I’m going to try to sell heal last TR but if if you’re if you have any chance of succeeding you have sense you have a target market you have a solution to the Target Market’s problem in mind and now you’re going to going to go after and the research that we have done on these startups is that Germany does all but the ones that survive and prosper switch they said well it isn’t that customer it’s different customer you walking that customer oh and that customer wants to S FR they and they they switch over a period of of a year or two three years bang bang until something begins to to click and then begin to grow and begin to add functions and assets so there’s a search there’s a search like a truffle how searching for the Truffle that’s going on and you’ve got to be I think you’ve got to be two minds like so many things in business when you’re doing that’s you got to be two minds You’ got to be convinced of the certainty that you’re going to win and you’ve got to be willing to ship when things aren’t working and that’s that’s that’s a double jointed exercise that some people can do and some people can’t it’s almost a human skill to to both commit and to be willing to move with a to bet uh you should be clear in your own mind about the nature of the situation the technology that you’re you’re betting on oh now sometimes it’s a so fast like generative AI is right now that you can’t be sure that you’re going to take a position where you think things are going to be in year and that’s very very entrepreneurial very edgy stuff um but it’s go back and read about the beginnings of the electrical industry or the beginnings of Aviation or the beginnings of motorized this and beings of cars I mean people had to bet about what this industry would look like the first cars were electric cars first car sold in quantity United States were electric delivery vehicles used downtown and cities delivering products that were like R batteries that was the BET all that changed with the first world war the United States built thousands and thousands of gasoline power trucks to go to Europe and rustle through the mud and people came back knowing how to fix those engines and those trucks got sold off its wholesale to Farmers he gives them on their fields and we had the gas take off like a rocket so it’s you cannot predict the future there’s an Arab saying that I like that says he who forecasts the future lies even if he tells the truth we’re making bets that’s what business is we’re making a bet and if we’re a rich company we can make a bed and a fort to youan but if for a startup we have to be fast we have to we have to adapt as it as as the information comes in and and that’s the nature of the story The Action agenda has to be quick adaptation to to to changing conditions I feel like you have another book here where you could adapt a lot of this wisdom to startups I’m looking at my notes from what we were talking about earlier and you had this point of when you’re trying to write out a uh you call it an action agenda not a strategy you’re basically on the hunt for a big problem and an important problem and an achievable problem and that essentially you can boil that down to that is the job of a Founder to find an important problem and achievable problem and then solve it for a lot of people yeah yeah I like that I like the other exercise I used to take my students through was U what I called the value Deni now what is it that you should be able to buy but you can’t M you know and at the time I taught this stuff I was upset because I lose my baggage and know non-stop flight from Los Angeles to Paris so I’d like to buy bagage insurance I’d like to BU a like how do you get your bagage not to be lost now with with security systems in place it’s less less coling I can I can I find someone to help me remodel my home was going to be on time and I’ll but you not available can’t buy it any price uh if I live in Hong Kong and I’m going to the airport I can drop my luggage off downtown and it arrives at the airport checked in I don’t have to let it why can’t I do that in the US um value the and then engineering you know thinking about how something ought to be you know that’s how sales worth.com got started was well how should this be it shouldn’t be a computer it should be a web page it should be like ad Wason for books and so that was the beginning of sales weth thought count I asked a group about students want to think about the perfect window cuz is physically something we could think about in this classroom without doing a lot of research well what’s a perfect window oh perfect window should be transparent should let the sun in all right so it’s just let in the light but not all the time sometimes you want to watch the television so it should so dark draes for for Shad is okay it should let in the air good but not the Bugs oh have a screen it should let in the air but not the noise that’s a little harder yeah know so you go down the list of things that a window should do it should let in light but not light it should let in air but not the noise it should not let in there we don’t want it it should let not let in the bugs it should maybe have shuts or nut shutters and so I said how could you design the perfect window what would it look like and there’s some kids at MIT that had developed this thing that lets in air but keeps out the noise these little a auditory filters keep out noises and certain frequencies well we don’t have a perfect window but you know think about it you know Windows could be better than they are all and that’s a real simple device that we’re all familiar with and look around you look at everything you’ve got and say well how shouldn’t be and there’s opportunities there now a lot of the times the opportunities are blocked by the lack of certain materials or regulation Regulators have decided that you can’t sell a car in the United States unless it goes through a dealer so that that holds back innovation in that business and so uh you Plum how should pluming actually work well there’s whole search of rules about how clubbing works and electrical things work you can’t innovate there very easily because of the underwriters labs and the unions and a lot of the stuff that’s done in home construction is there to create jobs you know to people just call so how do you get around that you you have to look at places where it’s possible to Innova first of all but yeah the idea of how do you make something better how you make it perfect what would the perfect tot you like and so on these are real s simple silly questions but they lead to new new businesses do first if you pursue them I love how full of startup ideas you are and I also think we came up at least two new books that you can write I think you’re going to have a lot of work to do after this conversation final question is there anything you want to leave listeners with or take away is there final nugget you just want to share for folks well I want to share with you that strategy is not mysterious that I’ve spent my life studying strategy pursuing IT consulting on it writing about it it’s not mysterious it’s about solving problems it’s about solving the most important problem you’re facing that you actually do something about you don’t have to be some to the call of the strategy but you need to be focused on something doable and be consistent about I have a long list of things not to do as a fourth book thinking about writing called don’t do that I would read that I love that title can I tell you a story absolutely my wife Kate took up skiing when we got married 24 25 years ago and uh she had this stem that she couldn’t get rid of when you make a turn you don’t turn like that you put the ski out and St right made her ski on want ski and did all sorts of things to that she couldn’t she couldn’t fix it and finally we signed up with a illustrious ski teacher and asked him freeay T program guaranteeing that she would lose her sta exceed all and so we went there and on the second day I follow behind the instructor and her to see what was going on and they had been through some exercises on day one but day two they were focusing on it and she had put out her ski like that and he yell at her he say don’t do that and after a day of being yelled at don’t do that she’s didn’t do it anymore she was fixed so the secret technique that they had in this program for curing was to yell at you and telling you don’t do that so I’m thinking about a book called don’t you about the business thing where I’m not sure it makes sense but you have to Noodle these things for a while before they begin to gel yeah I love this idea reminds me one of my friends is a therapist and there’s this video by Bob newart where he’s a therapist and uh someone comes to him and they they’ve got all these problems like um I get really sad when I think about my mom and I have this chronic pain and his advice just just stop it just stop do that stop cing R just stop it that’s the advice yeah and so I feel like there’s a lot of synergy there all right well with that we reached our very exciting lightning round are you ready I guess so first question what are two or three books you’ve recommended most to other people I feel like this is going to be a challenging question but what comes to mind of is yeah know I mean the books CL Christians do stuff about the anator do is is always solid books on strategy that that I recommend to other people um aren’t that many so I like playing to win by Roger Martin I really recommend other kinds of books uh strategy books I mean it’s easy to get a list of strategy books but I I think you should read biographies and histories I think you know the book about Steve jobs is brilliant uh I like I like books about uh Business Leaders I recommend uh Andy gr book only the paranoid survive uh and a few others but um I I recommend that people read more broadly about people rocka’s history is fantastic you know the guy and then and the stuff about Rockefeller and how he put together I mean Rockefeller was a grber baron and he built an Empire and all that you learn that in school but what you don’t learn in school you dropped the cost of a gallon curac from a dollar to 10 cents okay that’s the labor eron and he made kerosene so inexpensive they he drove for little mom and pop rep buers out of business which is why they hated him so you know he was he was vicious competitor but he he dropped the price of something by an order of langage fascinating so yeah I mean it’s important to to understand stories not just theories but stories yeah I love how this always comes back to just being steeped in history and the specific point about biographies is really interesting and we’ll link to all these books that you’re mentioning in the show notes is there a favorite recent movie or TV show that you’ve really enjoyed oh yeah sure well I like ystone like everybody else fascinated by it recent movies other than ystone I know I L sure uh don’t have a TV in the house right now so I’m sort not connected that’s amazing that’s the dream I wish I could do that there will be a chy but that room was being remod okay I see just a matter of time okay uh is there a favorite interview question you like to ask people you interview maybe specifically around helping you get a sense of are they good at strategic thinking yeah I like to ask people about what have you done that was hard that you prow it what have you done that that was difficult and what was it and why was it difficult and how did you how did you get it done I like to ask people about what they think was an interesting strategy from any time in the past they want to they want to call out depending on the person’s background I I might ask them about a particular company or situation and say you know why do you think this worked or Why didn’t it work so I don’t tend to ask questions about Theory they ask questions about things that happened and partly I’m looking to you know this person have any knowledge about the world or they just they just know what professor said last year um so that kind of thing is there a favorite product youve recently discovered that you really like whether it’s an app some you bought some in the house some on the road well we got there new memory foam bed that we like it’s pretty amazing Innovation it’s pretty I didn’t think we like that but we do I really am fascinated by I’m about to pull the trigger on buying one of these news smart telescopes smart telescopes I haven’t heard of that Mak so smart 12 in reflecting telescope and uh it’s too heavy to look around it’s too difficult to set up but there are a set of new smart telescopes that run on a battery and you can put them outside and the way they work is first of all they know where everything is in the sky which has been around for a long time but the new thing is they they it’s like astrophotography they they’ll look at something for a minute two minutes 10 minutes an hour and form an image you don’t look through the telescope you look at it on your phone or your computer but you can see now the nebula that maybe the web telescope can see and you can see it now you can see stuff out there uh that you couldn’t before and these are new things for you know $1,000 $2,000 that that are remarkable in what they can do excellent choice next question do you have a favorite life motto that you often find yourself coming back to sharing with friends either in your work or in your life I used to have a final lecture I give to my MBA students about little pieces of wisdom things not to do things that offend people in other cultures don’t do this if you’re a turkey it mean something else there but I’d also say at some point your spouse for your partner will ask you do you still love me and there’s only one correct answer to that question which is more than ever and my wedding ring says that can shited more than hour so I don’t know if that’s what you’re looking for but that’s absolutely white sense piece of that is really good advice gave me tingles I’m going to use that 100% thank you for some marriage advice final question your daughter Cassandra is a writer as well in fiction she writes fiction is there anything that she taught you about writing that’s helped you become a better writer yeah Cassandra is the oh my God she’s got like 25 books on in air johnes besteller with 13 fiction now U she started writing when she was 12 or 13 she had a a talent for it home well she’s told she’s told me about the tension that you have to create you know you know she writes Noels and that you know it’s not interesting unless there’s well she started we started talking about this when she was young she was 14 and she asked me about what is romance and I said well romance is a barrier Roman is where there’s a difficulty back to couple and you know there’s some kind of she said oh what he’s Rich she’s poor yeah like that or he comes from the north side of town she comes from the south I said like that yes and she said oh like he’s a vampire and she’s not okay you know but so yeah yeah she has has alerted me and talk me about that that ways of creating that kind of tension in in writing that it doesn’t work as much in business writing as I’d like but I try to create this sense of uh it’s good strategy bad strategy is the sense that you know there’s a there’s a tension between the right way and wrong way or if not right and wrong way at least there’s a tension between should we go left or should we go right it makes it interesting otherwise it’s uh it doesn’t catch people’s emotional core amazing Richard thank you so much for being here I think we’re g to help a lot more people face bigger challenges and face them head-on and put together their action agendas and overcome this Crux thank you so much for being here two final questions where can folks find you if they ever want to try to reach out or learn more about the work you’re doing these days and then how can listeners be useful to you I have a little website called the C book.com that has information about me and and about the books so there or go write to me at UCLA I don’t pay attention to the UCLA website anymore but if you go to the cb.com there’s uh there’s some email addresses where I can be reached my little company is called General imagination it’s like General mot but a lot smaller it’s just me and you you can reach me at Richard at general imagination. comom you know you can help me out oh tell me stories stories about your experiences trying to create strategies particularly inside organizations you know that how’s it how’s it worked for you trying to get something done inside organizations I’m I’m happy to to add more stories to my riet farm oh anding hir wait say more on that what is it that people would hire you for at this point in my life I do public speaking I speak on strategy and growth and that just got back from Korea doing it a talk there I do a little bit of teaching not much maybe for the military people they they want me to come in and do a day on strategy and I do foundies Foundry is where you commit to a problem oriented approach to strategy where the organizational leader the CEO usually plus another seven or eight people take two to three or four days off and we meet and we try to come up with in the end an action agenda uh and it’s a it’s an interpersonal exercise I’m the facilitator I don’t tell them what to do but I enourage them to look more deeply and to understand what these problems actually are it’s interesting to do a found you got by focus on problems as I do at the beginning I I walk can get 25 different problems out up on the board or or posted notes around and when people look at that because they haven’t ever done this before when they see the 25 different problems or challenges they realize you can’t do them all and so they begin to get this sense oh geez we better focus we better focus on something we better do something about some of these and so then we begin to you know go through this thing which ones are really important and which ones are really addressable well sometimes we don’t know if they’re cust or not oh well is there anybody in the organization who does know is there someone we can fly in here who has some perspective on this how do we you know so we begin to try to identify you know the one or two key challenges that can actually be addressed and what are we going to do about it what are the coar actions we are to to to take these off that’s the exercise uh it’s from time to time after the founders I’ll say to me well where’s the strategy where’s the document with the Mission Vision that no that’s not what we do we’re doing an action agenda and uh The Foundry is is it’s time consuming and a bit expensive to some extent but in in most of the times we’ve had fies they they really help the company all gather its wits and its resources and do something which you know I’m very pleased with how the foundaries work it’s not so easy to figure out how to take The Foundry concept and expand it I’ve talked to a couple consulting firms about well guys like to how to do foundaries and they say how does it work it’s one guy for three days that’s that’s not what we do we do 10 guys for two years it’s not a business model uh but that’s a nice symmetry for me because yeah they’re not going to compete with me I love that I feel like you’re about to get a flood of interest and requests for everyone else make sure to buy Richard’s books I got them right here the cors good strategy bad strategy Richard again thank you so much for being here Lenny thank you for a really Pleasant time CH it was 1,000% my pleasure bye everyone thank you so much for listening if you found this valuable you can subscribe to the show on Apple podcast Spotify or your favorite podcast app also please consider giving us a rating or leaving a review as that really helps other listeners find the podcast you can find all past episodes or learn more about the show at Lenny podcast.com see you in the next episode