Virginia Postrel recently talked to Richard P. Rumelt, author of Good Strategy/Bad Strategy and a professor at UCLA’s Anderson School of Management, about GM’s desire to be more like Apple, a sentiment that’s hardly unique among managers of the world’s big consumer brands.
According to the good professor, Apple’s magic isn’t magic at all, rather Apple is a showcase for perfectly conceived and executed business strategy.
Strategy is not what many people think it is. It is not a fill-in-the-blanks mission statement blathering about how XYZ Corp. will ethically serve its stakeholders by implementing best-in-class integrated sustainable practices to grow as a global leader while maximizing shareholder value. Such bafflegab is “Dilbert“-fodder that generates cynicism and contempt.
A strategy is not a goal like maximizing shareholder value or keeping America safe from terrorism. It’s not even a plan. It is a design — a coherent approach to defining and solving a particular problem, in which the different elements have to work together.
A strategy “is a way around the obstacles or problems in a difficult situation,” says Rumelt. And every good strategy has a diagnosis of the challenge, a guiding policy for dealing with that challenge and a set of coherent actions to carry out that policy.
Apple’s challenge in 1997 when Steve Jobs returned to the helm: the company was hemorrhaging cash and its product lineup was too diverse, confusing and expensive. In response, Rumelt explains, Jobs “redesigned the whole business logic around a simplified product line sold through a limited set of outlets.”
Apple also didn’t bother wasting too much effort on toppling Microsoft’s hold on the market for PCs. Instead, Jobs and company were ready and waiting for the “next big thing” to come around, and when the iPod was born, it did. Now, Apple is more than a hardware or software company, it’s an entertainment company.
Postrel concludes with a strong call to action: “if you really want to be like Apple, drop the fluff-filled vision statements and magical wishes. Pretend your company’s existence is at stake, coldly evaluate the environment, and make choices.”
For GM, there’s no need to pretend — the company’s existence is at stake. But have Detroit’s top dogs coldly evaluated their environment and made touch choices? I guess we will see. In the meantime, all our of companies, and client companies, can benefit from a tightly defined strategy. How’s yours looking?
Previously on AdPulp: Strategy Was His Strength, Not Disaster
