The Best Business Strategy Books for Driving Growth
I love ideas and the potential of change to move individuals, teams, and organizations forward. And I love the 'yes'. The alignment on a bold strategy and then pushing it through to execution to deliver results. I’ll get out of bed every day for that. What it turns out that I am not as good at is the 'no'. All the other things that you need to stop or sacrifice to ensure you have the right focus and resources against the initiatives that will truly add value without clutter and distraction. This has been one of my most powerful lessons through Covid-19.
At Longo’s, we were already 2 years into a full business transformation when the pandemic hit, so we had the benefit of 65 years of heritage, culture, and values that had been reimagined to create a shared vision for the next generation of shoppers. That gave us the freedom to decentralize and accelerate our response with the confidence of knowing it would be seamlessly integrated and aligned with our purpose, our Team Members, and our Guests. But what was unique was that the strategy was paired with the most ruthless and focused prioritization I have ever experienced in a business. We all knew exactly what was important and we executed with incredible speed and unity across the organization. The clutter disappeared, and even in a highly entrepreneurial culture, the nos became easy. It was liberating. And we’ve seen the impact based on the positive feedback from our Guests and Team Members, even during this difficult time in our history. So how do we keep that ruthless prioritization as we begin to transition into the new normal ahead?
I wanted to share some of the books and articles that are inspiring me through this journey as I look to pair big yesses with even more nos.
I'd welcome any other suggestions or recommendations!
Start with Why: How Great Leaders Inspire Everyone to Take Action by Simon Sinek, 2009
No Purpose, No Passion, No Profit. If your business and relationships are solely based on rational, transactional features and benefits, you will always be reduced to an undifferentiated commodity that relies on incentives versus inspiration to drive engagement. Team Members aren’t ultimately engaged by paychecks nor are consumers inspired by price-points and sales. A viable business must be built around a bigger, motivating purpose and this book, albeit a bit bloated in sections, is a good reminder of why.
Good To Great: Why Some Companies Make the Leap and Others Don't Jim Collins, 2001
20 years in and this classic by Jim Collins still stands the test of time. Get the right people on your team, look for humble yet hungry leaders that elevate all those around them versus themselves, define your strategy in a simple yet powerful way where your passion, best-in-class ability, and economic engine align and then execute like hell. I enjoyed the reminder that great companies often exist in industries that one wouldn’t typically expect to create exceptional value and returns and that transformations take time to pay dividends through consistency, coherence, and relentlessness. It’s not as flashy as today’s start-up culture, but I believe it remains as relevant. This book was also my introduction to the value flywheel, a term that’s been highly popularized with the latest generation of digitally-driven brands. At Longo’s, we talk a lot about our flywheel that’s built around a growing community of like-minded, food-involved Guests and that’s fuelled with relevant and engaging content, products, and services that are inspired by increasingly insightful data. All of which positions us as a more trusted and relied upon food partner for our Guests while driving our growth. I can see the momentum building.
Playing to Win: How Strategy Really Works A.G. Lafley & Roger L. Martin, 2013
A strategy sometimes feels complex, but this book does a great job of debunking the confusion that can creep into strategy discussions, which makes it a great refresher anytime you are heading into a planning session. At its core, the book outlines the strategy process around 5 simple choices, that when answered collectively, drive business success:
• What is your winning aspiration?
• Where will you play?
• How will you win?
• What capabilities must you have in place to win?
• What management systems are required to support your choices?
I feel like there is a lot of focus on the first three big strategic choices, but less so on the capabilities and management systems required to win, which are essential to realizing the value in your strategy. Overall, a great book to review when you feel like your strategy discussions are getting bogged down. Plus who wants to play to lose?
Zero to One - Notes on Start-ups & How to Build the Future by Peter Thiel and Blake Masters, 2014
This book is based on the course notes from Peter Thiel’s Stanford class on start-ups and it includes some inspiring insights that dramatize how to think about creating significant value in a business. It’s all built around answering the question of what company is nobody else building? Peter’s perspective is that the only path to sustainable profit and value creation is to build a monopoly. All successful companies are different, each one earns a monopoly by solving a unique problem. All failed companies are the same, they failed to escape competition. Our obsession with competition causes us to over-emphasize short-term opportunities and slavishly copy what has worked in the past. This distracts us from potentially seeing bigger opportunities where we need to pivot to escape the limitations of our category and emerge in a category of our own. A category of one. The book outlines a four-part framework for building a monopoly:
Proprietary Technology - proprietary technology is the most substantive advantage that a company can have because it makes your product difficult or impossible to replicate. The big challenge is that to be proprietary, it must be 10x better than its closest substitute in the marketplace. Anything less than that would most likely be seen as a marginal improvement and will be hard to sell in a competitive marketplace.
Network Effects - This occurs when a product gets more useful as more people use it, such as with social platforms. In many ways, this is a more modern interpretation of the flywheel originally presented in Good to Great.
Economies of Scale - A monopoly business gets stronger as it gets bigger. Peter believes a good business should have the potential for massive scale built into its first design.
Branding - A company has a monopoly on its brand by definition, so creating a strong brand is a powerful way to claim a monopoly. Apple is probably the best example of this rule.
Peter very much brings a Silicon Valley and software perspective to his vision for start-ups, but it’s a good balance with the insights coming out of more traditional business models. So what company are you building that no one else is?
Post Corona - From Crisis to Opportunity - Scott Galloway, 2020
I am a big fan of the Pivot podcast, so I feel like I am always pretty connected to Scott Galloway’s latest thinking and rants. As a Marketing professor at NYU and entrepreneur, Scott does a great job of packaging up his point of view on the implications of the pandemic on business and where the big opportunities will be for the next 5-10 years. In particular, I find myself referencing the updated version of his T-Algorithm, which he originally published in his first book, The Four. It’s Scott’s list of attributes that he believes give a company a chance for a trillion-dollar valuation and it's a good reference point when you are working through prioritizing where to invest to improve and differentiate your business.
T - Algorithm
Appealing to Human Instinct - as humans, we are hardwired to share a set of biological needs. The most powerful firms have found a way to tap into these needs to differentiate and connect to their customers. To me, this is all about the role of a powerfully defined and expressed purpose behind a brand.
Career Accelerant for Employees - a firm that serves as an incredible springboard for a person's career will always attract the most talented employees, which will further fuel its success.
Margins and Growth - today's most successful companies maintain explosive growth and strong margins, not one at the expense of another. Peloton would be a great recent example, all be it heavily aided by the pandemic.
Recurring Revenue Bundles - aka The Rundle - A lot of successful companies that are driving much higher multiples in their valuations are shifting into offering bundles of goods and services for a recurring fee. Firms that convince consumers to enter into longer-term relationships are better positioned to accumulate more value over time than firms that interact with consumers transactionally.
Network Effects - this is the flywheel again and the ability for a business to increase in value as the number of users also increases. For example, the more people on Spotify equals more data plus more playlists, which improves the experience for users over time.
Vertical Integration - a firm's ability to control the end-to-end customer experience by controlling as much of the value chain as possible. Companies that control distribution tend to reap huge benefits. Apple has played this strategy well with their investment in their store network.
Likability - the ability of a company's leaders to insulate the firm from government and media scrutiny, strike favourable partnerships and attract top talent. Consumers tend to personify brands, and those that can take on more positive characteristics tend to reap outsized benefit. Mark Zuckerberg is the negative example versus Tim Cook of Apple.
Visionary Storytelling - The ability to articulate or demonstrate progress against a bold vision for the company to shareholders and stakeholders. Telling a compelling story unites team members, attracts top talent and funding.
In particular, I enjoyed the renewed emphasis on employees and being a powerful incubator for people’s careers to fuel business success. And of course, the role of the ‘Rundle’ has been transformative for so many businesses and still feels like a big opportunity moving forward. Longo’s is having some fun playing in this space. Finally, with a background in Marketing, I have always been a big believer in powerful storytelling, both within and outside of a business, and that appears to be as important now as ever before to drive business results and valuations.
Have You Tested your Strategy Lately - McKinsey Article, 2011
The last one is a great summary article from McKinsey to ensure your strategy remains crisp and compelling. It covers ten timeless tests that can help you dial-up the level of strategic clarity and dialogue throughout your company. You can access the full article here.
Will your strategy beat the market?
Does your strategy tap a true source of advantage?
Is your strategy granular about where to compete?
Does your strategy put you ahead of trends?
Does your strategy rest on privileged insights?
Does your strategy embrace uncertainty?
Does your strategy balance commitment and flexibility?
Is your strategy contaminated by bias?
Is there conviction to act on your strategy?
Have you translated your strategy into an action plan?
My favourite question is the one around the idea of ‘privileged insights’. We are all drowning in data these days, a lot of which I would argue is dumb data that does little to help dynamically move an organization forward. I'm inspired by the idea of privileged insights and the ability to know things that are unique in the market to enable better decisions. It is the ultimate rallying cry for an insights team and their ability to create sustainable value over time and fuel the benefits of a differentiation strategy. Far too often, we confuse easily accessible and widely known insights as powerful enablers of strategy and tactics, which is just fool's gold.
A great strategy is liberating as it emboldens your ability to say yes with conviction. For me, it is also the exact opposite. I want to get better at saying no because I believe it’s the nos that separate the good from the great.