0316172324_01_lzzzzzzz.jpg0316172324_01_lzzzzzzz.jpg0316172324_01_lzzzzzzz.jpgBlink: The Power of Thinking Without Thinking is a 2005 book by Malcolm Gladwell in which he explores the power of the trained mind to make split second decisions, the ability to think without thinking, or in other words using instinct.

What is « tipping point »: the moment when an idea, product or concept suddenly catches fire with the population at large.

Gladwell maintains that we « blink » when we think without thinking. We do that by « thin-slicing, » using limited information to come to our conclusion.

In what Gladwell contends is an age of information overload, he finds that experts often make better decisions with snap judgments than we do with volumes of analysis.

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Imagine a cage containing five monkeys. Inside the cage, hang a banana on a string and place a set of stairs under it. Before long, a monkey will go to the stairs and start to climb toward the banana. As soon as he touches the stair, spray all the monkeys with ice-cold water. After a while, another monkey makes an attempt with the same result — all the monkeys are sprayed with icecold water. Pretty soon, when another monkey tries to climb the stairs, the other monkeys will try to prevent it.

Now, turn off the cold water. Remove one monkey from the cage and replace it with a new one. The new monkey sees the banana and will want to climb the stairs. To his surprise, all of the other monkeys attack him. After another attempt and attack, he knows that if he tries to climb the stairs he will be assaulted.

Next, remove another of the original monkeys and replace it with a new one. The newcomer goes to the stairs and is attacked. The previous newcomer takes part in the punishment with enthusiasm. Again, replace a third monkey with a new one. The new one goes to the stairs and is attacked. Two of the four monkeys that beat him have no idea why they were not permitted to climb the stairs, or why they are participating in the beating of the newest monkey.

After replacing the fourth and fifth monkeys with new ones, all the monkeys that have been sprayed with ice-cold water have been replaced. Nevertheless, no monkey ever again approaches the stairs. Why not? Because as far as they know, that’s the way it’s always been done around here.

Don’t be a monkey. Challenge all assumptions.

 

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A great story from the book Thinkertoys written by Michael Michalko

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I chose to pick up this example on reversing a challenge from the great book ThinkerToys, a bible for any persons looking for improving their creative abilities or any entrepreneurs looking for new opportunities. I really enjoy reading and exercising with this book written by Michael Michalko.

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To reverse a challenge:
1. State your challenge
2. List your assumptions
3. Challenge your fundamental assumptions
4. Reverse each assumptions. Write down the opposite of each one
5. Record differing viewpoints that might prove useful to you
6. Ask yourself how to accomplish each reversal. List as many useful points and ideas as you can

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Strategic principle: a memorable and actionable phrase that distills the company’s corporate strategy into its unique essence and communicates it throughout the organization.

i.e.: AOL, Consumer connectivity first – anytime, anywhere
       eBay, Focus on trading communities
       GE, Be number one or two in every industry in which we compete, or get out

A mission statement informs a company’s culture. A strategic principle drives a company’s strategy. A mission statement is aspirational: it gives people something to strive for. A strategic principle is action oriented: it enables people to do something now. A mission statement is meant to inspire frontline workers. A strategic principle enables them to act quickly by giving them explicit guidance to make strategically consistent choices.

Defining attributes of a strategic principle:

  • It should tell a company what to do, ust as important, what not to do.
  • It forces trade-offs between competing resource demands
  • It tests the strategic soundness of a particular action
  • It sets clear boundaries within which employees must operate while granting them freedom to experiment within those constraints

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Red oceans represent all the industries in existence today – the known market space. In red oceans, industry boundaries are defined and accepted, and the competitive rules of the game are well understood.

In Blue Ocean, demand is created rather than fought over. There is ample opportunity for growth that is both profitable and rapid. Blue ocean is about doing business where there is no competitor.

  • Create uncontested market space
  • Make the competition irrelevant
  • Create and capture new demand
  • Break the value/cost trade-off
  • Align the whole system of a company’s activities in pursuit of differentiation and low cost

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This post is based on the article Blue Ocean Strategy, written by W. Chan Kim and Renee Mauborgne, published in the HBR of October 2004
 

judo300x4001.jpg          Judo Strategy

In the martial art of judo, a combatant uses the weight and the strength of his opponent to his own advantage rather than opposing blow directly to blow. Similarly smart internet companies aim to turn their opponent’s resources, strength and size against them.

Judo strategy is based on 3 elements: rapid movement, flexibility, and leverage.

  • Rapid movement requires judo players to move rapidly to new markets and uncontested ground, thus avoiding head-to-head combat.
    • Move to new products that redefine the competitive space
    • Move to new pricing models that competitors are  unable to emulate
    • Move to new testing and distribution models that avoid competitor’s strengths
  • Flexibility demands that players give way to superior force when squarely attacked.
    • Avoid sumo matches, unless you’re bigger and stronger than your opponent
    • Embrace and extend rival’s smart moves
    • Mesh flexibility and tactical adjustments with long-term strategic plans
  • Leverage calls for players to use the weight and strength of opponents against them.
    • Turn your opponent’s strategic commitments and investments to your advantage
    • Cooperate with others who are threatened by your opponent’s success

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This post is based on the article Judo Strategy: The Competitive Dynamics of Internet Time, written by David B. Yoffie and Michael A. Cusumano, published in the HBR of January/February 1999

zito_curveball.jpg     Curveball – Strategies to fool the competition

An effective curve will get rivals to:

  • Do something dumb that they otherwise wouldn’t have
  • Not do something smart that they otherwise would have

4 types of curveball:

  • Draw your rival out of the profit zone: lure competitors into disadvantageous areas – for example, by competing for, but intentionally failing to win, the business of less profitable customers
  • Employ unfamiliar techniques: knock rivals off balance by importing a technique used in another industry – for example, employing the retailer’s hard sell in the stodgy world of retail financial services.
  • Disguise your success: veil your success by achieving an advantage through unlikely means – for example, generating product sales through your service operations.
  • Let rivals misinterpret your success: allow rivals to act on a conventional but incomplete explanation for your success – for example, squeezing costs rather than aggressively utilizing assets.

Where curveballs come from:

  • Making marginal customers seem attractive
  • Importing best practices
  • Stealth sales
  • Extreme asset utilization

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This post is based on the article Curveball: Strategies to Fool the Competition, written by George Stalk, Jr., published in the HBR of September 2006

hardball1.jpg      Hardball:   5 Strategies for Trouncing the Competition

The manifesto:

  • Focus relentlessly on competitive advantage
    i.e.: Wal-Mart and its logistics (network of “cross-docking” warehouses)
  • Strive for “extreme” competitive advantage
    i.e.: Toyota’s production system
  • Avoid attacking directly
    i.e.: Southwest and its choice of letting the hubs to the major airlines
  • Exploit people’s will to win
    i.e.: Southwest had the mantra: “we came, we saw, we kicked tail”, hardball players must be action-oriented, to avoid complacency, you need to foster a sense of urgency
  • Know the caution zone
    Guidelines: does it break any law? Is the action good for customers? Will competitors be directly hurt by it? Will the action touch a nerve in special-interest groups?

The strategy:

  • Desperate rival’s profit sanctuaries
    Parts of a business where a company makes the most money
    Knowledge is key
  • Plagiarize with pride
    Hardball plagiarism involves much more than appropriating a good idea. You have to improve on it.
  • Deceive the competition
  • Unleash massive and overwhelming force
  • Raise the competitor’s costs
    If you have a superior understanding of your costs, you can use pricing to maneuver your competitors into believing that they are making profitable moves

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This post is based on the article Hard Ball, written by George Stalk, Jr., and Rob Lachenauer, published on the Harvard Business Review

  1. Win all without fighting
    Capturing your market without destroying it
  2. Avoid Strength/Attack Weakness
    Striking where they least expect it
  3. Deception and foreknowledge
    Maximizing the power of market information
  4. Speed and preparation
    Moving swiftly to overcome your competitors
  5. Shape your opponent
    Employing strategy to master the competition
  6. Character-based leadership
    Providing effective leadership in turbulent time

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Principles of Defensive Warfare

  • No. 1 Only the market leader should consider playing defense
  • No. 2 The best defensive strategy is the courage to attack yourself
  • No. 3 Strong competitive moves should always be blocked

Principles of Offensive Warfare

  • No. 1 The main consideration is the strength of the leader’s position
  • No. 2 Find a weakness in the leader’s strength and attack at that point
  • No. 3 Launch the attack on as narrow a front as possible

Principles of Flanking Warfare

  • No. 1 A good flanking move must be made into an uncontested area
    • You don’t drop your paratroops on top of the enemy’s machine-gun positions, and you don’t launch a flanking product into the teeth of an established product.
    • A flanking move does not necessarily require a new product unlike anything now on the market. But there must be some element of newness or exclusivity. The prospect must put you into a new category.
    • Traditional marketing theory might call this approach segmentation, the search for segments or niches.
    • To launch a true flanking attack, you must be the first to occupy the segment.
  • No. 2 Tactical surprise ought to be an important element of the plan
    • By its nature, a flanking attack is a surprise attack.
    • Base the strategy on what the enemy is able to do, not on what he is likely to do.
  • No. 3 The pursuit is just as critical as the attack itself
    • Reinforce success, abandon failure
    • Typical flanking moves: flanking with low price, flanking with high price, flanking with small size, flanking with large size, flanking with distribution, flanking with product form, flanking with lower calories, …
    • Keep the forces concentrated in an overpowering mass

Principles of guerilla warfare

  • No. 1 Find a segment of the market small enough to defend
  • No. 2 No matter how successful you become, never act like the leader
  • No. 3 Be prepared to bug out at a moment’s notice

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Based on the book Marketing Warfare, written by Al Ries and Jack Trout, a very exciting book on Marketing. I trully recommand it!