Fad-Free Strategy provides a ground-breaking approach to making better business strategy decisions: more efficient, open to out-of-the-box opportunities and evidence-based. Most strategy books focus on Grand Strategy, the process that leads to high-level recommendations or, more accurately, hypotheses about where and how to compete. While this book briefly covers critical Grand Strategy practices, it deep dives into Operational Strategy, the process of validation, adaptation and possible rejection of those hypotheses.
Operational Strategy is based on an in-depth understanding of customer preferences and anticipating the choices they make. Those choices rather than managers’ ambitions determine whether a strategy will generate the aspired financial results. The book explains, by means of detailed real-world cases across industries, how to generate validated solutions to any strategic problem such as: how to enter successfully into new markets, either as an innovator or as a latecomer? How to defend one’s position against aggressive new entrants? Or how to sustain margins when price is the only thing customers seem to care about?
This remarkable book contains expert advice from accomplished strategic advisors and thought leaders Daniel Deneffe and Herman Vantrappen. Fad Free Strategy will be a useful tool for smart business executives at mainstream companies who are disappointed with strategy fads and simplistic solutions based on cherry-picked, anecdotal evidence from today’s hero companies. It will also appeal to economics faculty members teaching graduate courses in business strategy who are looking for an economics-based strategy textbook that is both rigorous and comprehensive. The book’s core ideas have been taught successfully in continuing and executive education programs at Harvard University and Hult International Business School.
Table of Contents
List of figures, List of tables, List of boxes, Acknowledgments, About the authors, PART ONE: FROM GRAND STRATEGY TO OPERATIONAL STRATEGY, Chapter 1: The promises of a categorically different book on real-world business strategy, Promise #1: A practical action-oriented approach, based upon doing rather than observing, Promise #2: A generalizable rather than an anecdotal hero-based approach, Promise #3: A totally customerS-centric approach, Promise #4: An evidence-based realistic managerial economics approach, Promise #5: A focus on common principles rather than common truths, Promise #6: A totally open and transparent posture, Structure of the book, Notes, Chapter 2: Grand Strategy as a lead-in to Operational Strategy, The meaning of Grand Strategy, Grand Strategy and Operational Strategy as an end-to-end process, Good practice for the Grand Strategy design process, The merits of Grand Strategy, The payroll services case example, Conclusions, Notes, Chapter 3: The foundations of Operational Strategy, Types of Grand Strategy outcomes to be tested in Operational Strategy, Behavioral assumptions when testing Grand Strategy outcomes, The core concepts of willingness-to-pay and willingness-to-buy, The industrial pump case example, Conclusions, Notes, PART TWO: APPLICATIONS OF OPERATIONAL STRATEGY, Chapter 4: Operationalizing a new market entry strategy, Step 1. Define objectives sensibly and constraints exhaustively, Step 2. Estimate the size of the potential market, Step 3. Estimate the size of the accessible market, Step 4. Define the strategic positioning options, Step 5. Estimate the impact of the options on individual customer choices, Step 6. Derive the impact of the options on aggregate customer choices, Step 7. Derive the impact of competitor responses, Step 8. Select the option with the highest impact on company objectives, Conclusions, Notes, Chapter 5: Operationalizing a defense strategy against a new entrant, The limits of the traditional defense strategy logic, A defense strategy framework based on behavioral logic, The telecommunications case as an example of a "differentiation" defense strategy, The cement case as an example of a "fighting brand" defense strategy, Conclusions, Notes, Chapter 6: Operationalizing a strategy when having zero competitive advantage, Cost cutting and value pricing, A framework for margin improvement in B2B markets, A framework for margin improvement in B2C markets, Conclusions, Notes, Chapter 7: The real-world way forward, No walk-in-the-park, Ideology is of little practical use, Rethink market segments, The end of the average, It’s all in the product, Deal value is the single most important notion, Operational Strategy and Grand Strategy go hand-in-hand, Notes, Index
Daniel Deneffe is the Managing Director of Deneffe Consulting and a former Partner at Arthur D. Little. He is also a Professor of Strategy and Managerial Economics at Hult International Business School and teaches Business Strategy in the Real World at Harvard University’s Division of Continuing Education.
Herman Vantrappen is the Managing Director of Akordeon, a strategic advisory firm. A former partner at Arthur D. Little, he has published numerous articles in a variety of journals, including Long Range Planning, MIT Sloan Management Review, Strategy & Leadership and Harvard Business Review.
‘An illuminating book that reaches beyond unrepresentative examples and management fads to take a nitty-gritty perspective on value-driven strategy.’ - Pankaj Ghemawat, Global Professor of Management and Strategy at the NYU Stern School of Business, and Professor of Strategic Management at IESE Business School
‘By applying the evidence-based principles proposed by Fad-Free Strategy, Deneffe and Vantrappen enable managers to get a much better grip on customers’ true preferences, including those for sustainable offerings, and on their attitudes towards the businesses supplying those. That understanding is critical for making strategic choices from which both business and society benefit. A must-read book for leaders of the future!’ - Paul Polman, former Chief Executive Officer, Unilever
‘Building from one of the best summaries and critiques of classic strategy, Fad-Free Strategy goes beneath the covers and into the pragmatic detail of developing customer-driven approaches that will be valuable to all intelligent managers.’ - David J. Collis, Thomas Henry Carroll Ford Foundation Adjunct Professor of Business Administration, Strategy unit, Harvard Business School
‘Fad-Free Strategy is a refreshing real-world approach to strategy that every smart manager must be craving for. It explains by means of real case examples how to translate an overall vision and ambition into specific customer-driven decisions. If you want to be more confident with the tough choices you make, this book is a must-read.’ - Hubertus M. Mühlhäuser, Chief Executive Officer, CNH Industrial
‘This book shows — in line with its authors’ no-nonsense attitude — how to take strategy from big ideas to very practical questions and evidence-based assessments, which is critical to ensure a strategy's successful implementation.’ - Eric J. Van den Steen, Royal Little Professor of Business Administration, Strategy unit, Harvard Business School
‘Fad-Free Strategy debunks the many myths about business strategy that managers have adopted. The book offers a highly credible customer-centric alternative.’ - Marc Grynberg, Chief Executive Officer, Umicore
‘Applied economics at its best! This book establishes that ‘rigorous’ and ‘applied’ are not two contradictory terms when it comes to business strategy.’ - James J. Anton, Wesley A. Magat Professor of Economics, Duke University, The Fuqua School of Business
‘Fad-Free Strategy is a surprisingly refreshing read, even for hands-on decision makers. Whilst others are either solely academic or merely focus on explaining some famous anecdotal examples from the business world, this book offers much more – a crystal clear content with evidence-based validation and pragmatic tools with a credible approach to real business challenges.’ - Jochen A. Haug, Member of the Board of Management, Allianz Insurance Germany
‘Demystifying management fads, the authors show in a practical manner how to mitigate risks when building and implementing customer-centric and value-driven strategies. A highly recommended reading.’ - André Salles, General Manager, Lactalis Do Brazil