What I Didn’t Learn in Business School – Jay Barney, Trish Gorman Clifford | Free Book Summary

What I Didn’t Learn in Business School – Jay Barney, Trish Gorman Clifford

All of the theories, frameworks, and tactics you learn in business school have their limitations. This is a book about how strategic decisions are made in the real world.

How Strategy Works: Key Points

• Different assumptions lead to different outcomes. The real question is, where do those differences come from in the first place?
• Know who the critical stakeholders are.
• Know who can implement the recommendations and, even more importantly, who can stop them from being implemented.
• Have a good sense of the political landscape long before you make your final presentation. 
• Use both analysis and change management to transform those likely to resist your recommendations into supporters.
• Even sophisticated financial analysis can be easily swayed by individual biases or corporate politics.

The Five Forces Framework

The five forces framework does a great job of helping to identify the competitive threats in an industry. But using this tool to estimate the overall attractiveness of an industry is usually not that helpful.

The five forces are kind of like the wind, the direction that competition within an industry is moving. Strategy is about positioning the firm relative to the prevailing winds and a way to make sure that the firm gets to where wants to go, no matter what direction the wind is blowing

The Five Forces Model

The Five Forces model is widely used to analyze the industry structure of a company as well as its corporate strategy. Porter identified five undeniable forces that play a part in shaping every market and industry in the world, with some caveats. 

The five forces are frequently used to measure the intensity, attractiveness, and profitability of competition in an industry or market.

Porter’s five forces are:

1. Competition in the industry

2. Potential of new entrants into the industry

3. Power of suppliers

4. Power of customers

5. Threat of substitute products

Gaining Synergies

Three things to think about when considering cooperating with other businesses within a firm to gain synergies:

• Will it be good for business? 
• Will it increase revenue or cut costs?
• Could we achieve cost or quality advantages on our own without cooperation?
• Could we realize these advantages by working with an outside provider?

The vrio framework to put a strategy value to the test

Is the strategy valuable? Does it increase a firm’s revenues or reduce its costs compared to not pursuing the strategy?

Rarity: Does a firm possess unusual skills or other assets that the strategy would utilize?

Imitate: How long will it take other firms to imitate your strategy?  

Organization: Is a firm organized to execute and protect its sources of advantage?

Taking An Interview: Strategy Points

Have a list of questions prepared before you enter your interview.

Make it clear that you need to work through your protocol (list of questions) and then just keep going back to it.  

A brief bio and engagement summary prepared in advance will help interviews go better.

Always ask for the names of other people you should follow up with after the interview is over.

Always ask for more information sources when you send a thank you note to the people you interview.

Core Competencies

Core competencies are activities in the value chain that create economic value, are rare among a firm’s competitors, and that competitors find difficult to imitate.

Technologies by themselves are not core competencies. But the actions firms take to exploit these technologies can be core competencies. And they can sometimes be a source of sustained advantage.

Imitating A Strategy

There are a number of reasons why it may be difficult for one firm to imitate the strategy of another:

• Team-based skills
• Legal restrictions on imitation
• Reputation or brand
• Switching costs
• Search costs
• Application experience

The value of a consultant

• Ability to evaluate business alternatives independently and subjectively
• Working with a team of extremely smart people who can get access to a great deal of good information
• The time to focus on the future of the company rather than being caught up in the day-to-day responsibilities of running it
• Be well rounded but figure out where your unique area of strength is.  

Tips for your career

• Be aware of the politics of the situation and work them into your strategy.
• Preview leaders ahead of time. No surprises.
• Try to anticipate questions members of the top management team might have about your process or your recommendations.
• Keep key players and clients informed of progress.
• Always address the group, not the screen when giving presentations.