What I Didn’t Learn in Business School: How Strategy Works in the Real World

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3 Sentence Summary

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. Written as a business novel, you follow protagonist Justin Campbell as he matures in his career, learns from his mistakes, and becomes better at managing the messy human dynamics that come into play during strategic decision-making.

5 Key Takeaways

1. There are always underlining assumptions and biases behind every decision or recommendation.
2. Get to know the political landscape, the key stakeholders, shakers and movers.
3. Don’t rely too heavily on analytical tools or frameworks when assessing complex problems.
4. You will never have perfect information.
5. Communicate so that there are no surprises. Keep key people informed of progress.

What I Didn’t Learn in Business School Summary

Chapter 1

• 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 important, 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.

Chapter 2

• Even sophisticated financial analysis can be easily swayed by individual biases or corporate politics.

Chapter 3

• 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.
• No matter which way the wind blows a sailboat can always get to where it wants to go if it has a skilled sailor at the helm. 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
• Some of the most successful firms in the world are successful precisely because they have figured out how to use very unfavorable industry winds – high rivalry, high threat of entry, and so forth – to their advantage.
• Keep in mind whenever you see someone apply one of these analytical tools, whether it’s the five forces framework or net present value analysis or whatever, they are just tools. It’s the skills, interests, and motives of the person using the tool that determine whether the outcome of the analysis is reasonable.
• When managers present a point of view, assume their point of view reflects some combination of how things actually are and how they want things to be.
• Many managers do an analysis to reaffirm what they already believe.

Chapter 4

• Three things to think about when considering cooperating with other businesses within a firm to gain synergies:
  1. Will it be good for business? Will it increase revenue or cut costs?
  2. Could we achieve cost or quality advantages on our own without cooperation?
  3. Could we realize these advantages by working with an outside provider?

Chapter 5

• To evaluate whether or not a strategy is likely to be a source of sustainable competitive advantage, use the VRIO framework.
  • Value: Is the strategy valuable? Does it increase a firm’s revenues or reduce its cost compared to not pursuing the strategy?
  • Rarity: Does a firm possess unusual skills or other assets that the strategy would utilize? If many firms all have the ability to execute the same strategy, then that strategy will probably not be a source of advantage.
  • Imitate: How long will it take other firms to imitate your strategy? Strategies that are hard to imitate – assuming they are also valuable and rare – are more likely to be a source of long-lasting competitive advantages.
  • Organization: Is a firm organized to execute and protect its sources of advantage? Things like a firm’s reporting structure, management controls, and incentives – enables firms to realize the full potential of its strategies.

Chapter 7

• 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. I usually send mine ahead of the interviewee, along with a summary report of what we know and what we need to know.

Chapter 8

• A brief bio and engagement summary prepared in advance will help interviews go better.
• Always ask for names of other people that 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.

Chapter 9

• In the face of imperfect information, it often comes down to a combination of what you know and what you feel.

Chapter 10

• Core competencies are activities in the value chain that create economic value, that are rare among a firm’s competitors, and that competitors find difficult to imitate.
• Technologies by themselves are not core competencies. But actions firms take to exploit these technologies can be core competencies. And they can sometimes be a source of sustained advantage.
• There are a number of reasons why it may be difficult for one firm to imitate the strategy of another, such as…
  • Team-based skills
  • Legal restrictions on imitation
  • Reputation or brand
  • Switching costs
  • Search costs
  • Application experience

Chapter 11

• The value of the consultant is…
  • 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. Every successful consultant I know has a world-class spike of experience in some area.
• Always probe for more. Ask if there is anything else?
• Always reevaluate the plan. Continuously reprioritize your work to focus on where you’ll have the biggest impact
• Group questions logically, rather than make longer and longer lists

Chapter 12

• Just because you can do it, doesn’t mean that you should

Chapter 13

• She has the same energy at the end of the presentation as she did in the beginning.
• Think about how you get people on board. What can you do to turn people around, making them supporters of your recommended strategy?
• Be aware of the politics of the situation and work them into your strategy.
• Preview leaders ahead of time. No surprises.

Chapter 14

• 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.

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