StrategyBest.com - Our Secret Sauce
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    Welcome to StrategyBest. We aim to serve the practically rigorous strategy professional in the for-profit enterprise. We will do this by integrating what is useful from academia with tried and true practice and emerging best and next practice from the strategy field. And all of this is to help drive results and performance that is the key accountability of the strategy professional.

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Our Secret Sauce

The Content  in this website is backed by a unique aspect and asset that have proven very valuable to our clients:

Our “Secret Sauce” that allows our content to have academic validity and practical usefulness at the same time

Underpinning the Knowledge Taxonomy is a statistical analysis done for  my doctoral dissertation Environment, Strategy and Performance in Two Service Industries, in 1982 and updated continuously since then:

11 “factors” form  4 themes that nest 267 strategy and operations variables that explain increases in firm valuation in the established firm.  These appear to be most of the factors and themes that drive increases in valuation for the Major New Venture Startup as well. These 11 Factors emerged through a statistical technique called  Factor Analysis. This statistical technique  groups similar variables that relate to each other into a unifying factor. Our Secret Sauce thus provides 11 factors and 4 Themes that reside in 267 strategy and operations variables that explain increases or decreases in firm valuation. Each factor has from 16 to 30 separate variables nested within them*. Through my strategy consulting experience over many years, I aligned the 11 factors into 4 themes (Speed, People, Intangible Assets and Recognizing New Opportunities) through repeated observations in many client engagements of what “seemed” to explain reality.

Over the last thirty years in four other large studies, these factors and themes have been remarkably stable, except for a critical change in one Theme. As little as ten years ago, Physical Assets were key for strategy and allowed making “irreversible commitments” as part of staking out a strategic position and helping to drive increases in firm valuation. Now with Dynamic Capabilities emerging as perhaps the most complete and authoritative strategic management framework, Intangible Assets are emerging as those assets that help drive increases in firm valuation. The factors and themes are:

Absence of four “law-like” organizational barriers

Penchant for no bureaucracy

Extreme process and process innovation discipline

Ubiquitous understanding and application of what value means – both financial value and customer value

Personal values that give rise to high performance teams

Processes and personal values that give rise to continuous learning

Ubiquitous understanding that time is the only non-renewable resource

Personal values and track record that supports continuous inquisitiveness and unrest with the status quo

Personal values that give rise to pride in authentic work

Lack of clutter in organizational and personal life

Passion and track record for acquiring and using new explicit and tacit knowledge

Speed

People

Intangible Assets

Recognizing New Opportunities

11 Factors (each with from 16 to 30 separate variables) form 4 Themes

Themes

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*

Lack of clutter in organizational and personal life

Acquiring and using new explicit and tacit knowledge

Speed

People

Intangible Assets

Recognizing New Opportunities

Absence of four “law-like” organizational barriers

Penchant for no bureaucracy

Extreme process and process innovation discipline

Understanding what value means and its application

High performance teams

Continuous learning

Time is the only non-renewable resource

Continuous inquisitiveness and unrest with the status quo

Pride in authentic work

www.strategybest.com

*

This list of 11 factors and 4 themes might surprise you. What would you have said is your list if I asked you? 

What emerges here are candidates for rock bottom root cause Factors and Themes. That is, they lie behind what is more readily observable. They hopefully represent the truth of the matter over differing  contexts and situations. For instance, under People someone might ask where is Requisite Skills for the Job. This is very important but in my experience and research, while there may be a shortage of skills at any one time, this is a fixable problem. Or someone could ask under Recognizing New Opportunities where is the role of raw intellectual horsepower. Having a lot of smart people is good on the face of it, but if they are hampered by organizational processes and have personal issues with procrastination let’s say, very little Recognizing New Opportunities happens. 

So the 11 Factors then are those very deep and difficult to develop or replace attributes of those firms who are increasing their valuation. They have scarcity value and this scarcity value must be cpatured by the firm by virtue of making customer willingness to pay be higher.  And these attributes are very hard for a competitor to copy in the short to mid term, if at all.

Let’s peel the onion one more layer. There is almost nothing “hard” in the Factors. Factor #s 1 and 2 simply take courage to get done and they are a leadership opportunity.  Factor #3 is acquiring process knowledge and then applying it with a vengeance and then constant process innovation. These drive SPEED. Factor #4 is part being educated on what value really is and then living by it. Factor #5 is a values set that has no room for the rank opportunist in the firm and other attributes of a real team player. Factor #6 is investment in a process and a set of values that has a thirst for new learning. These drive PEOPLE. Factor #7 is being educated on the interesting asset of time and then living by it. Factor #8 is a values set with a proven track record of being resilient to constant change. Factor #9 is a values set that abhors shoddy work and that views work as a higher calling. These drive IINTANGIBLE ASSETS. Factor #10 is really a discipline in organizational and personal living that can prioritize effectively and work on the vital few and not trivial many. Clutter kills recognizing new opportunities. Finally Factor #11 is a values set and a track record of acquiring  and using new knowledge. These drive RECOGNIZING NEW OPPORTUNITIES.

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*

Consider the words I bolded: courage, leadership, knowledge and its application, living by, values set, educated, proven track record, discipline, prioritization.

Where do all of these values, propensity for courage and positive attributes come from? I am not a psychologist so I cannot really say. But I have some hypothesis and if these 11 Factors and 4 Themes resonate with your experience I bet you do too.

It is fascinating to me that such a “hard” and “objective” statistical technique unearthed such “soft” underpinnings of increasing firm valuation.

I know you might be saying this is all a sly trick of too high a level of generalization that can explain anything. How can you say the Boy Scout Oath is not good? But our Secret Sauce in turn infuses StrategyBest’s Knowledge Taxonomy and offerings. You will see in the Business Performance Engine we put all of this to test by making predictions of the timing of events and eventual ripple effects on firm valuation. This is, and will be as we get better through time the “proof in the pudding”.

* The strategy academic and strategy professional familiar with statistical methods and factor analysis in particular may suspect this model may be “over-specified”. That is for statistical significance a sample size must be at least ten times the number of variables measured. If done all at once, this would have necessitated a sample size of 2,670 firms. This indeed has not happened. What I did was to break parts of the model into smaller pieces to have the 10 to 1 ratio hold. Through repeated use though in the field providing face validity of usefulness in over 75 client assignments lasting a year or more, I combined the parts into this whole model depiction. Since it is unlikely that a sample of 2,670 firms will happen, this model will have to serve as a starting point for fundamental discussion and further research.

www.strategybest.com

*

We feel having the content of our website rest on this foundation gives our offerings an authority and “proof statement” that is worthy of your consideration and use of your valuable time. 

As we have mentioned, one of the problems with the six or seven strategy discussion groups on Linked In and elsewhere is contributors are coming from many different contexts, frameworks and  prior training. There is almost no way to have closure on any of the discussions because nearly everyone uses their own personal definitions for many strategy terms and phrases.  So for us they can be a very non-rewarding  and less productive use of valuable time.

And I hate to pick on my academic colleagues but in terms of the total “pounds” of stuff published in strategy, very little is of use to the “practically rigorous” strategy professional who must have knowledge and competencies and be a powerful executive driving results. The academic will immediately label this as my desire to have practical stuff enter their domain, thus diluting their elegance. Nothing is further than the truth. My aim is a philosophy of science that is very much like medicine or law. Which professional in these areas would want to be trained by someone who has no idea what the (strategy professional permit me) existential and ontological realities are? Existential meaning to exist as a professional and ontological what must be known as a professional – together not in isolation. How can a doctor possibly separate what he or she knows with what she or he must do to deliver in a moment to save a life. The swirling milieu of a clock ticking to save a life, with family waiting, with a nurse stressing out, with a lawyer in the next room waiting for a mal-practice suit are the essence also for the “practically rigorous” strategy professional.

Now I know we are asking you to invest the time in our offering to be able to share ideas. You can start off quick and easy with some of our pro-bono diagnostics to see if our offering holds your interest.

Our value proposition is that the foundation aspect above at least gives you one viewpoint from which to understand each other, and have the bases for a productive agreement or dis-agreement and then have consensus learning together. We value the productive use of our time and I do not know of a strategy professional who disagrees with this statement.

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