A rumelt perspective strategy and smarter conquers better some non-business examples

Strategy: Smarter Conquers Better

By Dr. Michael McDermott

[email protected]

But business success is simply about being

better. Isn’t it?

© Michael McDermott, 2014;

[email protected] 2 1/16/2014

The “Being Better” Argument

• In order to succeed, it’s true you do need to possess at least one advantage:

• Better • Cheaper • Faster • Richer • Stronger

© Michael McDermott, 2014; [email protected] 3 1/16/2014

The “Being Better” Argument

• But simply ‘being better’ provides only short-lived success

• The ‘better’ is based only on operations


Three Questions 1. What biblical story do you most associate with an

underdog defying expectations to beat a more impressive opponent?

2. Who is the greatest boxer of all time, and indeed considered the greatest sportsman of the 20th century?

3. Who are considered the greatest ever football (i.e. soccer) team?

4. Greatest band of all time?



What explains their success?

Their success was based upon Genuine Strategy


Example 1: David vs Goliath

David • Youthful • Inexperienced in hand-to-

hand conflict • Physically weak • No protection

Goliath • Mature • Experienced in hand-to-

hand conflict • Physically strong • Heavily protected


Example 1: David vs Goliath

• If David is to win, he only had one option…and his insight enabled him to identify that fact

• Goliath – classic case of ‘brawn and no brain’


Lessons from David vs Goliath

Smarter can beat better

• Good strategy comes

from fresh insight into strengths and weaknesses, and opportunities and threats


Facing ‘Goliath’

• So developing a strategy to topple the ‘invincible’ is not easy

• Do you try and copy the best – but the core competence of the best is always hard to imitate

• Or do you have to invent a superior solution?


Example 2: Ali vs Foreman World Heavyweight Championship Fight, Zaire, October 1974

© Michael McDermott, 2014; [email protected] 12

The Challenger 32 years of age

The Defending World Champion 25 years of age 1/16/2014

Ali vs Foreman: Comparison Based Upon the ‘Better’ argument

Ali • Former World Champion • Past success was based on

being ‘better’ • Past his peak in terms of

being ‘better’ • 32 years of age • Making a comeback after

years without competitive fights

Foreman • Defending World Champion • Present success was based

on being better • At his peak • 25 years of age • Getting better with each

fight


Who is Going to Win?


What’s Missing?

We have not identified a crucial difference!

Only one boxer had a genuine

strategy © Michael McDermott, 2014;

[email protected] 15 1/16/2014

Ali vs Foreman: Comparison of Strategy


Ali vs Foreman

• Two boxers • One, the defending world champion • The other, the former, older champion • One Common goal • Two Different Strategies

– Ali – Good Strategy – Foreman – Bad Strategy


Ali vs Foreman

Ali Practiced Good Strategy • diagnosed his critical problem • He could no longer “float like a

butterfly, sting like a bee” over 15 rounds against a younger opponent

• So he developed an action plan to overcome his critical weakness

• “Rope-a-dope”

George relied on Bad Strategy • The 3D Effect


Rope a Dope

Ali Wins by a Knockout in Round 8. Foreman had run out of steam.


Ali Interview

• http://youtu.be/AY3yIIxXvy4


http://youtu.be/AY3yIIxXvy4

Two Vital Lessons from Ali vs Foreman

1. Even the very best

are eventually overtaken;

2. If they are to

continue winning, they need genuine

strategy


Lessons from “Rope-a-dope” • Exhaust your rival’s

resources through suckering them into constant expenditure of ineffective yet debilitating effort

• When you look at the market for some products, do we see that the market leader is employing the “rope-a-dope”?


Example 3: Barcelona’s Dominance of World Soccer

• The present Barcelona side, Spanish and

European champions, are considered the greatest team of all time;

• It features Lionel Messi (born 24 June 1987), the World Footballer of the Year (2009, 2010)

• Spain, current European and World Champions, is heavily dependent upon Barca players


Example 3: Barcelona and Spain’s Dominance of World Soccer

This example shows that this success is based upon a genuine strategy that

was developed 40 years ago


Example 3: Barcelona and The Dutch Legacy

• In the early 1970s, Barcelona was managed by Dutch coach, Rinus Michels

• He bought the player Johan Cruyff – ‘the Messi’ of his generation

• Cruyff managed Barcelona in the late 1980s-mid 1990s

• One of his key players was Josep Guardiola, manager of Barcelona since 2008

• Today the present Barca team are hailed as the greatest ever side


Example 3: Barcelona and The Dutch Legacy

• In 1970 Brazil beat Italy 4-1 in the soccer World Cup final in Mexico

• The Brazilian team was considered invincible • The next World Cup was in Germany in 1974 • But how could anyone beat Brazil?


Example 3: The Dutch Influence on Soccer

• Rinus Michels, the coach of the Dutch national team, concluded that no one could match Brazil

• So a radical new approach was required • He invented ‘total football’ • At the heart of this new system was the player

Johan Cruyff


Total Football Defined

• In Total Football, a player who moves out of his position is replaced by another from his team, thus retaining the team's intended organisational structure. In this fluid system, no outfield player is fixed in a nominal role; anyone can be successively an attacker, a midfielder and a defender. The only player fixed in a nominal position is the goalkeeper.


http://en.wikipedia.org/wiki/Attacker

http://en.wikipedia.org/wiki/Midfielder

http://en.wikipedia.org/wiki/Defender_(football)

http://en.wikipedia.org/wiki/Goalkeeper

The Immediate Outcome

• In 1974 Holland beat Brazil but were beaten in the final 2-1 by the host country Germany

• In 1978 Holland was again beaten in the final by the host nation Argentina


Barcelona F.C: The Lasting Legacy

• Michels introduced ‘total football’ to Barcelona

• The commitment to ‘total football’ continued under Cruyff

• Cruyff recognized the exceptional ability required to implement ‘total football’

• He thus established in 1978 “La Masia”, the youth academy to train young players in the system from an early age



• One of the first graduate from ‘‘La Masia” was Guardiola, exceptional player and manager;

• Today’s current midfield of Xavi, Iniesta and Fabregas are all graduates of “La Masia”;

• Messi is also a product of the youth academy



Barcelona F.C. • When Barca won the

European Champions League in 2009, 8 of the 11 players were graduates from the youth system

Spanish National Side • When Spain won the 2010

World Cup the 22 man squad included 8 Barca players and 6 were in the starting 11 for the final


The Lasting Legacy: From Total Football to Tiki-taka

Tiki-taka has been variously described as

• "a style of play based on making your way to the back of the net through short passing and movement"

• a "short passing style in which the ball is worked carefully through various channels, and

• a "short passing, patience and possession".

• The style involves roaming movement and positional interchange amongst midfielders, moving the ball in intricate patterns, and sharp, one or two-touch passing.


The Lasting Legacy: From Total Football to Tiki-taka

• One of the weaknesses of Spanish sides and the national team was that their players were often much smaller and less physical than players from other nations (e.g. Northern Europe, Africa);

• Tiki-taka focuses on movement, possession and skill

• Some of the best players for Barcelona and Spain are physically small


Barcelona and Competitive Advantage

Differentiation • Barcelona competes

through innovation – it has developed a unique style or brand of football

Low Costs • The youth academy enables

Barcelona to produce the world’s best players at low costs;

• This reduces the club’s need to spend in excess of $50m per player


Barcelona and Competitive Advantage

Competition: • competitors have so far failed

to overcome the Barcelona system;

• This is despite the fact that arch-rivals, Real Madrid have:

• acquired the world’s most expensive player ($132m);

• the world’s highest paid soccer manager (about $20m)

Customers: • Barcelona is the world’s

most popular club as its style is uniquely entertaining;

• It has 20m ‘likes’ on facebook, narrowly beating Real Madrid


Barca Has Clear Core Competencies

• “Core competencies are the most significant value creating skills within your corporation and key areas of expertise which are distinctive to your company and critical to the company's long term growth”.

• It can be leveraged widely

• It’s hard for rivals to imitate

• It’s of great value to customers


http://www.1000ventures.com/info/customer_value_tao_brief.html

Multiple Lessons from Barca and its Genuine Strategy

1. It arose from a foreign idea (i.e developed in Holland) 2. It involved honest internal analysis and identification

of weakness; 3. Indeed the essence of the new strategy is to render

weaknesses that cannot be overcome obsolete; 4. It has received constant commitment over 40 years –

even in ‘difficult’ times; 5. It is now delivering the best ever results as the

original business model (i.e. total football) evolved to ‘ticki-tacka’;



6. It is centered upon differentiation (i.e.

innovation);

7. The commitment to innovation compelled a focus upon New Product Development (i.e. the youth academy)



8. New superstar brands (i.e. players) are

developed at low cost and sourced locally and internationally;

9. Costly acquisitions are seldom required – and even when they are they are graduates of La

Masia who were allowed to join other clubs



10.Even when Barca is briefly overtaken by a

‘better’ team, it is without equal strategically, so the strategy is a constant that ultimately prevails

11.Barca may not always win, but its strategy always delivers exceptional value to its growing number of customers globally


Barca vs Real Madrid

Barca • Genuine strategy • Commitment to core values • Consistency • Succession planning • Relies primarily upon

organic growth (i.e. development of players and managers)

• Continuity is key

Real Madrid • Genuine Strategy – or all

about goals; • Lacking core values • Inconsistency • Absence of succession

planning • Relies primarily upon external

growth (i.e. acquisitions of players and managers)

• Change is key


Apple: the corporate Equivalent to Barca

• Apple has a genuine strategy; • At one time it struggled badly yet remained

totally consistent to its strategy; • It seized opportunity (i.e. the iPod) and has

refined its original strategy with each successive product and/or service


Apple: the corporate Equivalent to Barca

• Apple can/should expect to be overtaken briefly in some areas;

• But by applying its genuine strategy it can expect to once again come out tops


Conclusions

1. Strategy is not defining growth objectives

2. Strategy is about problem-solving

3. Strategy demands identification of the key problem

4. Strategy develops a well-conceived action plan to address the problem


Education

A rumelt perspective strategy and smarter conquers better some non-business examples