Episode 25

Felix Oberholzer-Gee: Simplifying strategy for the better

Strategy is a mystery to many of us. It’s an over-used, misunderstood term in business. Put simply, a strategy is a plan to create value. Don’t start with profit though. That’s the result of strategy. Instead, use a ‘value stick’ which provides a way of measuring the two fundamental forces that lead to value creation and increased financial success: (1) the customer’s willingness to pay; and (2) the employee’s willingness to sell their services to the business.

Companies that ‘win’, according to Felix Oberholzer-Gee, create value for customers by raising their willingness-to-pay and they provide value for talent by lowering their willingness-to-sell. He describes how to do this in this fascinating discussion, talking about the distinction between the creation and capture of value, the potential of ’near-customers’, strategy in ecosystems, the power of value-maps and the relationship between strategy and culture.

The best bits of these conversations are captured in my newsletter Flashes+Sparks.

Further resources

Felix Oberholzer-Gee is the Andreas Andresen Professor of Business Administration in the Strategy Unit at Harvard Business School. He currently teaches competitive strategy in executive education programs such as the Program for Leadership Development, the Senior Executive Program for China and in a program for media executives titled Effective Strategies for Media Companies. He hosts the HBR After Hours podcast, in which he discusses and debates current events that sit at the crossroads of business and culture with fellow HBS professors Youngme Moon and Mihir Desai.

VIEW RUNNING ORDER

03.37 Definition of strategy.
05.24 Why strategy is a confusing term.
07.56 The importance of differentiation.
09.54 Are we over-emphasising business models?
14.00 Customer delight.
16.26 The relationship between strategy and culture.
19.13 Near customers.
23.15 Value maps.
25.39 Ecosystems.
30.39 Strategy process that works.
34.04 Applying his own framework.

“Select the one or two value drivers where you beat the competition hands down. That’s where the creativity starts.”

Felix Oberholzer-Gee, Professor of Business Administration, Harvard Business School

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Paul Polman: Creating companies that give more than they take

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Jim Detert: Cultivating your courage

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Andrea Olson: Truly understanding your customers

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Jeffrey Shaw: Crafting your best self-employed life

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Chris Rangen: Venturing into the future

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Steve Blank: Reinventing entrepreneurship

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Janice Lintz: Advocating for access

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Roger Martin: Thinking afresh about business

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