Chapter 4: Why the Tools Don’t Work

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Chapter 4 argues that if we are to get better methods for strategy, it might help to know why the methods we have don’t work – a story that is actually quite simple. First, research asked the wrong question – what determines profitability (return on invested capital or similar), but we know investor value comes from growing cash flow. Research also looked in the wrong places for the answer – first, industry conditions and then weird features of businesses that are meaningless to management. Lastly, ...

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Chapter 3: Tools, What Tools?

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Chapter 3 takes an axe to the tools of strategy that pass as ‘method’ in our profession – most are neither reliable nor useful, so it is hardly management’s fault that they don’t bother to learn or apply them. We have check-lists of reminders, lists of options you are supposed to choose between (often based on false distinctions), magic bullets, two-by-two grids, and “frameworks” of words-and-arrows.

Most of these are not usable, either because we can’t agree on what the ...

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