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Thursday, October 6, 2011

Good Strategy-Bad Strategy: Post #10--Sources of Power

Sources of Power. Good strategy requires leaders to apply a variety of sources of power to any situation to make it happen. Coherent action comes from focused energy or power. Here are just several he mentions:
a. Leverage: Such power comes from anticipating and having insights into what’s most critical to a situation and then applying (leveraging) concentrated energy to it. Such insight into critical issues comes from practice and disciplined determination. Nothing is intuitive the first time you do it!
b. Proximate Objectives: Every parent knows the advantage of proximate objectives. By setting out achievable objectives, you can get kids from here to there. Kennedy did it with his audacious goal of putting a man on the moon. To do that, he set up goals to first have unmanned exploration, then larger booster rockets, and so on. One reasonable step at a time works.
c. Competitive Advantage: Rumelt argues: “…you cannot expect to make money—to get wealthier—by simply owning, buying or selling competitive advantage.” His point is that wealth increases when you can increase the advantage or when the demand for the resources underlying it increases. Thus, competitive advantage is dynamic and sometimes ephemeral—just ask Detroit!

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