Strategy rules: Five key lessons from tech titans

You don’t have to be in tech to think like the industry’s greats

Focus on platforms rather than products and be smart about risk.

There's no shortage of advice on how to run a business like Steve Jobs. Anecdotes abound about how the titans of tech have designed products, managed people, and charted their companies’ growth, but it can be hard to distil practical lessons from them. A new book by management experts David Yoffie and Michael Cusumano might help. Strategy Rules turns the experiences of Microsoft’s Bill Gates, Apple’s Jobs, and Intel’s Andy Grove into five simple strategy lessons.

LOOK FORWARD, REASON BACK

Despite the tech industry’s diversity, all its big players have something in common. Yoffie and Cusumano say that successful tech executives first “look forward” to spot industry shifts quite early, and then “reason back” to work out the steps necessary to take advantage of them.
While the stories of Gates and Jobs might be better known, they cite Intel’s former chief executive Andy Grove. He anticipated higher demand for computing power and insisted on developing efficient processes for creating more powerful microprocessors, which became the defining element in Intel’s growth strategy.

BUILD PLATFORMS AND ECOSYSTEMS

The most successful industry leaders have also elected not to focus on specific products but rather on developing platforms, the authors say.
Take the example of Apple: its business model is not just about its individual products, but the ecosystem behind them. This includes Apple’s operating system, services like iTunes and iCloud, and access to many others through the app store. At the same time, it’s easier for the company to bring a new product to customers already using this platform.

MAKE BIG BETS WITHOUT BETTING THE COMPANY

It sounds deceptively simple, but getting tough choices right takes both expertise and a strong gut. Gates, for example, was confident enough to bet aggressively on the development of new operating systems, which eventually paid off. But he wasn’t doing it recklessly, as profits from Word, Excel and other Office products helped cushion the transition from older operating systems.

EXPLOIT LEVERAGE AND POWER

Successful leaders are also master tacticians who can leverage their strengths, Yoffie and Cusumano say. Take the example of the iPhone. Other manufacturers dominated the market, producing cheap, but user-unfriendly, models for millions of consumers. Apple used this to its advantage, releasing a more expensive but more usable smartphone.

SHAPE THE COMPANY AROUND YOUR “PERSONAL ANCHOR”

The values and vision embodied by Gates, Grove, and Jobs guided their organisations’ daily routines. Gates shaped Microsoft around his understanding of software technology, while Jobs molded Apple around his obsession with elegant and simple design, they say. But as both of their companies also show, over-dependence on a single person can also constrain an organisation’s ability to adapt or change course.

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