Paul Leinwand, Cesare Mainardi

The identity of a successful company aligns three basic elements: a value proposition (how this company distinguishes itself from others in delivering value to customers); a system of distinctive capabilities that enable the company to deliver on this value proposition; and a chosen portfolio of products and services that all make use of those capabilities.

Paul Leinwand, Cesare Mainardi

When you can’t find a way to translate the strategic into the everyday, you have to rely on your existing functions to achieve your strategic goals. […] You risk becoming a company that perennially promises great things but never seems able to deliver.

Paul Leinwand, Cesare Mainardi

When you don’t commit to an identity, you risk becoming scattered among a variety of objectives. […] You gain a right to play in many markets, but a right to win in none.

Paul Leinwand, Cesare Mainardi

The functional model of organizations is an important reason why so many companies struggle with the gap between strategy and execution. It makes a company good at many things, but great at nothing. When functional boundaries prevail, there is no construct for managing capabilities. It isn’t clear who owns the capabilities, how to track spending on them, or how to connect them to the strategy … [ Read more ]

Creating a Strategy That Works

The most farsighted enterprises have mastered five unconventional practices for building and using distinctive capabilities.

Editor’s Note: Perhaps it’s just me, but these capabilities don’t seem particularly unconventional. They are also like many secrets-to-success studies in that they look good on paper, but offer little in the way of practical recommendations for realizing them. And, you have the ever-present correlation-causation problem. At the least, it … [ Read more ]

Paul Leinwand and Cesare Mainardi

Most companies don’t pass the coherence test because they pay too much attention to external positioning and not enough to internal capabilities. They succumb to intense pressure for top-line growth and chase business in markets where they don’t have the capabilities to sustain success. Their growth emanates not from the core but from the acquisition of apparent “adjacencies” that are often anything but and the … [ Read more ]

Cesare Mainardi

If agility is chasing opportunities presented to you by a chaotic market, then agility is not a recipe for success. It’s a guarantee of incoherence and volatile performance. But if you stay true to your identity, aware of your unique strengths and where your capabilities add the most value over time, then you won’t just be agile. You’ll be “smart agile.” Yours will be a … [ Read more ]

The Coherence Premium

The pressure to grow the top line is so intense that most companies pay too much attention to expansion and not enough to building differentiated capabilities. A few companies start from the opposite direction: they figure out what they’re really good at, then develop those capabilities (three to six at most) until they’re best-in-class and interlocking. For them, strategy becomes a matter of aligning what … [ Read more ]

Cesare R. Mainardi

Henry Ford invented the high-volume auto business when he saw how cattle moved from butcher to butcher in a slaughterhouse, learned that black paint dries the fastest, read about employee profit sharing from John Stuart Mills, and adopted the Singer Sewing Co.’s dealer franchise model. Look across industries, history, the world, and even non-business domains to spark a creative combination.

The Essential Advantage: How to Win with a Capabilities-Driven Strategy

Conventional wisdom on strategy is no longer a reliable guide. The authors maintain that success in any market accrues to firms with coherence: a tight match between their strategic direction and the capabilities that make them unique.

Achieving this clarity takes a sharpness of focus that only exceptional companies have mastered. This book helps you identify your firm’s blend of strategic direction and distinctive capabilities that … [ Read more ]

The Capabilities Premium in M&A

A new study of inorganic growth shows that deals made to enhance or leverage the things that companies do well consistently outperform others.

The Right to Win

Business strategy is at an evolutionary crossroads. It’s time to resolve the long-standing tension between the inherent identity of your organization and the fleeting nature of your competitive advantage.

Cesare Mainardi with Art Kleiner

The yin and yang of strategic fad and fashion — the movement of business leadership from one trend to another over the past 50 years — has often led companies to make incoherent and ineffective moves. The answer is not to keep adopting new theories in hopes of finding the right answer, but to develop your own capabilities-driven strategy: your own theory of coherence for … [ Read more ]

Cesare Mainardi with Art Kleiner

Despite their differences, all four schools of strategy represent attempts to resolve the same basic underlying problem: the tension between two conflicting business realities.

The first reality is that advantage is transient. Even the most formidable market position can be vulnerable to technological disruptions, upstart competition, shifting capital flows, new regulatory regimes, political changes, and other facets of a chaotic and unpredictable business environment.

One might assume … [ Read more ]

Cesare Mainardi with Art Kleiner

The experience curve and growth-share matrix rapidly became popular because they worked powerfully well — at first. But in practice, these tools had a serious flaw: As retroactive analyses of a company’s past success, they made it irresistible to continue that same behavior into the future, even when circumstances changed.

Cut Costs, Grow Stronger

To reduce expenses for the long term and lead the way to recovery, start by taking a strategic view of your company’s capabilities. In the economic crisis, many companies defaulted to standard downturn defenses such as across-the-board cost cutting and layoffs. These responses weaken companies as they shrink. Here is a way to make your company leaner and more resilient now, and more robust as … [ Read more ]

Reinventing Scale: How to Escape the Size Trap

Value chain mapping can find hidden value in even the oldest industries.