Simplify Your StrategySummary of : Simple Rules for a Complex World  by Donald Sull and Kathleen M. Eisenhardt        Summ...
Simplify Your Strategy• Simple rules match or beat more complicated analyses• Firms must balance efficiency and flexibilit...
América Latina Logística (ALL)•        Spin off of Brazilian Railway, a struggling bureaucracy•        Only $15 million av...
ALL’s Proposals and Results• Cross-Functional Team Proposals   – Repair decommissioned engines   – Replace broken main lin...
Five Rules for Developing Simple Rules1. Identify a bottleneck that is specific and strategic   – Where are opportunities ...
Keep It Simple• Cap the total number of rules   – Forces teams to prioritize and drop less important rules This is Where S...
Simplify Your Strategy
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Simplify Your Strategy

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A summary of a great Harvard Business Review article Simple Rules for a Complex World by Donald Sull and Kathleen M. Eisenhardt.

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Simplify Your Strategy

  1. 1. Simplify Your StrategySummary of : Simple Rules for a Complex World by Donald Sull and Kathleen M. Eisenhardt Summary by Pete Modigliani
  2. 2. Simplify Your Strategy• Simple rules match or beat more complicated analyses• Firms must balance efficiency and flexibility – Checklists – Perform a process repeatedly and efficiently – Simple rules – Adapt quickly to changing circumstances• Strategies often falter in execution because of insufficient coordination across the organization 2
  3. 3. América Latina Logística (ALL)• Spin off of Brazilian Railway, a struggling bureaucracy• Only $15 million available for capital spending• Managers requested 10 times the funding• Desperately needed upgrades to infrastructure and trainsALL’s Simple Rules For Capital Spending 1. Remove obstacles to growing revenues 2. Minimize up-front expenditure 3. Provide benefits immediately 4. Reuse existing resources 3
  4. 4. ALL’s Proposals and Results• Cross-Functional Team Proposals – Repair decommissioned engines – Replace broken main line tracks from abandoned stations – Increase fuel tank size to add range• Results Within Three Years – 50% Increased Revenues – 3X EBITDA – Latin America’s largest independent logistics company – Latin America’s most extensive rail network 4
  5. 5. Five Rules for Developing Simple Rules1. Identify a bottleneck that is specific and strategic – Where are opportunities > resources? – Relatively narrow, well-defined process, not aspirational – Focus on one or two critical areas with greatest impact2. Let data trump opinion – Analysis of facts more valuable than biased beliefs3. Users make the rules – People who will apply the rules are best able to craft them – Cross-functional teams can sort through tough decisions4. Rules should be concrete – Should be easy to understand, often simple as Yes/No5. Rules should evolve – Simple rules change with company and market conditions 5
  6. 6. Keep It Simple• Cap the total number of rules – Forces teams to prioritize and drop less important rules This is Where Strategies Simple Rules Represent the Go to Die Beating Heart of Strategy 6
  7. 7. Simplify Your Strategy1. Clarify the key drivers behind value creation2. Identify critical challenges3. Determine your must-win battles 7

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