Better, Simpler Strategy: A Value-Based Guide to Exceptional Performance

by Felix Oberholzer-Gee

Named one of the best strategy books of 2021 by strategy+business Get to better, more effective strategy. In nearly every business segment and corner of the world economy, the most successful companies dramatically outperform their rivals. What is their secret? In Better, Simpler Strategy , Harvard Business School professor Felix Oberholzer-Gee shows how these companies achieve more by doing less. At a time when rapid technological change and global competition conspire to upend traditional ways of doing business, these companies pursue radically simplified strategies. At a time when many managers struggle not to drown in vast seas of projects and initiatives, these businesses follow simple rules that help them select the few ideas that truly make a difference. Better, Simpler Strategy provides readers with a simple tool, the value stick, which every organization can use to make its strategy more effective and easier to execute. Based on proven financial mechanics, the value stick helps executives decide where to focus their attention and how to deepen the competitive advantage of their business. How does the value stick work? It provides a way of measuring the two fundamental forces that lead to value creation and increased financial success—the customer's willingness-to-pay and the employee's willingness-to-sell their services to the business. Companies that win, Oberholzer-Gee shows, create value for customers by raising their willingness-to-pay, and they provide value for talent by lowering their willingness-to-sell. The approach, proven in practice, is entirely data driven and uniquely suited to be cascaded throughout the organization. With many useful visuals and examples across industries and geographies, Better, Simpler Strategy explains how these two key measures enable firms to gauge and improve their strategies and operations. Based on the author's sought-after strategy course, this book is your must-have guide for making better strategic decisions.

Genres: Business, Nonfiction, Management, Leadership, Personal Development, Psychology, Finance

273 pages, Hardcover

Published April 20, 2021

Reviews

[Prabhakar · Rating 3 out of 5]

WTP... The book could have been titled as WTP - Willingness To Pay. This is a very myopic view of the strategy. There is no reference to economy, global forces, disruption, technological changes, geo-politics but just value creation. I think, this was popular in 1970-80s when companies tried to copy best practices of Japanese companies and match up. Too many examples but Apple word comes 66 times and competition word comes 53 times. I am not clear, how the b-schools will add value to the students, if they keep giving example of the best company in the world and time and again, no other company could copy its success.

Strategy execution which is a key to success has not been addressed enough. Drawing map on a sheet of paper doesn't mean till the rubber hits the roads.

Value maps, which were introduced in Blue Ocean Strategy have been harped on.

Again, title attracted me to the book, but it has everything but that. The HBR article on the topic creates enough interest but book does not live up to the expectations.

[Scott Wozniak · Rating 3 out of 5]

This author is a professor at the Harvard Business School and this book feels like that. That's both good and bad, in my opinion. Good in that he has a wide range of examples with real numbers on how much the companies spent on their changes and how much they got in return. Good in that he cuts to the heart of the strategic questions. But it's bad for me in that it feels like an academic paper, not a book for practitioners. The language is very formal, not just using complicated words but also creating new acronyms and using them all throughout.

Bottom line: I like his strategic principle but it was framed in such a way that I think most people won't enjoy the experience of learning it.

[Rafael Ramirez · Rating 5 out of 5]

Muy recomendable libro de estrategia corporativa que parte de una idea sencilla pero muy poderosa: el objetivo final de cualquier estrategia debe consistir en buscar aumentar la disposición de los clientes a pagar más por nuestro producto o servicio (el llamado WTP - "Willingness to Pay") o aumentar la disposición de nuestros colaboradores y proveedores a vendernos sus servicios y productos a un menor costo (el llamado WTS - "Willingness to Sell"). Ambas cosas sólo se logran si con nuestras acciones somos capaces de crear más valor para nuestros clientes (aumentando su WTP) o más valor para nuestros colaboradores y proveedores (disminuyendo su WTS), sin necesidad de recurrir estrategias demasiado complicadas.

Probablemente la aportación más importante de este libro es el dar muchos ejemplos de empresas que lo han logrado, ilustrando la aplicación de conceptos económicos fundamentales para influir en el WTP o WTS, como las economías de escala, los efectos de red, el poder de los bienes complementarios y los efectos de aprendizaje, en contextos actuales propios de la economía digital. Lectura apropiada especialmente para arrancar un proceso de planeación estratégica en cualquier compañía, grande o pequeña, sin importar su giro o industria.

[Taher Bellah · Rating 5 out of 5]

First create value, then everything will follow. This is the entire Harvard's Business School first year strategy course in a single book, that is full with insights and aha moments. In today's business world everyone talks about strategy, but the gap between top and lowest performers in the same industry is ever increasing. This book outlines in a fashion that lives up to its title how by simplifying strategy, and narrowing down the firm's focus on value creation it can enjoy both higher margins and more defensible competitive advantages. Great book.

[Megan · Rating 4 out of 5]

4.5 stars. A stand out book on strategy let down by annoying narration. I wonder had I read this rather than listened to the narration if I would have given it five stars.

The narrator was technically competent however clearly had NO IDEA what he was reading so put emphasis in the weirdest places. As a result I took a long time to come back to the book - conflicted between wanting to hear the ideas and not wanting to listen to the book.

So, definitely READ this one. In book form. I would have loved to hear Felix Oberholzer-Gee read this. The Out of Hours Podcast he does with two other HBS Professors is one of my faves.

The content however is great. Another strategy researcher and practitioner who promotes value creation and stakeholder capitalism over shareholder capitalism as the way to build long term success in companies. Felix is in great company.

Unlike many books on strategy this books is as relevant for the sole trader as it is for the biggest companies in the world.

Audiobook listeners: Do you agree that the narrator not only needs to be technically competent but UNDERSTAND and be interested the content to read it well?

[Pablo Mejia · Rating 4 out of 5]

Una idea transversal sencilla, pero muy potente: los negocios crean valor en la medida en que la "voluntad de compra" sea significativamente mayor a la "voluntad de vender". El autor explica que un componente del valor se internaliza a los accionistas vía márgenes de utilidad, pero otro hay otras fuentes de valor que se externalizan a los consumidores cuando la "voluntad de compra" es mayor al Precio; y a empleados y proveedores cuando los Costos son mayores a la "voluntad de vender".
El libro tiene muy buenos ejemplos de compañías globales, pero la simpleza del concepto implica que a veces no haya mucha profundidad en estos casos de negocio. Sin embargo, puede ser mi sesgo toda vez que, el autor enfatiza que es más importante la estrategia que factores de segundo grado como la capacidad de ejecución o la cultura organizacional.

[Sanford Chee]

Victor Calanog's review
https://www.facebook.com/photo?fbid=1...
"In this image: "Better, Simpler Strategy" by Felix Oberholzer-Gee (HBS Press, 2021).

Part of my job requires reading and reviewing 2-4 books and papers a week. Most business books tend to be merely a collection of success stories cherry-picked to prove a thesis. Few deal with the actual challenges of implementation: working with systems, people, and the realities of context, history, and trade-offs. The papers that offer nuance tend to be academic papers that few have the patience to read.

This book deftly manages to sidestep all that. The ideas it presents are simple but not simplistic. The questions it raises challenge its own propositions; the conclusions often counterintuitive and therefore insightful. There are examples of firms that succeeded, firms that failed, and what we can learn from such systematic ('general equilibrium') thinking. Entire chapters on trade-offs and execution issues bring it back to experiences of leaders and managers in the real world. It is a book that challenges you with the highest of ideals, and yet offers practical suggestions for concrete next steps.

This is, of course, not just because the author Felix Oberholzer is an award-winning teacher whose research has been published in the very best academic journals in multiple fields. Those are outcomes. It is because the author is a Renaissance man and humanist in the highest sense: he brings insatiable curiosity and a sharp mind, asking questions about what seems obvious, deriving new insights and making new connections. Not just about abstract concepts in economics and management - but about how it plays out in the real world. The chapter on complementors alone - drawing from economic thinking about substitutes and complements - can be the subject for an entire semester's course. Have many people asked the question of "why supply chains are people too"? How many business book chapters start with the link between Lady Gaga and Lipitor?

I particularly adored several chapters pushing the reader to think about what NOT to do, and where firms should UNDER-invest. While startups often face natural constraints and make decisions about trade-offs, larger companies tend to want to try to do everything - or at least be good at everything you put up on Post-It notes during 'annual brainstorming sessions.' But what would truly add value to customers, suppliers, employees? And what should be deprioritized?

I am torn between writing even more about this book, and leaving you to be delighted with its insights as you read through it yourself. On a personal note, I was incredibly blessed to have had the author as my MBA teacher, PhD primary advisor, and a close personal friend. One of our joint projects is discussed in the book - a pleasant surprise as Felix did not tell me that he was including it in this work. I have published many books and papers because of what I do for a living - but to have my name in this book's index is quite the honor and thrill.

I cannot recommend this book highly enough. It is not just about 'business and strategy.' It is a compass, a Socratic gadfly that will prompt you to ask questions about what 'adding value' means, whether it be for work, your personal life, or anything in between."

[Eric · Rating 5 out of 5]

"Better, Simpler Strategy" is outstanding. Read this for a strategic planning class for my higher ed program and it is extremely applicable.

If you're looking for a text that is practical, understandable, and direct then this is the one you want to read.

[Ashok · Rating 4 out of 5]

Value lifecycle is something that comes up in most of our internal strategy discussions. The book has this simple approach to think value first and puts a structure to a vague fly-wheel effect that teams generally have as drivers. There are aspects of this book we already do intuitively in running our companies but the book does make you think about being much more intentional in the goals we want to maximize.

PS: Huge fan of the after hours podcast so had to read this and have to say, the breadth of this book into different industries is unsurprising similar to the show

[Raphael Donaire · Rating 4 out of 5]

Better, Simpler Strategy is a kind of must-reading if you are seeking some strategy background. Backed by the strategic theory of value-based, Felix claims that companies that outperform peers increase the willingness of customers to pay (WTP) and decrease the willingness to sell (WTS) for their employees and suppliers in ways that are difficult to imitate. That is, companies must create value toward a multistakeholder approach considering customers, suppliers, and employees.

Value thinking enables enterprises to increase customers' willingness to pay, which depends on many things, including product attributes, quality, and the prestige a product might confer. Clearly, "without a meaningful difference, your company has little chance of earning returns over your cost of capital."

When battling for talent, firms typically pursue two approaches to gain leverage: 1) offer significant compensation or 2) make work more attractive. Felix's research highlights that the latter creates more extra sustaining value and proposes that increasing pay creates no value other than redistribution. Innovative companies continuously explore new ways to create value for their workforce and share that enterprise value with employees. With suppliers, innovative companies find ways to reduce suppliers' costs or work with the company.

Another valuable tool presented at the reading is the value map which describes attributes from the most important to least significant considering customers' and the employees' perspectives. Led by the value maps, Felix proposes that organizations can evaluate their competitive standing and strategic positioning. Competent firms exceed expectations where it counts.

The book has a bunch of case studies, making the reading appreciable.

[Paris Nikolopoulos · Rating 5 out of 5]

Paris Nikolopoulos

This is an incredibly important book! Its main success is making everyone reflect that value creation (effort to increase WTP and lower WTS) brings not only shareholder benefits but most importantly can catalyse the evolution of capitalism to a more inclusive societal system.

[Dan · Rating 5 out of 5]

Enjoyable read. It took me a moment to understand the concept of the WTP-WTS value stick model, but once I was able to I found a lot of utility. As mentioned in other reviews, the book focuses on theory, which is actually a discussion I enjoyed. Strategy is somewhat inherently meta-analysis, especially so when generalizing across company and industry. That does not mean it’s not useful, or not practical.

Focusing strategy on value creation allows you to better evaluate what makes you company work. This book doesn’t tell you how to create value in your specific company (for the most part). It instead challenges you to take the framework and apply it to whatever context you operate in. I personally wouldn’t trust a book that claimed to have solved the specifics of strategy for every firm and industry.

Worth the read.

[Darya · Rating 5 out of 5]

Great book with fresh concepts and frameworks for strategy! Loved examples and contents because they illustrated simple ideas on how to build strategy with the focus on two main business areas: customers and employees / suppliers. Creating value at those two levels will create high margins, efficient businesses processes and overall brand success. Simple things are quite often not that simple in practice and this book helps a lot to discover simpler way to get to business success.

[Guilherme Dantas · Rating 4 out of 5]

Acho que foi o primeiro livro de estratégia que faz um bom mix entre estratégia como unidade de negócio e produto final. Traz várias lições práticas para implementar novas estratégias. Vale a pena!

PS: Para quem trabalha como PM e afins, é o melhor que já li!

[Pasquale Mellone · Rating 5 out of 5]

Great book! I got a lot of insights out of it especially about customer delight, willingness to pay and near customers

[Jakub Sender · Rating 5 out of 5]

Very practical book with many examples supporting insights shared by the author. „Think Value, profit will follow” as a foundation of the Strategy will stay with me after this lecture!

[Boni Aditya · Rating 2 out of 5]

1. This is NOT strategy - it is just plain old business
2. It is rather simple but not BETTER by any meaning of the word BETTER.

Why is it simpler? SIMPLER because it is pretty dumb i.e. it only talks about two things - WTP - Willingness to Pay and WTS - Willingness to SELL.

This is pretty much the definition of BUSINESS - BUY LOW AND SELL HIGH.

This is what BUSINESS stands for i.e. arbitrage. There is nothing remotely related to STRATEGY most of it is just about adding value through value chains.

The author seems to confuse strategy with rather simpler Operational Excellence - somewhere in between the book there was a discussion about Strategy vs Operational Improvement

The author talks about having scale, having economies of scale and network effects and other things that one needs to have to increase the willingness to pay.

The chapters about WILLINGNESS TO SELL are extremely vague, and generic suggestions about how to improve the WTS, by setting up good conditions for the workers and paying the premium price for talent, about using lean and other techniques to get greater productivity from the suppliers and getting them to sell to you at lower price.

The discussion about operational excellence vs strategy is taken right our of HBR article written by clayten christenson - HBR on strategy.

The value curve is also taken from Blue Ocean Strategy.

Similarly the part about the network effects and economies of scale is straight out of THE PLATFORM DELUSION.

I am unhappy with this book because the WTS is generic, there is nothing that says how one can play to increase WTS.

This books seems to be stuck in the past i.e. almost 20-30 years old in PORTERS FIVE FORCES MODEL.

WTP and WTS seem to be the only things that the author is concerned about sometimes at the expense of strategy.

I have seen products and services create millions using fundraising strategy to be in losses for 10 - 20 - 30 years and break this WTP - WTS = NEGATIVE.

Amazon is one such company and so is CRED in India, in fact there are many companies, FLIPKART in India has never made a single cent in profit so far, but WALMART is willing to throw billions if required.

S0 this thesis of WTP greater than WTS is absurd in this day and age. these laws were already broken a long time ago.

IF THERE IS ONE THING THAT THE BOOK DOES NOT HAVE - IT IS STRATEGY.

Some of the parts of the books are CRINGY at best, if you want to really read a good book about strategy then you must read GOOD STRATEGY BAD STRATEGY

NO BULL SHIT STRATEGY is also a good book about simplifying strategy, infact CRUX by Richard Rumelt is far better book than this.

The section about COMPLEMENTS is a good one, but unfortunately that hinges more towards the FIVE FORCES framework than strategy.

The author lost me when he started talking about ROIC or return on invested capital, which is BUSINESS talk for how much interest I get If i put in a thousand bucks in a month.

This is the anti thesis of strategy. Strategy is counter intuitive to put is simple. If it is evident as ROIC, then it definitely not STRATEGY.

This book kind of pushes me back to the first time I had to come up with a strategy for someone.

The founder said "we will hire faster and value", I asked how?

He said, "we will do it, we will add great value than any other recruitment agency out there"

I asked "how" again

And he repeated "with team work"

And I knew immediately that he has no clue

THIS IS EXACTLY WHAT STRATEGY IS NOT - IF IT DOES NOT ANSWER THE QUESTION "HOW"

The book is similar, to "BELLING THE CAT"

The author: The Strategy is really simple - "it is just adding a lot of value"

Me: How do you add value?

The Author: It is really simple, you need to have WTP - Willingness to pay greater than WTS and when you subtract WTP-WTS = VALUE ADDED - see this is STRATEGY, business strategy that's it?

ME: How do you have more WTP? And how do you have less WTS?

The Author: Network effects, products and services, customer delight, employee satisfaction, and so on..

Me: How do i Get network effects? Which products or services should i build? How do i delight customers?

The Author: CIRCULAR LOGIC - build products that increase WTP like apple or others and several examples.

Me: That is not really strategy that is just circular logic and no value add. here - THE COLD START PROBLEM has strategy related to network effects.

This book is the result of such strategy i.e. if your strategy is right it will increase the WTP, this is a by product of STRATEGY,
Unfortunately much is not discussed about the real strategy, the focus of the book has circumvented to VALUE ADDITION, WTP WTS, which is what happen after you strategy becomes successful.

The good parts are when the author discusses about SUBSTITUTES VS COMPLEMENTS

LEARNING EFFECTS - CUSTOMERS VS NEAR CUSTOMERS

But I was disappointed with the book, it is talks very little about REAL STRATEGY, most of these are after effects of a good strategy.


He confuses the user with symptoms and does not talk about the disease i.e. the STRATEGY

[Eduardo Xavier · Rating 5 out of 5]

Though this book appeals to simplicity and achieve the whole story of value-based performance is necromancer work. The main idea of "Better, simpler, strategy" is delivery value to customer, employees (satisfaction) and supplier (surplus, in case of platforms), paying close attention to the diference between the willingness to pay (WTP) and the willings to sell (WTS): which is Value and how value is perceived by people, communities and also how companies drive resources and effort in order to improve activities towards to most important values.

Professor Felix also brings a contemporary view on how companies are now performing. As he talks about strategy he got into various discussions in order to make a company differentiate itself, compete and improve. (my printed version almost doesn't have a page without highlights)

Does't matter the many types of strategy there are, the simplest notion about bringing value for other people will also bring financial results in the end. But there is a game to play at WTP and WTS concept. Lot of works needs to be done back and forth in order to achieve a optimal balance between two and actually bring value to everyone. For example, happy people working every day will result at better experience for customers. But we need tool to improve the experience of the employee and also for the customer. This is not something new and anyone could infer that but I really enjoyed to know how many companies competed, worked to improve and differentiate itself. But also Felix's experiences, recommendations and narration. Like he presents his value-stick frameworks but also a lot of marketing insights.

[Randy · Rating 5 out of 5]

Brilliant. While most of business stratety works with 2x2 quadrants, Oberholzer-Gee does a nice PCA on business books and goes for only one dimension! The STICK! Practical and definitely every bit as good as Good Strategy Bad Strategy: The Difference and Why It Matters. Somehow gets to the "what do you do after talking" better than most books on strategy. I was worried my group would get stuck in analysis paralysis, but the idea of value drivers (while a common buzzword) came alive to me in this book. I would read this after Rumelt. You need need to understand a little about Porter, so I would also read his editor first: Understanding Michael Porter: The Essential Guide to Competition and Strategy. Oh and speak softly, and always carry a big stick.

[Ryan · Rating 2 out of 5]

The book focuses overly on characterizing a firm’s value creation as the difference between their consumers’ willingness-to-buy (WTB) and their suppliers’ (and employees’) willingness-to-sell (WTS). The concepts are combined in a visual tool called a “value stick”.

The author presents these concepts through a series of independent vignettes focusing on improving either WTB or WTS. The overall presentation is not especially effective as it’s unclear whether the emphasis is on teaching the concept of WTB and WTS versus on the bite-sized examples of how companies have done this in the past.

All in all I enjoyed the initial presentation of the value stick framework but I felt that the author failed to maintain a cohesive presentation across chapters. Each chapter reads as an independent article on some aspect of the value mapping concept and the incremental value of reading the next chapter quickly diminishes as the book progresses.

[Hanie Noor · Rating 4 out of 5]

Delivers what it intends to —simplified value creation strategy. Some parts reminds me of Japanese Ohlson intrinsic value model learnt during my undergrad. Pick this up to delve into the value stick method and strategy part. If you’re a thinker like me, you’d love this. The author naturally put questions in your head and urge you to look at the bigger picture + rethink along with the examples. Yes, it’s more on economy-wide constraints or the general equilibrium/macro. However it covers a lot on how giants made it, might be a bit far-fetched for SMEs the (need to contemplate and customise in order to apply some strategy). Formal narrative to fit the theme (might be boring for some) yet an enjoyable read for me.

[Iván Braga · Rating 4 out of 5]

Un novedoso libro sobre estrategia que plantea miradas renovadas e interesantes para un desafío tan relevante en la gestión de empresas. Y aunque pueda pensarse en '...otro libro más de estrategia', en este el autor realmente hace aportes diferentes y plantea enfoques refrescantes. Partiendo del problema de la creación de valor y en cómo lograr su expresión a nivel de resultados, a través de ejemplos basados en problemáticas muy actuales, el libro realmente ofrece ideas interesantes. La base del enfoque está en cómo las empresas son capaces de aumentar su atractivo y la disposición de los clientes a pagar por la propuesta de valor, al tiempo que también son capaces de hacer atractivo a empleados y proveedores la participación en su red de valor. No deja de ser interesante la mirada sobre la creación de valor hacia la sociedad y el desafío de innovar para hacerlo.

[Jelene Yost]

Wow! Pleasure to Read, Insightful to Ponder On

After hearing his podcast session on HBR, I had to read his book to see if there was quality meat on the bone of Felix's value-based strategy theory. It is like a Flintstone dinosaur rib of meat meets Rolex quality. Bountiful and magnificent!

Truly applicable insights throughout that make his theory sticky and something you can see applying in your organization (for profit, non profit, or community - it doesn't matter).

If you are looking for a slightly different perspective on how to be more strategic with your organizational or personal efforts to truly make an impact on those you serve - then this is your book!

[Ines · Rating 4 out of 5]

Generally liked the book, but those sticks I could not be bothered to read. Loved the chapter on value drivers - finally a real life example on this! I never knew if they were only used in a university setting or in real life as well.

As a huge fan of the podcast, I could find some of the topics from it again - also a nice touch.

As a little wish list for the next book: would have loved to read about a WTP scenario for air travel companies!

[Topher Hearn · Rating 5 out of 5]

This book explains how the best businesses focus on creating value for customers rather than by focusing on maximizing profits. All of this is explained using a value stick, where the top is willingness to pay and the bottom is willingness to sell. Great book for anyone wanting to understand business better!

[Jon Daiello · Rating 5 out of 5]

If you are looking to deepen your understanding and practice of strategy this is a fantastic book. The authors simple approach using the value stick provides a basic framework for strategic thinking. This is a great addition to your growth in strategic thinking.

[M. · Rating 5 out of 5]

It was a good read.

[Polly Callahan]

Recommended by authors of unleashed the unapologetic leader’s guide to empowering everyone around you

[Wannie Michelmann · Rating 3 out of 5]

Theoretical and quick read. Finished in a day. So so. Real world practices may very much differ

[Daryll · Rating 4 out of 5]

Strategy simplified, recommended for all career stages