Permanent link for The Three Rules for Businesses Strategy on February 17, 2023

You'll find volumes of advice on what business strategy to follow. Almost all of it is based on anecdote. Take it with a healthy dose of skepticism. However, Michael Raynor actually studied twenty-five thousand businesses and found three simple rules that the successful companies followed:

1. Better before cheaper—in other words, compete on differentiators other than price.
2. Revenue before cost—that is, prioritize increasing revenue over reducing costs.
3. There are no other rules—so change anything you must to follow Rules 1 and 2.

There's a proviso here, though, and unsurprisingly rule 0 is: do what the data says. Prioritize making data-driven decisions.

I'll let Raynor explain these rules.

Categories: management
Posted by Thomas Hopper on Permanent link for The Three Rules for Businesses Strategy on February 17, 2023.