Chris Zook’s “Ten Key Questions for Management”

In the Updated Edition of Profit from the Core published by Harvard Business Press (2010) and written with James Allen, Chris Zook provides updated key examples while adding new ones and renders “the lessons learned in a way that management teams can use can use as a tool to reflect on the way forward in today’s economy.” In the final chapter, he poses ten questions that he and Allen believe management teams should periodically ask themselves about their companies and at the start if every review of their basic growth strategy.

1. What is the most rightly defined profitable core of our business, and is it gaining or losing strength?

2. What defines the boundaries of the business that we are competing for, and where are those boundaries going to shift in the future?

3. Are there new competitors currently at the fringe of our business that pose potential longer-term threats to the core?

4. Are we certain that we are achieving the full strategic and operating potential of our core business, the “hidden value” of our core?

5. What is the full set of potential adjacencies to our core business and possible adjacency moves (single or multiple moves)? Are we looking at these in a planned, logical sequence or piecemeal?

6. What is our point of view on the future of our industry? As a team, do we have consensus? How is this point if view shaping our adjacency strategy and point of arrival?

7. Should major new growth initiatives be pursued inside, next to, or outside the core? How should we decide?

8. Is industry turbulence changing the fundamental source of future competitive advantage? How? Through new models? New segments? New Competitors? And what are we monitoring on a regular basis?

9. Are organizational enablers and inhibitors to growth in the right balance for the needed change?

10. What are the guiding strategic principles that should apply consistently to all of our major strategic and operating decisions?

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Note: Zook’s concept of “core” bears striking resemblance to Jim Collins’ concept of the “Three Circles”,” introduced in Good to Great: (a) What a company can be the best in the world at (and equally important, what it cannot be the best in the world at), (2) What drives the company’s economic engine, and (3) What those in the company care most passionately about.

Zook suggests that an organization’s core business “is that set of products, capabilities, customers, channels, and geographies that defines the essence of what the company is or aspires to be to achieve its growth mission — that is, to grow its revenue sustainably and profitably.”

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