Adrian J. Slywotzky, Part 1: An interview by Bob Morris

Adrian J. Slywotzky

Adrian J. Slywotzky is a consultant and author of several books on economic theory and management. He graduated from Harvard College and holds a JD from Harvard Law School and an MBA from Harvard Business School. He has worked as a consultant since 1979 and is currently a partner at Oliver Wyman. His published books include Value Migration: How to Think Several Moves Ahead of the Competition (1995), The Profit Zone: How Strategic Business Design Will Lead You to Tomorrow’s Profits with David J. Morrison and Bob Andelman (1998), Profit Patterns: 30 Ways to Anticipate and Profit from Strategic Forces Reshaping Your Business with Morrison and Ted Moser (1999), How Digital Is Your Business with Morrison (2000), Profit Patterns: A Field Guide with David J. Morrison (2002), The Art of Profitability (2004), How to Grow When Markets Don’t with Richard Wise (2005), The Upside: From Risk Taking to Risk Shaping—How to Turn Your Greatest Threat into Your Biggest Growth Opportunity with Karl Weber (2007), and most recently, Demand: Creating What People Love Before They Know They Want It (October, 2011)

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Morris: Before discussing any of your books, a few general questions. First, other than a family member, who has had the greatest impact on your personal development?

Slywotzky: Three people really changed the path I travelled: my high school sophomore English teacher, who taught me how to write; my piano teacher, who taught me how to listen (to people, as well as to music); and my partner, David Morrison, who taught me management, leadership, and a values-centered approach to business.

Morris: A 12th century French monk, Bernard Chartres, once observed, “We are like dwarfs standing on the shoulders of giants.” On whose shoulders do you stand?

Slywotzky: There are lots of giant shoulders I’m in debt to. Just a few of them include: Drucker and Deming, Michael Porter and Taiichi Ohno. Drucker because of his prophetic and clear thinking on management. Deming because he taught me to keep asking “Why?” Porter because he created the foundation of pragmatic industry analysis. And Ohno because he showed how radically you can redesign a business even if you’re starting from what looks like a hopeless situation. And, of course, the Beatles and Picasso, who never stopped challenging and reinventing themselves.

Morris: Was there a turning point in your life (if not an epiphany) that set your career on the course you continue to follow? Please explain.

Slywotzky: The big turning point was my dad saying he won’t pay for any more schooling, and that I had to get a job. Having to get a job can do wonders for your professional development. In 1993/94, when I absolutely didn’t have the time, I was induced/challenged to write a book.  It turned out to be Value Migration. It showed me that: a) it could be done; b) you learned so much more by forcing yourself to do it; and c) it actually helped to challenge people to think differently about their businesses.

Morris: Of all the non-business thinkers, from whom have you learned the most valuable business lessons?

Slywotzky: For me, many of the most valuable lessons came from long ago: Henry V (Shakespeare’s creation) on leadership. Henry V could teach anyone how to lead, despite impossible circumstances, by creating a real relationship with the people you lead. Sun Tzu on strategy (not sure there’s ever been anything better since). Sun Tzu showed how to find and take advantage of the key pressure points in any situation. And I think if you read Homer’s Iliad, you will find in it the essence of every business, military, political, and family battle you’ll ever encounter, especially the endless interplay between what we can control and what we can’t (cleverly disguised as the “actions of the gods”). The other two non-business thinkers who were critical were Thomas Kuhn (The Structure of Scientific Revolutions) and Michel Foucault (The Order of Things). Both of them teach how incredibly difficult it is to see the transition soon enough to make a difference.

Finally, the comics, Yogi Berra, Steven Wright, Dave Barry. If you understand comedy, you’ll have a really good chance at understanding what makes people tick.

Morris: To what extent (if any) has your formal education in law proven to be beneficial to your consulting relationships with various clients?

Slywotzky: The law taught me (at great psychological cost) two priceless lessons:  Always keep asking the next question, no matter how tired you are. And always be looking for the impact of politics in every situation (yes, including all the judicial ones).

Morris: You have collaborated on writing books with several different people. Was that intentional and/or a coincidental?

Slywotzky: The collaboration was 100 percent intentional. I loved the give and take, and the constant debate. The constant challenge of a different point of view can be both massively annoying and completely priceless.

Morris: In your opinion, what are the essentials of effective collaboration?

Slywotzky: For collaboration to work all you need are a few simple ingredients: respect, trust, flexibility, patience, and a lot of good lunches and dinners.

Morris: Most change initiatives fail or at least fall far short of original expectations. In Leading Change, James O’Toole suggests that cultural resistance is often the reason, the result of what he apt characterizes as “the ideology of comfort and the tyranny of custom.” What do you think?

Slywotzky: Ah – “The ideology of comfort” and “the tyranny of custom” – beautifully put. In Value Migration, I call it “institutional memory,” the things we love to do because we’re good at them. But, when an external transition occurs, we need to learn new things, to get way out of our comfort zone. We often need to do the opposite of what we used to do (e.g., get much lower cost, much faster, or more solutions oriented).

Sometimes it takes a degree of internal shock therapy to make the switch. Sometimes, it means doing both the old and new well. As Yogi Berra once advised: “When you come to a fork in the road, take it.” He could have added: “Especially during the really big transitions.”

Morris: In your opinion, are business opportunities today better, worse, or about the same as they were (let’s say) five years ago? Please explain.

Slywotzky: Today’s economic conditions are much worse, and yet the opportunities greater, precisely because business conditions are worse. Customers today (consumers and business) need a lot more help. They face a lot more problems. And it’s those problems that define tomorrow’s opportunities. Henk Kwakman of Nespresso once said: “Discover a problem, discover a business.” If that’s the case – today is a time filled with tremendous new opportunities.

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To read the complete interview, please click here.

The Profit Zone: A book review by Bob Morris

The Profit Zone: How Strategic Business Design Will Lead You to Tomorrow’s Profits
Adrian J. Slywotzky and David J. Morrison with Bob Andelman
Crown Business (2003)

Note: I recently re-read this book before beginning to formulate questions for an interview of Skywotsky. With all due respect to current business bestsellers, none offers more and better insights of immediate and substantial value.

The Place to Be

In Part One, the authors argue that “market share is dead” as an overall strategy goal. Instead, to achieve sustained growth in profits and shareholder value, companies need a “customer-centric business design” which anticipates and addresses constantly shifting customer priorities. There is no single design which fits all circumstances. but the most effective designs will start with customer priorities.

In Part Two, the co-authors shift their attention to several “reinventors” who have achieved extraordinary success. Most are familiar: Welch, Hayek, Goizueta, Schwab, Grove, Eisner, Hatsopoulos, Barnevik, and Gates. However, and this is an excellent example of the book’s unique and substantial value, Slywotzy & Morrison note that “the principles and techniques of reinveniting a company’s business design to get it into the industry’s profit zone…apply with equal force to small companies, to divisions of larger companies, and to the middle managers who run them. In fact, the reinventors we will be reading about in the future are already honing their skills at innovative business designs today.” The authors then examine several smaller firms such as Madden Communications, Cardboard Box, Inc., and Clozaril Patient Management System.

In Part Three, the authors provide a “handbook” which explains in detail how innovation works.This book is relevant to all organizations (both for-profit and non-profit) which seek to increase their economic value. Non-profits must also make critically important decisions (such as those involving allocation of resources) if they are to achieve their objectives. The appendices provide additional guidance so that the reader can implement whichever of the book’s ideas and suggestions are most relevant.

If optimizing your organization’s profits is your destination, here’s a map to get there.

Slywotsky’s new book, Demand: Creating What People Love Before They Know They Want It, will be published by Crown Business (October 2011).