David B. Yoffie: An interview by Bob Morris

YoffieDavid B. Yoffie is the Max and Doris Starr Professor of International Business Administration at Harvard Business School. A member of the HBS faculty since 1981, he received his Bachelor’s degree summa cum laude and Phi Beta Kappa from Brandeis University and his Master’s and Ph.D. degrees from Stanford. Over the last two decades, Yoffie has chaired the HBS Strategy department, the Advanced Management Program, Harvard’s Young Presidents’ Organization program, and now chairs Harvard’s World Presidents’ Organization program. Yoffie has served as lead independent director of Intel, and on the boards of numerous companies, including HTC, TiVo, and Financial Engines. Professor Yoffie has also lectured and consulted in more than 30 countries around the world. In addition, he has served as a member of the U.S. Department of Justice’s commission on international anti-trust.

Yoffie is the author or editor of nine books, including his latest, Strategy Rules: Five Timeless Lessons from Bill Gates, Andy Grove, and Steve Jobs (HarperBusiness 2015, co-authored with MIT Professor Michael Cusumano. His prior book, Judo Strategy (Harvard Business School Press, 2001), was co-authored with Mary Kwak. Judo Strategy has been translated into ten languages and explores strategic techniques for turning your competitors’ strengths to your advantage. His other books include Competing in the Age of Digital Convergence (Harvard Business School Press, 1997), and Competing on Internet Time: Lessons from Netscape and Its Battle with Microsoft (Free Press, 1998, also co-authored with MIT Professor Michael Cusumano). Yoffie has written extensively for the New York Times, the Wall Street Journal, and the Harvard Business Review, as well as numerous scholarly and managerial articles on international trade, firm strategy, and global competition in high technology industries.

Here is an excerpt from my interview of David.

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Morris: When and why did you decide to write Strategy Rules and do so in collaboration with Michael Cusumano?

Yoffie: I had been studying Apple, Intel and Microsoft for more than 25 years. In fact, I had written more than a dozen cases on all three companies, including some of the most popular cases sold through Harvard. I was also lucky to meet Andy Grove in 1987, and work closely with Andy for the next 17 years. I was fortunate that Andy introduced me to Steve Jobs and Bill Gates in 1990.

Around 2009, I came up with the idea for the book. My hope was to explore why some CEOs became great strategists. By focusing on Gates, Grove and Jobs, I thought that I could offer unique personal insights developed over two decades about the most successful firms in the world. However, I wanted to wait until Steve Jobs retired from Apple. The idea was to have a beginning, middle, and end to the careers of Gates, Grove and Jobs, which would allow us to evaluate their strategies with objectivity.

Michael Cusumano and I generally had lunch once or twice a year, and I mentioned the idea for the book about a month after Steve Jobs died in 2011. Since Michael had also written extensively on all three companies and the three CEOs, he got very excited about the project. By early 2012, we launched the book project together.

Morris: To what extent (if any) does the book in final form differ significantly from what you originally envisioned?

Yoffie: The original title of the book was Masters of Strategy, which the publisher did not like. We spent months debating titles. The biggest changes were probably Chapter 5, “Shape the Organization around Your Personal Anchor,” and the last chapter, “Lessons for the Next Generation.” Trying to understand what enabled Gates, Grove, and Jobs to execute their strategies so effectively was difficult to nail down. We spent months debating different ideas. The last chapter also required diving into new research to demonstrate that the new “superstar” CEOs in the tech world, such as Larry Page, Mark Zuckerberg, and Jeff Bezos, employed the same strategic principles.

Morris: In your opinion, what are the defining characteristics of a superior strategy?

Yoffie: The theory of the book is that great strategists do several things in common, which we call strategy rules. First, to develop a superior strategy, a manager, entrepreneur or CEO has to “look forward” several steps into the future, then “reason back” to develop an action plan for today; second, they have to be willing to make big bets, but without betting the company. Third, they need to develop platform and ecosystems, not just products. Fourth, they have to master tactics, especially what we call ‘judo’ and ‘sumo’ tactics. And finally, they have to execute by shaping the company around their personal anchors. Great strategies will vary from company to company, and industry to industry. But the approach to developing and executing a strategy can and should be similar across organizations.

Morris: For those who have not as yet read your brilliant book, you focus on three “strategy masters.” What are the defining characteristics of each as a CEO? First, Bill Gates

Yoffie: Our focus is largely on their commonalities, rather than their uniqueness. Of course, each CEO has a unique story. Gates’s origins and “personal anchor” was a deep knowledge of software. He was a hacker at heart. But Gates was also a natural strategist. He understood from the creation of Microsoft how to build an entirely new industry (packaged software), and perhaps most important, how to develop a software “platform.” Gates had an intuitive understanding about creating “network effects,” long before the academic community or press popularized the concept.

Morris: Next, Andy Grove

Yoffie: Andy Grove was an engineer’s engineer. Unlike Gates, he was not a natural strategist. He started in R&D, moved into operations, and ultimately took over the top job. In the process, he learned how to exploit his considerable intellect to resolve new and bigger problems. Grove’s personal anchor was his ability to bring an engineering discipline to a complex manufacturing organization. While Gates got into the weeds of writing code, Grove created a discipline for highly structured management processes.

Morris: Finally, Steve Jobs

Yoffie: Jobs’s career as a strategist has to be divided into two periods: the early Steve Jobs, when Apple was first formed; and the later Steve Jobs, when he returned to Apple in 1997. The early Steve Jobs was impatient, impertinent, and immature. His personal anchor was his great sense of design and usability. However, his drive for perfection along those lines nearly bankrupted the company in the mid-1980s. The later Steve Jobs developed a maturity, which enabled him to bring perspective and a stronger team to the company.

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To read the complete interview, please click here.

David cordially invites you to check out the resources here.


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