Best Business Books 2018: Strategy

Howard Yu Leap: How to Thrive in a World Where Everything Can Be Copied (PublicAffairs, 2018)

Francesca Gino Rebel Talent: Why It Pays to Break the Rules at Work and in Life (Dey St., 2018) *A TOP SHELF PICK

John Doerr Measure What Matters: How Google, Bono, and the Gates Foundation Rock the World with OKRs (Portfolio/Penguin, 2018)

How can you innovate to avoid irrelevance? How can you nurture your best people, especially the rebels? And how can you set goals and objectives effectively to make sure your company succeeds? These are key questions for anybody charged with developing strategy for a large organization. And they are answered with clarity and verve in this year’s best business books on strategy. In Leap: How to Thrive in a World Where Everything Can Be Copied, management professor Howard Yu uses history to lay out a path for resisting disruption. In Rebel Talent: Why It Pays to Break the Rules at Work and in Life, Francesca Gino, a behavioral scientist and Harvard professor, upends the conventional wisdom on dealing with people who have difficulty adhering to norms. And in Measure What Matters: How Google, Bono, and the Gates Foundation Rock the World with OKRs, John Doerr, a legendary venture capitalist, applies an engineer’s discipline to the thorny question of how best to use metrics.

Logical Leap

When Howard Yu was studying for his Ph.D. at Harvard, Clayton Christensen was one of his supervisors. And to a large degree, Leap builds on Christensen’s work on disruptive innovation. “Is the displacement of early pioneering companies an inescapable fate in the modern economy?” Yu asks. The answer is yes — but not for those who can leap.

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The competitive advantage that accrues from scale, or great brands, or patents, is evanescent. But looking back through history, Yu has found that companies that survived dramatic shifts were able to leap from one knowledge system or foundational discipline to another. The book, which straddles business history and strategy, hangs on a simple but brilliant analytical frame: the knowledge funnel. As companies mature and scale up, they move (or leap) within the funnel from craftsmanship to mass production to automation. Think of Procter & Gamble, or Ford, or Yamaha as they first made soap, cars, and pianos by hand, then made them on an assembly line, and then automated production.

But in order to survive dramatic shifts, successful companies also have leapt sideways into new areas of foundational knowledge. For Swiss pharmaceutical companies that trace their lineage to the 19th century, the leap has been from organic chemistry to microbiology to bioinformatics and genomics. For P&G, the leap was from the discipline of mechanical engineering into the disciplines of consumer psychology (understanding marketing and advertising) and chemistry.

Yu identifies five clear and pragmatic principles at the center of the leap philosophy: (1) understand your firm’s foundational knowledge and its trajectory; (2) acquire and cultivate new knowledge disciplines; (3) leverage seismic shifts; (4) experiment to gain evidence; and (5) dive deep into execution.