This quote is from Harvard’s Professor Michael Porter. He is author of the Five Forces Model and the world’s leading authority on strategy. It’s a really valuable statement. First, the quote contains (a derivative of) the most useful word in strategy: Choices. (See my article: Most useful word in strategy). And second, adding the short word ‘not’ is so powerful. Porter teaches that good strategy always has clear trade-offs. But this is sometimes counter intuitive. We’re all encouraged to dream big and to have a can-do attitude. So, it takes discipline, rigorous thinking, and courage to not do something. But, if you do, then you can move the resulting free resources into something more profitable.
The richest and most famous investor in the world, Warren Buffet, once famously said: “The difference between successful people and really successful people is that really successful people say no to almost everything”. It sounds extreme. But it’s further validation of Porter’s thinking.
There are many clear technology sector examples. We take the choices that were made for granted. But they needed to be made. IBM chose not to enter the personal computer (PC) industry for several years after Apple and Commodore started it in 1977. IBM eventually entered the industry in 1981, and they (not Apple) dominated it through the 1980’s. Dell chose not to sell its PCs through retailers and resellers when other PC manufacturers did. Dell dominated the PC industry in the 1990’s. Salesforce.com chose not to sell on-premises software when other software vendors were profitably doing so. Salesforce.com is now one of the biggest software companies in the world. When Steve Jobs returned to Apple in 1997, he chose not to continue 70% of the existing portfolio and killed many products with immediate effect. (See my article on: Most useful decision in strategy). Sceptics will point at examples of missed opportunities and how revenue and market share were missed. Yes, the examples are there to see. Microsoft took an age to follow Amazon into the public cloud industry and no doubt missed opportunities. But, we need to see the bigger picture. Microsoft often chooses not to do a lot of things or not to do them immediately. And it has consistently been one of the most valuable companies in the world for many years.
So, please, find that discipline, thinking time, and courage to choose what not to do.