The Upside: The 7 Strategies for Turning Big Threats into Growth Breakthroughs Adrian J. Slywotsky with Karl Weber
Crown Business (2007)

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.

Dimensions of “a new strategic imperative”

I have read all of Adrian Slywotzky’s previously published books and reviewed most of them. In my opinion, he is one of the most important business thinkers of the last several decades. What we have in Upside is a continuation of Slywotzky’s emphasis on the importance of measuring what really matters, especially insofar as value migration during paradigm shifts within competitive markets are concerned, but I think there are some intriguing differences between this book and those which precede it. For example, Slywotzky establishes and then sustains throughout his narrative a conversational, at times almost (not quite) playful tone…certainly his tone is much less formal than in earlier works. Also, and more to the point, he devotes less attention to the “what” (i.e. seven strategies), preferring to focus primarily on the “why” and “how” of strategic risk management which enables just about any organization (regardless of size or nature) to “turn big threats into growth breakthroughs.”

More specifically, a major initiative fails or at least falls far short of high hopes and great expectations; there is a significant loss of customer revenue; there is an paradigm, shift within the given industry; a seeming unbeatable competitor appears; loss of brand power and leverage; the given industry has become a no-profit zone; zero or insignificant organizational growth. “The first two jobs of strategic management are to sidestep the unnecessary blows [i.e. self-inflicted wounds] and mitigate the blows you can’t avoid. You can avoid the biggest hits to your company’s value through as strategic risk management system that uses the principles and techniques described in the rest of this book.” Slywotzky then goes on to suggest: “Remember Warren Buffett’s first rule: Preserve your capital. And also his second rule: See the first rule.”

According to Slywotzky, “The first step in de-risking your product is to recognize the true odds of success; the second is to change them.” He explains how in the first chapter, citing Toyota as an exemplary company and its development of the Prius as a case in point. I especially appreciate that, on page 32 and throughout the book, Slywotzky includes a checklist of key points within the given context. These are action steps for his reader to consider. “How many of these types of moves can you adapt for your next big project?” (The key words are “moves” and “adapt.”) In fact, later in the same chapter and throughout his subsequent narrative, Slywotzky makes brilliant use of a reader-friendly device, “[name of company’s] Moves to [name of initiative].”H e uses a variation of it (e.g. “Toyota’s Further Moves to Change the Odds”) to indicate that effective strategic risk management, responding effectively to “big threats,” is an on-going process.

At least for me, some of Slywotzky’s most valuable material is provided in Chapter Seven, “When Your Business Stops Growing.” Although the first two jobs of a strategic management system are to sidestep the unnecessary blows and mitigate the blows that cannot be avoided, it can do much more than defend. “It is also an incredibly efficient means to find some of the biggest growth opportunities your business faces.” Slywotzky first focuses on demand innovation (i.e. looking at customers differently in terms of their economic needs and other, higher order needs) and cites 12 examples which include Netflix, Crest Whitestrips, Harley-Davidson, and Swiffer. For example, Harley-Davidson uses a brand extension as the basis of a consumer lifestyle on which a host of activities and purchases can be centered. Purchase a product and you also buy into an entire lifestyle (Harley Owners Group or HOG) that celebrates the freedom of the open road.

In the same chapter, Slywotzky also has much of value to say about the second major vector, creating or discovering just one Big Idea for your business. For examples, he cites and discusses Ikea (“from home furnishings to the home itself”), NTT DoCoMo (“the phone as universal gatekeeper”), and Nike (“making fitness cool”). For those readers who do not know how to create or discover a Big New Idea for their own company, Slywotzky observes that “the company that is constantly generating testing, and discarding new business ideas will be in a better position to find, recognize, and capitalize on the big new idea when it comes along than its more slow-moving competitors.” However different they may be in other respects, the most innovative companies (e.g. Apple, Google, Toyota, GE, and Microsoft) are guided and informed by the same conviction that it takes lots of bad ideas to get one good idea, lots of good ideas to get one excellent idea, and lots of excellent ideas to get one (as Steve Jobs characterizes it) “insanely great” idea.

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