Simple rules: Common mistakes with simple rules

In this review Donald Sull is talking about five types of pitfalls that can arise which may overrule the simple rules of the organisation. He says that pitfall can arise in many ways and that can derail all the rules built. One of the pitfalls he talks first is that simple rules are too broad, organisation try do a lot of process by thinking that they are concentrating only on single process as such. You should always think about only a single process that can be brainstorming, acquisition, new product development where you are clear about the process. Second pitfall he talks about is that rules are too detailed and sometimes it becomes too overwhelming and confusing to handle. Third way that simple rule may go bad is that they are too vague, here they mean that even if they more focus on a particular process but they too little opportunities because of poor guidance in the working. Fourth pitfall can be having rules that are too mindless; organisation has rules that are simple but revolves around without any proper thinking process going into development of the rules. Fifth rule can be letting the simple rules going beyond the sell by date ie rules that becomes irrelevant after some years of the working of the organisation.

Simple rules: Strategy as simple rules

What are simple rules for strategy and how you are going to make them work in your organisations and most of the managers try to focus on opportunity strategy but you should know how to implement this strategy in a large complex organisation. He talks about how to put strategy in simple rules and to implement in your large organisation. One of the strategies of simple rule is choosing a process for doing things that make your organisation into a flow of opportunities, selecting small no of simple rules so that you can capture the opportunities that you are looking. There are five simple rules for organisation to capture opportunities that is available which make others not to pass by. First one is choosing what are the opportunities available for the organisation, second set of rules is privatisation ie which project should be concentrated first  and what should be done last. Third set of rule is about process of how you pursue a project. Fourth rule is pacing how you determine the timing of new product development. Five is pulling up or deciding when to get out of opportunity ie how to get out of some work when it is already done. Strategy of following simple rules allows the organisation to strengthen their chances of sustaining in the market and controlling the threats that may come.

The main advantages of simple rule is that it create a balance between too much structure in the organisation and the confusion that can happen due to complicated rules which had prevailed for long time. These rules if it clear and well-articulated that can be circulated through the organisation, these simple rules also makes it explicit.at the end he talked about pitfalls that can happen even if you follow the simple rules perfectly.

Simple rules: three logics of value creation

As simple rules Donald Sull, Associate Professor of Management Practice in Strategic and International Management talks about three logics of value creation. He is explaining about dealing with the complexity of the world with simple strategies. He gave the definition of strategy in three simple words, ie strategy is to create capture and sustain. First approach of strategy is value creation through position, identify the attractive market, stake out a position in that market built high barriers to entry so that your competitors are kept away and try to create value he gave an example of military strategy ie to find a high hill and build a fortress around it and keep all the equipment’s ready for use. Second is resource approach to value creation, it is about having our own resources and these resources should be rare, valuable because people pay more for any premium products and your product should be difficult to imitate. If you have such a resources that has all these values as mentioned above, it is very difficult for your competitor to grab the value of the resources you have. Third is opportunity logic of value creation here it is seeing a gap in the world market and identifying the customers and assemble all the resources to remove the gap in the world market here you are not keeping any resources but you are managing the uncertainty of the gap filling the gap. You take only what is left over after paying out for all the resources. This approach of opportunity is very interesting for many managers who are underdogs who have not resources left over, it bring about and is the best approach for volatile and fats moving market.