Rich Horwath Keynote Speech on Strategic Thinking

Summary

Rich Horwath, a best-selling author and CEO of the Strategic Thinking Institute, emphasizes the importance of strategic thinking for business growth. He introduces the '3 A's of Strategy': Acumen (insight), Allocation (resource focus), and Action (staying on track). Horwath stresses that new growth stems from innovative thinking and urges businesses to regularly reassess resource allocation and avoid complacency. He also humorously cautions against neglecting strategic plans, advocating for a continuous strategic dialogue rather than an annual event.

Takeaways

• 📚 Rich Horwath is a renowned author and expert in strategy, having assisted thousands of managers worldwide in enhancing their strategic thinking skills.
• 🌟 Strategy should not be a tedious process akin to a long church sermon that induces sleep, but an engaging and insightful activity.
• 🔄 The concept of 'insanity' in business is doing the same things repeatedly while expecting different results, often termed as 'organizational lobotomy'.
• 🚀 Growth is stimulated by new thinking; without fresh ideas, expecting growth is futile, similar to expecting crops without planting seeds.
• 🧠 The '3 A's of Strategy' framework consists of Acumen (insight), Allocation (focusing resources), and Action (staying focused and avoiding distractions).
• 🎯 Acumen is the initial spark of insight that fuels all great strategies, projects, and initiatives.
• 💼 Allocation involves making trade-offs by choosing to focus resources on certain paths and not others, which is crucial for strategic success.
• 🏃‍♂️ Action is about maintaining focus on what's important for the business, rather than getting lost in the urgent but less important tasks.
• 🌱 The importance of pruning and reallocating resources is highlighted, as it allows for new growth and prevents stagnation.
• 📉 Even companies with vast resources like General Motors and Lehman Brothers can fail; it's the strategic allocation of resources that truly matters.
• 🗓️ Strategy is not a one-time event but an ongoing dialogue that should be integrated into daily business practices.
• 📑 The script humorously personifies a strategic plan that feels neglected, emphasizing the need for continuous engagement with strategic plans.

Q & A

Who is Rich Horwath?

Rich Horwath is a New York Times, Wall Street Journal, and USA Today best-selling author on strategy, CEO of the Strategic Thinking Institute, and a former chief strategy officer and professor of strategy.

What has Rich Horwath helped over 50,000 managers from companies like Google, Kraft, and FedEx to develop?

Rich Horwath has helped over 50,000 managers develop their strategic thinking skills.

What is the main message Rich Horwath conveys about strategy in his talk?

Rich Horwath emphasizes that new growth comes from new thinking, and expecting new growth without changing the way of thinking is like expecting different results from the same actions.

What does Rich Horwath define as 'insanity' in business?

Rich Horwath defines business insanity as doing the same things in the same ways year after year and expecting miraculous new growth.

What is the simple framework Rich Horwath developed for strategic thinking?

The simple framework Rich Horwath developed for strategic thinking is called the 'Three A's of Strategy' or the 'Three Disciplines of Strategic Thinking'.

What are the three A's of strategy mentioned by Rich Horwath?

The three A's of strategy are Acumen (insight), Allocation (focusing resources), and Action (staying focused on what's important).

What does Rich Horwath suggest is the number one driver of revenue growth?

Rich Horwath suggests that the number one driver of revenue growth is the reallocation of resources from underperforming initiatives to overperforming ones.

How often should companies reallocate resources according to Rich Horwath?

Rich Horwath suggests that great companies, the ones with the best growth, look at their resources on a monthly or quarterly basis for reallocation.

What does Rich Horwath say about the role of strategy in daily work?

Rich Horwath states that strategy is not an event but a dialogue, and it should be a daily habit rather than an annual two-day pilgrimage.

What is the main issue Rich Horwath identifies with how most people approach strategic planning?

Rich Horwath identifies that most people don't use their strategic plan to drive daily activity, which can make the planning process ineffective.

What does Rich Horwath suggest is the key to successful business strategy?

Rich Horwath suggests that the key to successful business strategy is to think differently, to not just be better but to be different, and to give oneself permission, time, and tools to think strategically.

Outlines

00:00

📚 Introduction to Strategic Thinking

Rich Horwath, a best-selling author and CEO of the Strategic Thinking Institute, is introduced as an expert in strategy who has helped over 50,000 managers from major companies develop strategic thinking skills. He emphasizes the importance of new thinking for new growth and introduces the 'three A's of strategy': acumen, allocation, and action. Acumen refers to the insight that starts all great strategies, allocation is about focusing resources and making trade-offs, and action is about staying focused on what's important. He uses the analogy of a farmer planting seeds to explain the necessity of new thinking for growth and warns against the insanity of expecting different results from the same actions.

05:02

🌍 Allocation and Trade-offs in Strategy

The speaker uses a personal anecdote from a safari in Africa to illustrate the concept of trade-offs. He explains that trade-offs involve choosing one path over another, which inherently means making decisions and cutting off certain options. This concept is applied to business strategy, where the speaker argues that companies must regularly reallocate resources from underperforming to overperforming initiatives to drive growth. He contrasts the typical annual resource reallocation with the more effective monthly or quarterly reallocation practiced by high-growth companies. The speaker also addresses the common excuse of lacking time or people for strategy, suggesting that strategy should be an ongoing dialogue rather than a one-time event.

10:04

🚀 The Importance of Strategic Mindset

Rich Horwath concludes by emphasizing the need for a strategic mindset over mere tactical action. He encourages giving oneself permission and time to think strategically, using tools and questions to facilitate this process. He humorously personifies a strategic plan as a neglected lover to highlight the tendency to abandon strategic plans after their creation. The speaker stresses that great strategies should be simple and actionable, drawing a parallel to the simplicity and appeal of Dr. Seuss's 'Green Eggs and Ham'. He concludes with a call to prioritize strategic thinking, quoting Michelangelo to underscore that success in business begins in the mind.

Keywords

💡Strategy

Strategy refers to a plan or method designed to achieve a specific goal or result. In the context of the video, strategy is about thinking ahead and making deliberate decisions to grow profits, create competitive advantage, and set direction for both work and life. The video emphasizes the importance of strategic thinking over simply reacting to immediate issues.

💡Best-Selling Author

A best-selling author is someone whose books have been very popular and sold a large number of copies. Rich Horwath, the speaker, is described as a best-selling author on strategy, indicating his expertise and the popularity of his work in the field of strategic thinking.

💡Strategic Thinking Institute

The Strategic Thinking Institute is likely an organization or company founded by Rich Horwath that focuses on teaching and developing strategic thinking skills. The mention of this institute establishes the speaker's credibility and his dedication to the subject.

💡Insanity

In the video, insanity is used metaphorically to describe the futility of doing the same things repeatedly while expecting different results. This concept is applied to business practices, suggesting that companies must innovate and change their approach to achieve growth.

💡Organizational Lobotomy

The term 'organizational lobotomy' is a metaphor used in the video to describe a company's failure to think strategically, instead operating on autopilot and without innovation. It implies a lack of strategic thinking that can lead to stagnation or failure.

💡Three A's of Strategy

The 'Three A's of Strategy' is a framework introduced by the speaker to help individuals and organizations think strategically. The A's stand for Acumen (insight), Allocation (focusing resources), and Action (staying focused on what's important). This framework is central to the video's message about strategic thinking.

💡Acumen

Acumen refers to keen insight or judgment, especially in matters of strategy. In the video, it is the first 'A' in the Three A's of Strategy framework and signifies the importance of having a clear and insightful understanding to initiate strategic projects or initiatives.

💡Allocation

Allocation, as used in the video, pertains to the act of distributing resources, such as time, talent, and budget, effectively. It is about making trade-offs and choosing what not to do as much as what to do, which is critical for strategic planning.

💡Action

Action in the video refers to the execution phase of strategy, where the focus is on maintaining attention on important business objectives and avoiding distractions. It is the third 'A' in the Three A's of Strategy and is essential for turning strategic insights into tangible results.

💡Trade-offs

Trade-offs are decisions where choosing one option means giving up another. The video uses the concept of trade-offs to illustrate the necessity of making choices in resource allocation. It is a fundamental part of strategic thinking, as it involves prioritizing certain actions over others.

💡Excellence

Excellence in the video is defined as deviation from the norm, implying that to achieve exceptional results, one must avoid standard practices and think differently. It is tied to the idea of strategic thinking and the need to innovate to stand out from competitors.

💡Reallocation of Resources

Reallocating resources means shifting resources from areas of low performance to areas of high performance. The video suggests that the best growth comes from companies that frequently reassess and reallocate their resources, rather than doing so only annually.

Highlights

Rich Horwath is a New York Times, Wall Street Journal, and USA Today best-selling author on strategy, and CEO of the Strategic Thinking Institute.

Rich has helped more than 50,000 managers from companies like Google, Kraft, and FedEx develop strategic thinking skills.

New growth in business comes from new thinking, and expecting growth without it is like expecting crops without planting seeds.

The three A's of strategic thinking: Acumen, Allocation, and Action, form the foundation of successful strategies.

Acumen is about insight — great strategies start with an 'Aha' moment or crucial insight.

Allocation refers to focusing resources, including time, talent, and budget, by making trade-offs and prioritizing.

Action is about staying focused on what's important, avoiding distractions like constant emails or urgent but less relevant tasks.

Excellence is deviation from the norm — doing the same thing in the same way year after year will never yield excellence.

Strategy should not be an annual event but a daily habit, continuously challenging the status quo.

Rich compares the failure to make strategic decisions to the organizational lobotomy, where companies keep doing the same thing expecting different results.

The concept of trade-offs is central to strategy: doing more of one thing means doing less of another.

Great companies reallocate their resources regularly (monthly or quarterly), not just annually, to foster growth.

Strategy is a dialogue, not a one-time event — it should continuously guide day-to-day activities.

The analogy of a strategic plan sitting on a shelf collecting dust illustrates the problem with static, unused strategies.

Success in business begins in the mind — thinking strategically requires giving yourself time, permission, and tools.

Transcripts

rich Horwath is a New York Times Wall

Street Journal and USA Today

best-selling author on strategy as CEO

of the strategic thinking Institute rich

has helped more than 50,000 managers

around the world from companies such as

Google Kraft and FedEx developed their

strategic thinking skills a former chief

strategy officer and a professor of

strategy he helps people think

strategically to grow profits create

competitive advantage and set strategic

direction for their work and life Rich's

appeared on ABC CBS c NBC CNN NBC and

fox TV and has consistently ranked the

number one speaker on strategy at

national conferences

[Music]

now this past Saturday morning I was

sitting in my home office listening to a

CD I recorded a few days earlier on

strategy and I was checking it for any

changes I might need to make my

six-year-old son Luke came into the room

and he plopped down on the big brown

leather chair

I watched him listen for a few minutes

and finally I had to ask so Luke what do

you think of dad's new CD on strategy he

paused for a moment and said it sounds

like Church and not making that

connection I said Church how is it like

Church he said well there's a lot of

talking I don't understand most of it

and I think I'm getting sleepy and it's

very easy for strategy to be that way

but hopefully not today now we've heard

it insanity defined is doing the same

thing over and over again and expecting

different results in business insanity

is doing the same things in the same

ways year after year after year and

expecting miraculous new growth I call

it the organizational lobotomy working

without thinking consider your

organization are the people you work

with highly strategic or are they

constantly fighting fires and being

reactive like bumper cars at a carnival

is strategy an annual two-day pilgrimage

to an off-site meeting at the Holiday

Inn or is it a daily habit there's a

simple but often overlooked premise in

business and that is new growth comes

from new thinking new growth comes from

new thinking expecting new growth for

your business without new ways of

thinking about it is like a farmer

expecting new crops to grow without

first planting the seeds there's a

simple framework I developed called the

three A's of strategy or the three

disciplines of strategic thinking and

those three A's are

human allocation and action acumen is

the insight all great strategy all great

projects all great initiatives start

with that insight that's so what that

AHA the second day is allocation

allocations our ability to focus

resources which are your time talent and

budget by making trade-offs as we'll see

today strategy is as much about what you

choose not to do as it is about what you

choose to do and the third a is action

actions our ability to stay focused on

what's important to the business and not

get distracted by the urgent things that

pop up on email and voicemail the

definition of excellence is deviation

from the norm excellence is deviation

from the norm you know if we're doing

the same normal things that other HR

folks are doing in other normal

companies in the same normal ways that

the market expects us to do them we will

never be excellent so push yourself to

think about not how are we better but

how are we different that's bringing

value to our customers and you look at

companies like General Motors at 150

billion dollars Lehman Brothers at 60

billion dollars going bankrupt today

more than ever having the most resources

guarantees nothing it's how we use or

allocate those resources that really

matters and so the second day in our

framework is allocation allocations our

ability to focus resources by making

trade-offs trade-offs are choosing one

path and not the other as an example

several years ago my wife and I were on

safari in Africa and we took a tour of a

Masai Mara tribal village led by a

native guide and he said the tribal

leader in this village has seven wives

because the women in the village do most

of the work

washing the clothes in the stream to

building the huts that you see out of

sticks and cow dung

so the huts the houses they live in are

actually made of sticks and dried cow

dung which is interesting anyway so

we're finishing up the tour and the

tribal leader the one was seven wives

emerges from his Hut and begins talking

with some of the tourists as we're about

to leave I noticed the tribal leader

talking to my wife and thinking this

might be her contingency plan I wandered

over to eavesdrop on the end of the

conversation and he said to her we have

much work to do here

but our lives are simple and good I am

always looking for the right people to

carry on our traditions I find you to be

attractive and sturdy would you like to

be one of my wives so after a long pause

by an a little too long for my liking

she said you know I love the land here

and the animals are certainly beautiful

but seeing as how many married I'll

respectfully have to pass so on the

bouncy jeep ride back to camp I couldn't

let that conversation go without just a

little jab so I said you know honey it

sounds like your decision earlier boiled

down to me or a house of cow dung and

she said yes and was much closer than

you think because in business is in our

personal lives were constantly faced

with trade-offs and trade-offs involved

incompatible activities more of one

thing means less of another and

inherently when we're making trade-offs

were making decisions and the word

decision comes from the Latin word decid

a day which means to cut off if you have

trees on your property you know that

every few years you've got to cut off

you've got to prune some of the low

branches some of the dead branches to

promote new growth we're really good

about adding things to our plate each

year but what we don't tend to do is

take things off of our plate

are you doing the same things in the

same ways in the same tactics year after

year or are you moving away from the

status quo and doing things differently

the number one driver of revenue growth

is the reallocation of resources from

underperforming initiatives to over

performing initiatives throughout the

year

most companies reallocate resources once

a year and then it pretty much looks

like it did last year

the great companies the ones with the

best growth are the ones that are

looking at their resources on a monthly

or quarterly basis and saying how can we

add new value or different value to what

we're doing

most people say rich I just don't have

the time or the people to do strategy

and hopefully what you're seeing today

is that strategy is not an event it's a

dialogue and you can use the questions

and some of the tools that we've talked

about to start that dialogue hi remember

me I'm your strategic plan you don't

call you don't write what am I supposed

to think

oh sure at the end of last year we were

hot and heavy

we took that two-day getaway to the

strategic planning off-site and you

showered me with time and attention you

told me how much I meant to you and said

we'd always be together

you even brought me to the annual

kickoff meeting and proudly presented me

to everyone then a few weeks passed and

I noticed you paying less attention to

me and more attention to that slinky

young thing you call blackberry after a

few months I didn't see or hear from you

at all I just sat on your shelf dressed

in this red faux leather three-ring

binder collecting dust now it's time to

start planning for next year and all of

a sudden you're back wanting more well

I'm sorry I'm just not that type of

strategic plan now any resemblance that

previous scene is completely

unintentional but highly likely let's

face it most of us don't use our plan to

drive daily activity and if we're not

using

plan to drive daily activity we may have

swell not have done one at all make

great strategies should be simple you

know maybe as simple as my daughter

Jessie she's 5 her favorite dr. Seuss

book which we seem to read almost every

night which is green eggs and ham and if

dr. Seuss was a strategist I think he

might have written something along the

lines of I am strategic strategic I am

do you like to think strategically I do

not like to think strategically not in

an office not in a tree it's more fun to

think tactically stuff I can touch stuff

I can see I do not like to think

strategically I haven't the time to be

so leisurely setting good plans I'll

leave to others got to check my

blackberry even in bed under the covers

no I do not like to think strategically

I prefer the adrenaline rush of mindless

reactivity and Michelangelo said a

person paints with their mind not with

their hands we live in an

action-oriented world but never forget

that your success in business begins

here first in your mind give yourselves

permission time and tools to think

strategically

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