13.
2 Deliberate strategy development
Illustration 13.1 The influence of strategic leaders
Chief executives and founders may have a profound effect on an organisation’s
strategy.
Jeff Bezos, Amazon CEO
Source: ZUMA Press, Inc./Alamy Stock Photo
On envisioning the future
When Amazon was just four years old CEO Jeff Bezos already
emphasised favouring growth over profit in its strategy:1
‘Amazon.com is a famously unprofitable company. And
the question is: Are we concerned about it? The answer
is, in the short term, no; and in the long term, of course.
Every company needs to be profitable at some point in
time. . . Our strategy, and we’ve consistently articulated this,
is that we believe that this opportunity is so large that it
would be a mistake for any management team not to invest
in it very aggressively at this kind of critical category forma-
tion stage. . . . We don’t claim it’s the right strategy. We just
claim it’s ours. But we do think it’s right. And that it would
be a mistake to try to optimize for short-term profitability.’
On changing strategy
NHS England’s Chief Executive Simon Stevens announced
the need for change as he presented the NHS Five Year
Forward View for healthcare in England:2
’But the NHS is now at a crossroads – as a country we need
to decide which way to go. The Forward View represents
the shared view of the national leadership of the NHS,
setting out the choices – and consequences – that we will
face over the next five years.
It is perfectly possible to improve and sustain the NHS
over the next five years in a way that the public and patients
want. But to secure the future that we know is possible,
the NHS needs to change substantially, and we need the
support of future governments and other partners to do so.
On building new businesses
Elon Musk, founder and CEO of electric vehicle manufacturer
Tesla Motors and entrepreneur behind PayPal and SpaceX has
provided many innovative ideas, but also led them to execution:3
‘Well, a company is a group of people that are organized
to create a product or service. That’s what a company is.
So in order to create such a thing, you have to convince
others to join you in your effort and so they have to
be convinced that it’s a sensible thing, that basically
there’s some reasonable chance of success and if there is
success, the reward will be commensurate with the effort
involved. And so I think that’s it . . . getting people to
believe in what you’re doing – and in you – is important.’
On governance and purpose
The Unilever CEO Paul Polman put the shareholders on notice
and abandoned quarterly reports along with earnings guid-
ance for the stock market (he retired as CEO in 2019):4
‘in order to solve issues like food security or climate change,
you need to have longer-term solutions. You cannot do that
on a quarterly basis. . . I need to create this environment
for the company to make the right longer-term decisions.
So, we stopped giving guidance. We stopped doing quar-
terly reporting. We changed the compensation for the long
term. . . I felt we had to do this to be a long-term viable
concern. I don’t call it courage. I just call it leadership, which
is doing these harder right things versus the easier wrong.
It’s easy to make a lot of these [short term] decisions, but
they are ultimately wrong for the long term. . . I also made
it very clear that certain shareholders were not welcome in
this company. That created quite some noise.’
Sources: (1) Jason Del Rey, ‘Jeff Bezos lays out his grand vision’, Recode.
net, 22 November 2015: www.recode.net/2015/11/22/11620874/
watch-jeff-bezos-lay-out-his-grand-vision-for-amazons-future; (2) NHS
England, ‘NHS Leaders set out vision for healthcare in England’, 2014,
www.england.nhs.uk/2014/10/23/nhs-leaders-vision/; (3) Alison van
Diggelen, Interviews with Elon Musk Inspire Word Art Series, Fresh
Dialogues, January 2013; (4) A. Boynton and M. Barchan, Unilever's Paul
Polman: CEOs Can't Be 'Slaves' To Shareholders, Forbes, 20 July 2015.
Questions
1 Can you provide other examples of founders’ or chief
executives’ influence on strategy?
2 What else would you emphasise as an important contri-
bution CEOs make to strategy development?
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