Felix Oberholzer-Gee > Quotes

“If no one misses you, if your value stick resembles everybody else’s, you are not making a difference. And without a meaningful difference, your company has little chance of earning returns in excess of your cost of capital.”
― Felix Oberholzer-Gee, Better, Simpler Strategy: A Value-Based Guide to Exceptional Performance

“By helping your suppliers lower their cost, by making it easier for them to sell to your organization, you end up helping yourself. Ask not what your supplier can do for you …”
― Felix Oberholzer-Gee, Better, Simpler Strategy: A Value-Based Guide to Exceptional Performance

“Products and services that raise the willingness-to-pay (WTP) for another product are called complements. These (easily overlooked) helpers contribute substantially to the WTP of just about every product ever created. Just think of all the complements without which cars would be far less valuable: roads, parking garages, gas stations, repair shops, GPS, and driving schools (figure 6-1).”
― Felix Oberholzer-Gee, Better, Simpler Strategy: A Value-Based Guide to Exceptional Performance

“Simplicity opens up room for creativity and broad engagement.”
― Felix Oberholzer-Gee, Better, Simpler Strategy: A Value-Based Guide to Exceptional Performance

“Did you notice the pattern in the three examples? In each instance, we predicted substitution when in fact the new technology turned out to increase the willingness-to-pay (WTP) for existing products and activities. This type of bias is the norm. We fear change; potential losses loom larger than similar gains, a phenomenon that psychologists Amos Tversky and Daniel Kahneman call loss aversion.12 Loss aversion keeps us preoccupied with the risk of substitution even when we look at complementarities.”
― Felix Oberholzer-Gee, Better, Simpler Strategy: A Value-Based Guide to Exceptional Performance

“Near-customers are the ones whose WTP is fairly close to the level that is required to make a purchase. Understanding the determinants of this group’s WTP can reveal substantial business opportunities. It is useful to ask, Why are your near-customers not in the market for your product? Do they misperceive its value? How might you tweak your offering to boost their WTP and turn them into buyers?”
― Felix Oberholzer-Gee, Better, Simpler Strategy: A Value-Based Guide to Exceptional Performance

“Just as creating value for clients requires a degree of customer intimacy, being close to your suppliers enables you to see initiatives that would increase supplier surplus. Do you remember Yasukane Matsumoto, the Japanese printing executive? He visits each of his suppliers personally before he decides to build a partnership.”
― Felix Oberholzer-Gee, Better, Simpler Strategy: A Value-Based Guide to Exceptional Performance

“Companies compete for customers by creating superior customer delight. Many companies strive to be best in class. But having better quality and higher WTP is no guarantee for success. What matters is the difference between WTP and price—in other words, customer delight.”
― Felix Oberholzer-Gee, Better, Simpler Strategy: A Value-Based Guide to Exceptional Performance

“As long as the price increase is smaller than the rise in WTP, both customers and the company are better off. At the bottom of the value stick, companies create more attractive working conditions to lower WTS. They then share this value by reducing compensation. As long as the drop in WTS is greater than the reduction in salaries, both employees and the company are better off.”
― Felix Oberholzer-Gee, Better, Simpler Strategy: A Value-Based Guide to Exceptional Performance

“What do executives love best about customer delight? The fact that it is highly contagious. Just ask David Vélez, CEO of Brazil’s Nubank, the world’s largest independent digital bank. Nubank gains more than 40,000 customers each day, 80 percent of them through referrals from existing customers.”
― Felix Oberholzer-Gee, Better, Simpler Strategy: A Value-Based Guide to Exceptional Performance

“Network effects are a positive feedback loop: as more retailers attract a larger number of customers, additional retailers are drawn in. Network effects can cause markets to reach a tipping point: to spring from very low adoption to universal acceptance in no time at all. And the reverse is true as well. As fewer people use cash, the number of establishments that can make change drops and fewer stores are willing to accept cash. This situation gives customers an incentive to move to mobile payments.”
― Felix Oberholzer-Gee, Better, Simpler Strategy: A Value-Based Guide to Exceptional Performance

“is surprising, perhaps, but true nevertheless: the companies that perform best do not think about themselves first and foremost. They dream up ever better ways to create value for others. Think value, not profit, and profit will follow.”
― Felix Oberholzer-Gee, Better, Simpler Strategy: A Value-Based Guide to Exceptional Performance

“This is a first insight. If you examine customer data to find complementarities, you would like to see that nonexistent world in which the online product is not available. If we could somehow compare that world with the world that includes online purchases, we would be able to discern the true relationship between the two products. The most sophisticated businesses use three approaches to get closer to the truth: pattern recognition, trend analysis, and experiments.”
― Felix Oberholzer-Gee, Better, Simpler Strategy: A Value-Based Guide to Exceptional Performance

“companies that achieve enduring financial success create substantial value for their customers, their employees, or their suppliers”
― Felix Oberholzer-Gee, Better, Simpler Strategy: A Value-Based Guide to Exceptional Performance

“My recommendation is to begin your value curve analyses by employing a fine-grained customer segmentation. Create separate value curves for many different groups of customers. If the data show that two segments have nearly identical value drivers, you can treat the two groups as one segment. If you begin with a broad grouping, however, subtle differences that might influence your strategy will remain hidden.”
― Felix Oberholzer-Gee, Better, Simpler Strategy: A Value-Based Guide to Exceptional Performance

“The simplicity of the strategy is key if one is to execute at breakneck speed. Every executive, every store manager, every employee with an idea about ways to raise WTP or lower WTS can be sure that they are helping move the company in the right direction.”
― Felix Oberholzer-Gee, Better, Simpler Strategy: A Value-Based Guide to Exceptional Performance

“There are three reasons why this type of thinking is prevalent in companies that create exceptional value. A first is that in most industries, variation in profitability inside the industry exceeds the profitability differences across industries.14 In other words, your best opportunities are almost always in your current industry, even if it is considered a difficult place for business. A second reason to focus on competitive positions inside an industry (versus industry attractiveness) is that positive industry fundamentals will simply be reflected in the multiples that companies need to pay to enter an attractive industry. Finally, for companies that happen to be in struggling industries, a focus on headwinds is demoralizing, and it likely contributes to decreases in productivity. “It’s a virtuous cycle,” says Joly.”
― Felix Oberholzer-Gee, Better, Simpler Strategy: A Value-Based Guide to Exceptional Performance

“By simplifying strategy, we can make it more powerful. By using an overarching, easy-to-grasp framework that is tied to financial success, we gain a common language that allows us to evaluate and pull together the many activities that take place in our organizations today.”
― Felix Oberholzer-Gee, Better, Simpler Strategy: A Value-Based Guide to Exceptional Performance

“Is it even plausible that WTS is low? For work that is not intrinsically attractive, the answer is probably no. Remember, it is passions that drive down WTS. Also, contractors for whom the work constitutes their principal income are unlikely to have low WTS. For example, a work arrangement with a person whose full-time job is to clean homes should not be based on a premise of low WTS.”
― Felix Oberholzer-Gee, Better, Simpler Strategy: A Value-Based Guide to Exceptional Performance

“Applying a value lens to stakeholder capitalism, two ideas strike me as particularly important. First, business creates substantial value for customers, employees, and suppliers even if its only goal is to maximize financial returns. Think of all the stories in this book—Best Buy, Apple, Michelin, Quest, Intel, Tommy Hilfiger, and many more. Every one of them is testament to the ability of business to create significant customer delight, employee satisfaction, and supplier surplus. Competition is our best assurance that companies continue to innovate in service to these stakeholders. Second,”
― Felix Oberholzer-Gee, Better, Simpler Strategy: A Value-Based Guide to Exceptional Performance

“This configuration provides Walmart with three types of benefits. By placing the stores within a day’s drive of the distribution centers, the company spreads the fixed cost of the central warehouses over a large volume of sales, creating economies of scale. Because the stores are relatively close to one another, delivery trucks can supply them quickly, creating economies of density, a special type of scale economy. For every mile that a store is closer to a distribution center, Walmart’s profit increases $3,500 annually.16 With more than 5,000 stores in the United States alone, economies of density contribute noticeably to the company’s bottom line. Because the stores can be resupplied quickly, they reserve little space for inventory; virtually every inch is dedicated to selling products.17 Walmart’s third advantage highlights the link between market size and fixed costs. In a small market, fixed cost cannot be spread over a large volume of business. As a result, Walmart, the company with the largest share, has a distinct cost advantage. Even if a second firm decided to compete, was able to match Walmart’s infrastructure, and managed to gain significant share, both companies, each saddled with significant fixed cost, would suffer reduced profitability. Anticipating this outcome, potential entrants are reluctant to enter in the first place. In many of the smaller markets, Walmart faced little competition for precisely this reason. Where it was alone, the company raised prices by as much as 6 percent.18”
― Felix Oberholzer-Gee, Better, Simpler Strategy: A Value-Based Guide to Exceptional Performance

“Becoming stuck in the middle is often a manifestation of a firm’s unwillingness to make choices about how to compete. It tries for competitive advantage through every means and achieves none, because achieving different types of competitive advantage usually requires inconsistent actions.”
― Felix Oberholzer-Gee, Better, Simpler Strategy: A Value-Based Guide to Exceptional Performance

“Managers who pay attention to WTP consider the entire customer journey and search for opportunities to create value at every step along the way.”
― Felix Oberholzer-Gee, Better, Simpler Strategy: A Value-Based Guide to Exceptional Performance

“my goal is to provide you with a powerful yet simple way of thinking about business and the role of strategic management.”
― Felix Oberholzer-Gee, Better, Simpler Strategy: A Value-Based Guide to Exceptional Performance

“Our passions move WTS in a powerful way. We all have activities that we pursue for pure enjoyment, no compensation needed. WTS is zero (or even negative if you are willing to pay good money to engage in your favorite hobby).”
― Felix Oberholzer-Gee, Better, Simpler Strategy: A Value-Based Guide to Exceptional Performance

“Paying close attention to WTP throughout the customer journey allows you to see opportunities for increasing customer delight in a myriad of ways. Motivating consumers to purchase a product and facilitating its sale (by placing vending machines before the turnstiles) is a far narrower concern than the ambition to create a great customer experience. Recognizing”
― Felix Oberholzer-Gee, Better, Simpler Strategy: A Value-Based Guide to Exceptional Performance

“Our mission is to be the destination and authority for technology products and services. We are here to help our customers discover, choose, purchase, finance, activate, enjoy, and eventually replace their technology products. We also help our vendor partners market their products by providing them the best showroom for technology products, both online and in our stores.”
― Felix Oberholzer-Gee, Better, Simpler Strategy: A Value-Based Guide to Exceptional Performance

“When no one knows when to say no, most ideas (brought forward by talented and ambitious employees) seem like good ideas. And when most ideas seem like good ideas, we end up in the hyperactivity that pervades the business world today.3”
― Felix Oberholzer-Gee, Better, Simpler Strategy: A Value-Based Guide to Exceptional Performance

“Do you have a deep understanding of the reasons why some individuals do not consider your products or services? Near-customers can represent a significant business opportunity, but they are easy to overlook because addressable-market analyses and existing marketing initiatives typically provide little information about these groups.”
― Felix Oberholzer-Gee, Better, Simpler Strategy: A Value-Based Guide to Exceptional Performance

“think value, and profits will follow.”
― Felix Oberholzer-Gee, Better, Simpler Strategy: A Value-Based Guide to Exceptional Performance