Nathan/ Your experience with strategy is different than most businesspeople—it’s unapologetically skeptical, if not, dismissive of traditional approaches to strategy. 

Carl/ Yes. In business, there is a huge number of people claiming things to be strategic that clearly are not. Some of it is fractal in nature—at one level it may be strategic—but, if you really step back, I would say that 95 to 99% of what a company does isn’t really strategic. There are a few big decisions that are made and then most everything else is tactical execution. Every big company I’ve ever been at, the number of people that claim, “Here’s our new strategy!” It’s not. That’s my take on strategy. Often, it’s just your plans for the year.

When businesspeople claim they’re going to do a “strategic review” it’s usually a bunch of horse shit. To me, the strategy should tell me how you’re going to beat your competition further, distance yourself between you and your competition, build some barriers between something, etc. It’s about actually being engaged in part of competition.

Nathan/ Would you also agree that it’s not always your competition? Sometimes it’s what’s happening in the rest of the world: technology, society, nature, whatever.

Carl/ Yes, but it still comes down to competition. I look at strategy as a way to get ahead of your competition. You have vast options but you need to decide, “I’m going to out-compete because I’m going to have better customer service, you know, Zappo’s, or I’m going to out-compete because of supply chain, Walmart or Amazon, or I’m going to build a better product.” There are a million ways to go about it but those are strategic decisions you make entering or succeeding in a market.

The tactics should contribute to it. And strategy done well is kind of a watershed where everybody contributes to it, if you do it well in the company. Hopefully, you have a bunch of smart people and they should be able to ask, “Is working on X or working on Y more appropriate?”

Nathan/ Then, what is good strategy versus bad strategy?

Carl/ Good versus bad is empirical. It either succeeds or not. If you take a strategy in isolation, but your competition did it three months earlier, it’s not effective. I don’t really care what you measure you business by, but if the decisions you made have an inflection point in terms of how much better you are than your competition, then your strategy was a good one. You can always have a good strategy that’s executed poorly. Companies do that all the time. A good strategy can still be insufficient to out-compete. Depending on how differentiated your strategy is, you can probably tolerate various qualities of execution. Look at airlines.

Nathan/ I’ll go out on a limb and say that most companies have so-so execution, anyway. A lot of them are just lucky to be in an industry or at a time when so-so is good enough.

Carl/ A well-chosen strategy is either something that you can execute on or something you can build the capability to execute well. It would be crazy to say “I have this incredible idea, but your idea for strategy is much better if it’s closer to what you already know how to do and, yes, you’ll probably have to build some skills that you don’t have today.

Nathan/ For someone who’s as skeptical of traditional strategy as you are, you invested a lot into strategy at Autodesk. It was obviously of some value or you wouldn’t have continued to, so how did you approach what was valuable to look at and look for, and then how did you reintegrate that into the operations?

Carl/ At Autodesk, strategy was all around the company. Every group within the organization did strategy on the existing businesses. For example, the move to a subscription model did not come from a the strategy group. Ideas about moving into new markets, how to price or sell our products, or how we should build our products were all strategies developed and executed within the various groups. These folks really knew their customers, products, and markets. They understood the dynamics of all those things in a way that a more independent strategy group wouldn’t. Sure. But, when it came to wholly new things and markets, our internal strategy group functioned in some ways like strategic consultants. They were looking outside the existing business to new conditions we might make use of. And that group was absolutely aligned with the business. The things they uncovered and brought to the business weren’t outside of our intent.

I think in most companies, people don’t actually do strategy. I used to be on the HP board but left because they wouldn’t actually think about their business strategically. They did endless amounts of what they called strategy. But what I saw over the course of my two years there was that they were in two declining industries: computers and printers. They made decisions on this “strategy” but nothing fundamentally ever changed. If the market went down 2% this year, and they only went down 1¾%, they thought “great year!” They never made the really big decisions they really should have been making.

Nathan/ This was like at Apple under Scully and Emilio, who were slicing and dicing the same thing in a zillion ways and confusing the market. 

Carl/ It’s easy to have “strategy” discussions. Every company says they do strategy, but if you really look, at what they’re doing, real strategy is a rare thing. So like, the example I always use is like Microsoft. So if you look at the period, like where Balmer was there. The handful of really big decisions that they needed to make, they never made, I mean, it was still a fortune, I don’t know, five Fortune 10 business, but like the fundamental things of like switching to something else never occurred. Microsoft is another example. During the Balmer years, for a variety of reasons, they couldn’t or wouldn’t make the big decisions they needed to, and they lost a lot of opportunities.

Nathan/ I think Xbox was an important strategic decision for them but they fumbled the Zune. It wasn’t a bad product but while it competed decently against the iPod, it couldn’t yet compete against the entire iPod /iTunes ecosystem. They gave up and ceded the entire mobile space to Apple and, eventually, Google and that was a big misstep. Apple fumbled their first phone, too (that’s the Motorola ROKR for all of you who don’t remember), but they kept up with it. They knew they couldn’t afford to not get into the pocket. It was the right strategic intent with the wrong execution, so, they devised a new approach.

Carl/ Now, where Microsoft really succeeded strategically was their move to the cloud. They doubled-down on Microsoft Cloud and AWS and, now, their AI offerings. Those big, strategic decisions are paying-off. In many companies, there’s this little strategic group working on strategic sourcing, strategic plans, etc. but, while what they’re doing is noble enough because they’re trying to make their businesses better, it’s just not usually strategy.

That’s where most of what my allergic reaction comes from. Look at Google. They dominate search and they’ve effectively built many interest and complimentary services on top of it: Maps, YouTube, Android, etc. Everything mostly contributes to that. But, they knew about AI and machine learning before most people and they’re now tripping all over themselves trying to catch-up to OpenAI and even Microsoft  and turn it into anything resembling a business that will move the needle for them. 

Nathan/ When you compare that to the billions put into VR, it looks like a folly.

Carl/ Exactly. To me, AI over VR seemed like an easy strategic decision. And, it gets to your earlier question: even if you have these questions and things you want to explore, if you can’t connect it to the business in some way, why are you doing it? You can easily see how AI better search but how does VR either rely on search or vice versa?

Nathan/ Going back to that communications question, you’ve been in a lot of companies. How do you communicate well, that strategic intent or understanding or direction, so that everyone in the company can act on it?

Carl/ I think that’s tied to how crisp and clear the idea is. One of the typical failure modes for communicating strategy is that it’s just a jumble of bullshit. 

Nathan/ One of my pet peeves is “corporate values.” Right? Nobody ever says we’re going to be terrible people and make people cry. And yet, like, there’s so many companies that do that. Comcast, for example.

Carl/ Well, sadly, that’s actually a viable strategy. It’s like when Wells Fargo decided to open accounts customers didn’t need in order to generate many more fees. It is their business strategy, but it’s not stated. It may or may not be sustainable, and it may not be good for your brand, but it is an actually strategy. But, if you’re going to do that, at least be honest with yourselves. Most strategy is full of good intentions—and there’s nothing wrong with the ideas. But, they don’t come-out in the actions—the execution.

When Steve Jobs returned to Apple, he looked at the 42,000 products and how many SKUs they had and went nuts cutting, cutting, cutting. It was key. He cut all of the computers down to four! Then, later, they added two more. It was strategically significant on all counts: customers were less confused, the sales channel could support them better, the supply chain was simplified, etc. Being able to say “no” to things is the beginning. I think the “fuck it” list is more important than the bucket list. Executives usually get into a room and start listing everything they think they should do to be successful. What they need to do more is say “no” to the things that defocus their intent. I don’t care what’s on those lists, but you better know what’s on them for your organization. Strategies that only tell you what to do but don’t help you figure out what not to do are not that helpful.

The strategy must, first, be clear about what to do and not to do. Then, it must be tied to execution. If it isn’t, there’s little hope. After both of these steps, then you can talk about communicating it clearly to everyone. Costco’s proposition is “I give you good value for your money.” You may have to buy more than you really want, but it’s like a really good deal. And there aren’t 22 of everything. We select three of the options for you. If we’re going to sell a picnic table, we’re going to go scour the world for the best picnic table, we’re going to buy a million of them and sell them for half the price. That becomes their identity and everyone understands it: customers as well as employees—especially buyers. They know how to execute on that. Everyone knows how to reinforce the strategy.

Nathan/ You said something really interesting that I didn’t expect: “I don’t care what it is.” A lot of leader are prescriptive and even dogmatic about what it is. But, you’re saying, “I don’t care what the things we need to do turn out to be, but I want to know what that those things are—and it has to come from someplace real.” It’s the opposite of what many leaders do, which is to say, “I want to do this so let’s figure-out how to drive it through the organization.”

Carl/ This gets to an interesting question: who in an organization should decide this? There are definitely top-down and bottom-up ways to go about it. And there’s emergent strategy that comes from the masses. I’m pretty agnostic. I just want to make sure it’s being done. That’s why I hire smart people to help look at the business from these different perspectives.

Nathan/ That’s fascinating, to me, because most leaders are told never to be agnostic. They’re told that they have to have an answer—right or not. What I hear you saying is that you want to see all of the ideas from wherever they come. Then, if the decision still isn’t clear, you’ll make sure it’s made.

Carl/ It’s a conceit of executives or CEOs that it needs to be their idea. Now, you can’t be in the situation where the CEO doesn’t believe in the answer or the strategy, but they don’t need to be the originator. That’s actually a crazy idea.

Nathan/ And yet it’s so prominent.

Carl/ Yes. But you know what happens? I figured this out. CEOs run around all day thinking they’re making important decisions. The truth is that if you look over the tenure of any executive, any number of multi-year periods, the number of decisions they really make that change the direction of the company is actually pretty small. You can count them on two hands.

Steve Jobs didn’t conceive of the iPod—or even the iPhone. In fact, he thought the iPod was uninteresting and had to be convinced to give it a try in the market. The iPhone emerged from a bunch of different groups—most of the technology was already in development as the iPad (not yet released). Yes, at some point, Steve gives the go-ahead to put these things into the market but the ideas didn’t originate with him. There were two critical decisions with the iPod. Whether you call them strategic or not, they changed the course of Apple’s ability to compete. It wasn’t the first MP3 player, which we never acknowledge anymore. The first is that they decided to make it Windows accessible. That was very un-Apple (and still is). And, I believe, this, too, was something Steve wasn’t initially in favor of. That was a big thing! They realized that they were at the beginning of a product category and that the pace of innovation was going to be fast. I remember when you would buy one and immediately it would feel out-of-date. They were making huge leaps every generation. The second critical decision was to get into streaming music. That set an entirely new course for Apple around content and services. Some of these big decisions run against the culture.

When I took over as CEO at Autodesk, I still had this crazy notion that I would make lots of important decisions and that things like the culture were a kind of byproduct. By the time I was done, 15 years later, I realized that what you really do is build the culture and hire the people, and the strategy is kind of a byproduct. It emerges from the activities and culture or these great people.

Nathan/ How do you build the right culture?

Carl/ I think there are many forms of corporate governance that lead to successful companies. I don’t there’s one, best way that works for everyone. Apple and Google and Facebook, they’re completely different. Yet, they’re all, Fortune 50 companies. What you need is a culture that’s consistent with the strategy. They inform each other. For example, if you build a culture around reliability and quality, it’s not going to be the place where innovation happens. It would be highly unlikely to expect the people inside a Swiss railroad company to develop a new form of transportation. They probably have thousands of ideas about how to better run the trains. And, even if they did, how would they execute it?

You have mor authoritarian cultures organization and more democratic ones. Ones focused on optimization and others focused on innovation. Nes focused on customers and ones focused on operations. Waymo would never exist inside Apple or Amazon. They just wouldn’t run such a firm unfocused on tangible results.

Nathan/ Commodities companies versus product companies versus service companies all have different cultures, too. I often go back to Jan Carlzon from SAS in the eighties, who transformed the airline around a very simple list: 1. Safety: you do not take-off if it is not safe. 2: On time: you don’t wait for meal or blankets, etc. if it’s going to make you late. 3: Cater to business flyers. If was extremely simple

Carl/ Totally clear principles. We also need to take into account the existing culture and how it all ties together. If people had been beaten-down for 10 years, they aren’t going to be receptive to whatever the strategy is. Part of making your strategy actionable is making sure people feel they have permission to actually take action. They have to trust the organization, their manager, their leaders, and each other. If that’s not there, it has to be fixed before any new strategy can be enacted. That’s why culture is so critical.

Nathan/ OK, if you went into a company that had that had a bad culture, how do you go about changing it?

Carl/ Oh, I think that’s a long, hard process. I was lucky that Autodesk’s culture wasn’t bad when I took over. My predecessor, Carol, inherited a company that was started by about 20 people—bearly all engineers. They were very libertarian and had a set of strong beliefs. Like many founders, they didn’t have much sense of what a real company was or could be. They were grea at identifying the bad parts of companies—what they didn’t want to emulate— but, less good at identifying the good parts. So, in the 10-12 years that Carol was there, she turned it into a professional company. I mean that in the best way possible. She came along and said, “We’re going to have salespeople who are salespeople, and we’re going to have marketing people who understand that as a discipline, and we’re going to have engineering teams who have rigor, etc.” When I came back, that didn’t need to be changed—it was a building block.

The two failings I sought to correct were that we weren’t a technology leader and we weren’t vertically-focused on our customers. There were new companies that did more for their customers within specific industries. As a result, we needed to invent whole, new classes of products and sell them in new ways. Our current resellers couldn’t sell big accounts or many of our new things so we needed to develop new channels, like selling direct and online. That required new people and new skills (along with the new technologies) and, inevitably, a change in culture.

We hired new people, acquired new companies, diversified products, created new channels, etc. and every one of these moves was mt with resistance. We needed people open to trying new things and doing things differently, even when our customers, resellers, and others in these channels didn’t understand it.

There are people who love change and they’ll help you make it. Autodesk’s biggest account was probably a $1M a year. By the time I left, we were doing contracts of $20M, $30M, and $4M. We had resellers (customers) targeting growth of their accounts from $1M to $1.5M when we were envisioning them growing to $20M. We had to help them see what we saw or find others who did.

Let me give you another example: generative design. We asked what would happen when computing became very inexpensive (because we saw that it was). We asked ourselves, “How would we design differently?” We’ve been calling this “computer-aided design” for decades but the computers weren’t actually aiding us, they were just documenting the work of designers. What would happen if the computers could actually start making suggestions due to this new power? We didn’t yet understand what a product would look like that could do that or how it would actually work—or be received. We didn’t know how the algorithms would work or how customers would use these features in their workflow. But, we saw this capability coming. We had this new direction but, culturally, we didn’t yet have the people who were willing to experiment with it.

Nathan/ I want to go back to where strategy lived within Autodesk. Why did it report to the CTO? That’s pretty unusual. Why didn’t they report directly to you?

Carl/ There was an expectation that some parts of strategy lived within all of the groups. Our move to the cloud came from within our distribution group, not our strategy group. Our sales and marketing group pushed-back a little because it disrupted how they currently worked, but they got it. A lot of what companies do under the name of strategy is focused on business development. But, these weren’t the places to look outside the business at new, different things. So, we had this other group specifically-focused on new perspectives. Jeff was the right person to lead that. That’s just how he is. And, he had these great people: Jon, Maurice, and so many others that were looking at future opportunities—but not too far in the future. I could give them credit for the subscription model, maybe, but their real value was looking at design tools for biology, generative design, finding commonalities between our entertainment customers and transportation, architecture, manufacturing, etc.

Nathan/ What you’re saying is  that strategy was distributed within Autodesk.

Carl/ Yes, Every group did some strategy

Nathan/ That’s interesting because that’s the way it should be done. But, I don’t see most companies organized that way.

Carl/ No. This is why I don’t think most companies actually do strategy. I’m sure they have strategic retreats, I’m sure they have presentations on strategy. I’m sure they have vice presidents with strategy in the title. I’ve joked for years ago that when I see a group that says they’re an innovation company, the only thing I’m certain about is that no innovation was going on there. It’s sarcastic, of course, but there’s an element of truth, there. Let’s say you’re running Safeway. I’m sure they have all these meetings about strategy but, as a customer of Safeway, it is not apparent to me in the last 20 years what they’re trying to do. They aren’t competing effectively with Whole Foods or Trader Joes or Amazon or COSTCO. They’re like the Chevrolet or Toyota of supermarkets. They sell a lot of things but nothing distinguished. As a customer, I don’t see their strategy.

But, I can go down the street to Berkeley Bowl, which only has two stores, but it has a really obvious set of values, culture, and experience. All of these companies are clearly different from each other. From the customer perspective, you know why you would go to one over the other. But, Safeway is confusing. They don’t do anything particularly well. Their only real competitive differentiator seems to be locations—they seem to be everywhere there is a cluster or people. They’re just sort of there, in every way.

The question is, if you took over Safeway, what would you do? They probably have the mechanics of running a store down. They can probably tell you sales per square foot, per store, per hour, etc.—the functional stuff. That’s actually a sign of a well-run company. So, from an operational perspective—supple chain, etc.—you’ve got something to work with. The difference is that they need a coherent position and story about why you should go there instead of these other stores.

Nathan/ They’ll also need a new culture to tell and enact that story. Is there anyone at Safeway that’s ready for change or can accept change? You’re going to have to redo everything about compensation, reward systems, etc. Like everything will probably have to change. What would make that possible? In the McKinsey report that classifies 85% of global companies as “zombie” companies, are they able to get out of that category and, if so, what will it take?

Carl/ If you look at the iPod, and then the iPhone, could any other company have created them? Microsoft? RIM? Samsung? Nokia? I’m not sure they could have. They certainly didn’t—not until the iPhone defined the market. But, I’m not convinced it could have come from any other culture but Apple.

And, sometimes, I’m not sure it’s possible to get out of your situation. Take the workstation market: I grew up in the time of Silicon Graphics, Apollo, Digital Equipment, and 10 other very successful companies around the world with 30 more wannabees. It became obvious that whatever these workstation computers did, PCs were going to do. When we look with the benefit of hindsight, we see that the PC business is a shitty business, it’s margins approach zero over time. So, if you were a workstation company, what should you have done? Of course, they were all absorbed so they’re all, essentially, gone. Perhaps, that was the natural, inevitable thing that would happen? There weren’t that many places to go. Maybe you move into chips, as AMD and Nvidia were able to effectively challenge Intel.

It’s a little fatalistic, but I’m not sure it matters. These companies were mostly going to go away anyway. If you look at 15% of the companies doing fantastically and maybe divide the other 85% in half, there’s half of them that probably don’t really have a future, regardless. Like there’s nothing you could do with the assets there. Kodak is like that. Digital cameras were going to eat the film business regardless.

Nathan/ Interestingly, Kodak came to my company in the ate 90s and we built a proof of concept for them around online photo sharing and printing to sell to their leadership. Their leadership didn’t understand the Internet, of course, but was more worried about cannibalizing their film business.

Carl/ This is what I’m saying. Aside from their leadership not understanding where the world was going, even Shutterfly and—all of the rest—never turned into a business that was worthy Kodak. With the exception of Cannon and Nikon, most digital cameras manufacturers are gone now, too. So, if you look at these, did they really have any avenues? What were the escape paths for success?

I was at a dinner with Volkswagen execs several years ago and I brought up electric vehicles. It’s just obvious where the market is going, let alone autonomous cars, driving (or not) preferences, insurance liability, etc. I was curious about their take. They had kooky answers “Yeah, we’ve looked at them, but it’s kind of a California thing.” Now, I’ve been to Germany many times. Everyone I work with lives 14 miles from the city center in some little village. And the idea of being able to charge on either end…it was so obvious. Plus, they’re fast. You jump on the Autobahn going 120 kph and you’re there in three minutes. They don’t even realize that California is really large. LA is 500 miles or more from the Bay Area and we can’t make it there on one charge. But, they just talked themselves into this corner where they just couldn’t see what was obvious to everyone else. Of course, they eventually came around and sometimes it takes change in management, but I do think it’s interesting to think about which companies really do have escape hatches—which have possibilities in the future. The entire time I was in HP, I never saw any thinking that could have given them an effective future. They were focused on better design or a more curvier screen

On the printer side, what was interesting to me is they were expert at microfluidics. These $80 devices put down a million dots of ink, nearly flawlessly. That to me is amazing. And there were a ton of biological applications, but that question was so far afield from where they were, they couldn’t even engage with it. Remember, they were in the scientific instrument business before printers and computers so they even had it in their legacy somewhere.

One of the problems in these firms is the tyranny of the big numbers. The printer business makes $400B a year and some new business could take 10 years to get to $1B. So, they look at this and wonder: “In 10 years it’s going to be one 400th our size, why should we invest?”

Eventually, some other little startup will disrupt the business and they will either acquire them (if they can afford to) or go away. It’s not different than the circle of life. The employees take their ideas and go into other parts of the economy. You take all the nutrients and you recycle them. It’s not easy on their salaries (or anyone else’s in the company, though).

Nathan/ I want to ask about the Autodesk Gallery. In my mind, that was incredibly strategic. What did it do for you?

Carl/ It did a couple of things first. But, first, I need to give credit to ESPRIT. I walked through their headquarters once and Susie Tompkins had her quilt collection up throughout the entire building. This history of textiles and examples of great work were there to acknowledge a legacy of that industry, to represent the quality of art, and to inspire everyone who worked there. That’s where the idea for the Autodesk Gallery came from.

I remember sitting at dinner with several others at Autodesk University. These incredible four days is the one time each year where you feel the power of what we do. You see what happens when you give hundreds of thousands of people these creative tools and you feel like you finally “get” everything. I wants to recreate that in some way that lasted throughout the year. The world knows us as a tool maker and there are only a few people who seek tool museums (and I’m one of them). I’m a nerd that likes to see old calipers, etc. But, that’s a pretty obscure thing. But, the work that our customers did was actually relevant to everybody: the Bay bridge, the Model S, buildings, etc. You could see the Bay bridge from the windows of the gallery! The gallery allowed us to tell a story of our customers and, sometimes, for them to tell their on stories. We were celebrating what our customers could do.

Another thing is that we would visit customers often and they would show us these incredible experiences. BMW took us through their design studio. Boeing took us through the factory and we’d see them testing carbon fiber wings. Frank Gehry showed us models or his latest work. But, when they came to visit us in suburban Marin, all there was were a bunch of software engineers either sitting at desks in Birkenstocks or playing ping pong. They Gallery took us from hosting an experience of staying at the Embassy Suites and walk next door to a place filled with people working at desks to this fun, informative experiences in a world class city with world class hotels and restaurants. We were a world class company but it didn’t look like it, before.

In addition to celebrating our customers, it was an opportunity for them to see what others in our community were making, and their experiments. It wasn’t just the finished models but we showed the blueprints, the AutoCAD files, etc. This was especially helpful in showing the possibilities of new technologies, like the generative design. Customers who didn’t realize the tools could do this, could see their peers, in their industry or not, experimenting in ways that hadn’t occurred to them. It was a visceral way to help them learn. I remember someone from Ford coming in and getting excited about the Avatar work from Hollywood and saying: “We should be doing this for our cars, simulating environments, etc.” And, they did. They built this huge capability for 3D imaging to experience their car mock-ups.

Something special about toolmakers to creative people is that they tell you their deepest secrets because they have a hope that you can help them accomplish their dreams. Okay. I remember meeting Jim Cameron for the first time and asked, “If you guys could do this and this and this and this and this, I could make this!” We talked for eight hours that first meeting. He was trying to make Avatarbut couldn’t because the technology wasn’t quite there. It was the same with Norman Foster and Zaha Habib. They needed the tools to do things they couldn’t yet. Sometimes, the technology already existed even but in a different industry.

Nathan/ You just answered my question about communicating strategy. The gallery was the embodiment  of the strategy, not only for the public, and partners, but for the employees.

Carl/ Absolutely. It doesn’t tell every part of the strategy. We didn’t have exhibits about our financial statements or business model. There were other ways to communicate those parts.

Nathan/ Last question. What is your advice for someone starting a company? What should they worry about strategy and not worry about? You’ve suggested that maybe it doesn’t matter, like how do they know that they’re doing just enough?

Carl/ The one tool you absolutely need is your “fuck-it list.” If you can’t tell me what things are not important to the company, that’s my indicator of whether or not you have a clear strategy. Everybody wants these overly ambitious missions that encompass everything and, at the point that you’re encompassing everything, you’ve lost all focus on what’s important. If you can’t tell me what you’re not going to do I don’t have hope for you. Now, I am totally a believer that this can change over time. Otherwise, you become a calcified company problem but, at the moment, you should be very clear of what we’re trying to do and not do and the things that are in service of those.

Also, I’m not a believer in the Steve Jobs model of product design. It worked for him and probably only him. Nor am I a believer in the Google model: you know, let’s just survey everyone and A/B test everything. My model of development is that there is a set of various feedback loops—some combination of creativity, imagination, intuition, data, expertise, etc. It is a smorgasbord of inputs that the best people figure out how to synthesize together. New ideas are not going to come from a customer, but you need to be sure you have and are serving a customer when you’re done. It’s the difference between a business and a hobby or, maybe, business and art.

These days, I can make whatever I want in my shop. Currently, I’m making a crazy four pound lattice lightweight table, but I’m not trying to sell a million of them. Even if it’s a brilliant approach to making a four pound table, if the world doesn’t need four pound tables, you’re back in the land of hobbies. Make sure that your strategy can serve as a watershed so that when you ask, “Should I do this or not?” The strategy gives everyone in the company the answer. And, it should always distinguish you from your competition, hopefully in a way that increases the distance between you and them.

This interview is from A Whole New Strategy: Everything You Need To Think And Act More Strategically