SPOTLIGHT
do entrepreneurs need a strategy?
Some start-up founders follow a businessplan; others operate by the seat of their pants. This package looks at howentrepreneurs can carefully craft a strategy in advance—and whether that’s whatthey should do.
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strategy for start-ups
In their haste to get to market first,write Joshua Gans, Erin L. Scott, and Scott Stern, entrepreneurs often run withthe first plausible strategy they identify. They can improve their chances ofpicking the right path by investigating four generic go-to-market strategiesand choosing a version that aligns most closely with their founding values andmotivations. The authors provide a framework, which they call the entrepreneurialstrategy compass, for doing so.
it’s not about the framework
The Syracuse University professor CarlSchramm argues that contrary to the teaching at many business schools,entrepreneurs really have no alternative to learning by doing.
“Create something and start selling it”
A conversation with the start-up veteransNiraj Shah, Bijan Sabet, and Jennifer Lum, by Daniel McGinn and Walter Frick
HBR Reprint R1803B
How I Did It
strategy
Stitch Fix’s CEO on Selling Personal Styleto the Mass Market
Katrina Lake | page 034
Lake’s experience as a consultant toretailers and restaurants led to a fascination with how untouched thoseindustries were by 21st-century technology. As a lover of both clothes anddata, she felt certain that data could create a better experience withapparel—as long as the human element was preserved.
From the beginning Lake planned to build adata science operation to make Stitch Fix scalable. The company’s revenue isdependent on great recommendations from its algorithm, so its data scientistshave a direct line to the CEO. Data science is deeply ingrained in the companyculture: In addition to client recommendations of clothing, algorithms keepcapital costs low, inventory moving, and deliveries efficient. Productdevelopment has adapted algorithms from genetics to find successful “traits” inclothing. Stitch Fix has even used machine learning to design apparel.
But, Lake says, shopping is inherently apersonal and human activity, which is why human stylists can alter or overridethe product assortment a styling algorithm delivers before the client receivesa shipment.
HBR Reprint R1803A
FEATURES
Operations
Agile at Scale
Darrell K. Rigby,Jeff Sutherland, and Andy Noble | page 088
When implemented correctly, agile innovationteams almost always result in higher team productivity and morale, faster timeto market, better quality, and lower risk than traditional approaches canachieve. What if a company were to launch dozens, hundreds, or even thousandsof agile teams? Could whole segments of the business learn to operate in thismanner?
As enticing as such a prospect is, turningit into a reality can be challenging. Companies often struggle to know whichfunctions should be reorganized into multidisciplinary agile teams and whichshould not. And it’s not unusual to launch dozens of new agile teams only tosee them bottlenecked by slow-moving bureaucracies.
The authors, who have studied the scalingof agile at hundreds of companies, share what they’ve learned about how to doit effectively. Leaders should use agile methodologies themselves and create ataxonomy of opportunities to set priorities and break the journey into smallsteps. Workstreams should be modularized and then seamlessly integrated.Functions not reorganized into agile teams should learn to operate with agilevalues. And the annual budgeting process should be complemented with a VC-likeapproach to funding.
HBR Reprint R1803F
FEATURES
risk management
Managing 21st-century political risk
Condoleezza Rice and Amy Zegart | page 106
Political risk was once relatively easy todefine—more often than not, it involved dictators seizing foreign assets. Todayit comes from a wide array of actors: citizens making videos on cell phones,city officials issuing ordinances, terrorists with truck bombs, cybercriminals,and more. Supply chains are longer—and more vulnerable—and the geopoliticallandscape is more crowded and uncertain.
But just because you don’t know exactlywhere political risk will come from, that doesn’t mean you can’t prepare forit, say Rice, the former U.S. secretary of state, and Zegart, the codirectorfor the Center for International Security and Cooperation at Stanford.Effective risk management is still fairly straightforward. Companies that excelat it are strong in four core competencies: understanding, analyzing, andmitigating risk, and responding to crises.
In this article, Rice and Zegart outlinewhat each competency entails, providing questions that every organization canask to identify gaps, along with case studies that illustrate how companieshave successfully addressed real-world political threats.
HBR Reprint R1803L