This post is an attempt to bring together:
- The four benefit types: increase revenue, protect revenue, decrease costs, protect costs
- Drivers that influence those benefit types
- Sources of downward pressure and decay
- Leverage
- Helmer’s 7 Powers (and other strategic frameworks)
- The lifecycle of strategic advantage(s)
- …all the way to prioritization
Here are the key takeaways from "TBM 384: Prioritization Starts With Strategic Prioritization" by John Cutler:
- Strategic prioritization is foundational: All prioritization is, at its core, strategic. Every decision is a choice that inherently sets priorities.
- Four benefit types frame business intent:
- Increase revenue
- Protect revenue
- Decrease costs
- Protect costs
All investments should tie back to one of these categories, which are essential for business clarity.
- Key drivers for each benefit type:
- Expand market reach or segments (new geos, segments, channels)
- Increase value delivered (new products, bundles, innovation)
- Grow spending from existing customers (upsell, cross-sell, pricing)
- Change revenue models (subscriptions, platforms, M&A)
These drivers are fundamental levers available to any business.
- Downward pressure and decay:
- Competitive markets and time create "downward pressure" that erodes advantages (e.g., market saturation, efficiency gains plateauing).
- Advantage naturally decays as competitors catch up and customers adapt.
- Leverage is critical:
- Leverage refers to investments that compound or create moats—making advantages more durable.
- Some wins are short-term (with little leverage), while others reinforce enduring strengths.
- Strategic Powers counteract decay (Helmer’s 7 Powers):
- Building durable advantages (e.g., Network Effects, Scale, Branding) is key to resisting competitive erosion.
- Strategic power is costly and organizations must choose a few areas to focus and defend.
- Lifecycle of strategic advantage:
- Discovery → Growth → Extraction → Erosion
- Advantages evolve; resisting erosion requires maintenance and adaptation.
- Portfolio mindset:
- Companies should view their bets as a portfolio spread across discovery, growth, extraction, and preservation.
- Not all areas merit equal focus; concentrate on areas with potential for lasting leverage.
- Prioritization done right:
- Anchor prioritization debates in what truly drives benefits and counters decay.
- Focus on magnitude, timing, time sensitivity, confidence, and opportunity costs.
- Prioritize drivers with clear, strategic intent and consider the portfolio of power bets.
- Customer-centric leverage:
- Helping customers achieve compounding advantages strengthens the company’s position as well.
In summary: Effective prioritization is inseparable from strategy. Start by understanding the core benefit types, the fundamental drivers, and counteracting the natural decay of advantage by creating focused, durable leverage. Maintain a portfolio perspective, and ensure prioritization is meaningfully anchored in strategic context rather than vague notions of “value.”