01 Jun 2016
InkRe: Patrick McGinnis (MBA 2004)Topics:
Handling his first consulting job after years of experience in accounting and academics, Vijay “VG” Govindarajan (MBA 1976, DBA 1978) sat down to sketch out a strategy for his client. Literally written on the back of an envelope, the structure he mapped out for optimal operations—the “Three-Box Solution”—has been his model for 35 years, spanning work with more than 100 CEOs. “It’s really my life’s work,” says Govindarajan, a longtime professor at Dartmouth who rejoined the HBS faculty as a Marvin Bower Fellow this year. He’s captured it in his new book, The Three-Box Solution: A Strategy for Leading Innovation. We talked to him about those boxes and how they apply to everything from bottom lines to personal health. —Dan Morrell
You write about the need for strategies to be simple. When people ask you what the three-box solution is, what is your simple message?
Everything you do can be put in three boxes: one, manage the present; two, selectively forget the past; and three, create the future. Box 1 is competition for the present, and Box 2 and Box 3 are competition for the future. Both are important. The job of leaders is to create the future while managing the present. My simple message to companies—simple to say but not simple to do—is that the future is now.
The simplicity, you note, makes it easier to adopt. The book gives examples of groups ranging from GE to a church employing the strategy.
A department can use it, a corporation can use it, a church can use it, a country can use it. Every organization has two conflicting tasks: One is to optimize what you have today; another is to create what will give you leadership 10 years from now. That’s not a job you can wait 10 years to do. The future comes in daily doses, whether or not you know it. On an individual level, daily exercise is a Box 3 activity. Do it every day, and you are healthy in 2020. The reason it is hard is because if you don’t do it today, it doesn’t hurt you today. It hurts you in 2020.
How does this apply to brand-new startups?
If you are a pure Silicon Valley startup, on day one there is only Box 3. But very quickly, you get into Box 1. Take Square. Its Box 3 opportunity was micromerchants who want to take credit cards but don’t generate enough sales to have an expensive, big credit card processing machine. People thought that this was a tremendous opportunity, and Square would slowly migrate to the small and medium-sized businesses. Suddenly, Apple comes in with Apple Pay, and you have all these new players that are blocking Square from moving up. And it is only a matter of time before Apple comes up with something for the small vendor. People are now saying that Square doesn’t have a future. Given the rapid changes in the technology sector, your Box 3 idea becomes a Box 1 very quickly. Hence the importance of the three-box solution in Silicon Valley.
Campaign veteran Josh King (PGL 2, 1999) on his new book and two other political must-reads for the US presidential campaign season
Off Script: An Advance Man’s Guide to White House Stagecraft, Campaign Spectacle, and Political Suicide
by Josh King
“Campaign and political imagery is manufactured through an assembly line with many hands on it—some of which the candidate controls and some of which he or she doesn’t. For anyone who follows coverage of campaigns on television or in newspapers or online, this is the secret decoder ring for how that process works.”
by Mark Leibovich
“Leibovich understands that the real incumbents in politics are not the office holders; they’re the media. That fourth branch of government is the one that stays in Washington for life, exerting its influence on the way that town works.”
by John Heilemann and Mark Halperin
“Game Change and its successor, Double Down—which will probably be succeeded by another book about the 2016 race—are a new form of campaign reporting. No one can match the way Halperin and Heilemann reconstruct the behind-the-closed-door aspects of campaigns.”
Photo by Neal Hamberg
“FOMO [Fear of Missing Out] and FOBO [Fear of a Better Option] are especially dangerous when you’re first starting to work on new ventures. Part of you wants to get something done, to make that first deal or investment, in order to break the ice and get started. Yet if you give in to FOMO, you risk committing to an opportunity for the wrong reasons. You should only say yes to a project because you believe in its fundamentals, not because you feel pressure to get involved lest you miss out. On the other hand, if you allow FOBO to creep into your strategy, you will waste valuable time waiting around for the perfect opportunity—an opportunity that doesn’t actually exist. There’s no such thing.”
—Excerpt from The 10% Entrepreneur: Live Your Startup Dream without Quitting Your Day Job, by Patrick J. McGinnis (MBA 2004), who is credited with popularizing the term “FOMO” after writing about it in a 2004 Harbus article. The book advises readers to invest 10 percent of their time (and money, if possible) in side ventures that play to their strengths and complement their careers.