Remix Strategy: The Three Laws of Business Combinations, by Ben Gomes-Casseres, Harvard Business Review Press 2015
What does remix mean? Are we talking about the combination of disparate cultures - Apple with IBM, for instance, or Microsoft with Intel; each entity brings its own strengths and reinforcing principles, and each brings its own potential for growth and success. Close - here author Gomes-Casseres defines the word to mean the mixing of resources, assets, and capabilities of one organisation with those of another to create value.
Remix Strategy highlights a new valuation and prediction approach that requires a real understanding of what participants bring to the table, sometimes very early in their corporate life:
1. First law: The value created by the combination should exceed the total value that would be generated by the players acting alone. The first law asks these practical questions: How much more value can we create in the market together? What specific resources must we combine to create this value?
2. Second law: The combination must be designed and managed to realize this joint value. Which partners and structures fit this goal best? How do we manage the risk and uncertainty inherent in such combinations?
3. Third law: Each participant must earn a return sufficient to justify the investment. How do we divide the joint value created? How will value be shared over time?
Drawing on tools to help readers drill down on key remix factors, Gomes-Casseres offers assessment to evaluate and research possible combinations, including tools to do the necessary research like Tool 2: Key decisions in remix strategy, Tool 3: The relationship spectrum, Tool 4: Mapping your relational footprint, Tool 5: Sources of joint value, Tool 6: Dissecting the value stack of a business; Tool 7: Finding promising combinations; Tool 11: Assessing partner fit, Tool 12: Designing and managing alliances.
Case examples illustrating his remix principles, Gomes-Casseres looks at corporate partnership examples such as Apple's alliance with IBM, Boston Scientific with Medinol, Coca-Cola. Further, the author introduces the concept of constellations, active combinations of companies in multiple alliances to tackle combined big goals. More than twenty years removed from Michael Porter's ground-breaking and pre-web strategy books, it's possible that coming from the revered Harvard Business School Press, this new approach to strategy - a deliberate approach to managing moving puzzles - may signal the next stage in high-level planning and management in business. We'll see...