# Better, Simpler Strategy **Felix Oberholzer-Gee**  --- _Ask one question for every initiative: does this raise WTP or lower WTS?_ Most strategy frameworks add complexity. Oberholzer-Gee removes it. The entire discipline reduces to two levers: raise customer willingness-to-pay, or lower employee and supplier willingness-to-sell. If an initiative doesn't move at least one of those, it isn't strategic, regardless of how well it's executed or how much effort it consumes. The companies that perform best don't think about themselves first. They think about how to create value for others. Profit follows from value creation; it doesn't cause it. This sounds obvious and turns out to be rare in practice. --- **The [[Value stick]] is the simplest possible mental model for strategy.** WTP sits at the top: the maximum a customer would ever pay for your product. WTS sits at the bottom: the minimum compensation employees and suppliers require to participate. The gap between them is value created. Price sits somewhere inside that gap, splitting the value between the business and its customers. Everything strategic is about lengthening the stick or improving where price sits within it. The question "if your company disappeared tomorrow, who would miss it?" is doing real analytical work here, not rhetorical work. If no one would genuinely miss you, your value stick looks like everyone else's. Without meaningful differentiation, excess returns are accidental and temporary. --- **[[Complements]] is where most strategists leave money on the table.** When the price of a complement falls, WTP for your product rises. Value shifts across the system. Companies that produce their own complements can shift profit pools deliberately from one to another. Most strategic analysis focuses obsessively on the core product while missing the larger system that surrounds it. Two extreme pricing options clarify the thinking: what happens if you make bulk margins on the main product and give away the complement? What if you reverse it? Each scenario changes how much competition you face and where the profit sits. --- **Price sensitivity is feedback, not a market condition.** When customers are highly price-sensitive, the temptation is to blame the market. The correct interpretation is that you haven't differentiated enough. Tough customers are telling you something. Near-customers are worth more attention than most companies give them. These are people whose WTP is fairly close to the level required to make a purchase. Understanding what's stopping them reveals substantial opportunities, and often the barrier is perception rather than the product itself. On the supply side, employee surplus is the gap between compensation and WTS. You can increase it by raising pay or by making work more attractive. Just as raising WTP requires genuine understanding of customers, lowering WTS requires intimacy with how your people actually experience their work. --- **Better execution is no substitute for sound strategy.** This is the [[Execution trap]] in a single line. Operationally excellent firms consistently outperform on productivity and growth, but operational excellence and strategy are different things. The question isn't whether a project falls into "strategy" or "operational effectiveness"; it's whether it can raise WTP or lower WTS. If it can't pass that test, cut it and redirect the effort. The counterintuitive note on new technology: we routinely predict substitution when the more common outcome is that new technology increases WTP for existing products. The bias toward catastrophising disruption is systematic and usually wrong. ---