First, that in thinking about strategy, one should focus on cash—how much did a business generate, how much consume—rather than on earnings reported for accounting purposes. (Location 881)
At first, Zakon didn’t know how. Then Aldershof ’s idea came back to him. “It occurred to me that the savings account is the growth business; it automatically compounds, but you get no cash out of it. The bond is your stable market-share business that’s throwing off cash and an equal amount of earnings and maintains its value over time. The mortgage is the business that’s declining, and the way you should manage it is to pull cash out.” Those were the three pieces of the corporate portfolio, he concluded, “but since I couldn’t imagine how to deal with three”—perhaps sensing, too, that he was one element short of some sort of elegant balance—“I added the fourth, the wildcat, meaning wildcat well, a pure speculation, either it pays off or it doesn’t.” The consultants then arrayed the four into a four-box matrix, savings account on the upper left, bond lower left, mortgage lower right, and wildcat upper right (figure 4–1). (Location 957)
BCG consultants still waffle a bit on the question of whether the growth-share matrix was indicative, suggesting what you ought to do, or merely illustrative. It’s clear, though, that most practitioners took it the first way. (Location 1048)
Gluck continued to build his reputation as a hound for data—on costs, technologies, competitors—and for more in-depth analysis than the firm was accustomed to. “I told my colleagues we can’t work with the aggregated information we’ve been getting”—typically the numbers generated for the usual financial reports—“because what’s going on is way beneath that level,” he says. (Location 1570)
Ask Porter today how he first became interested in competition, and he’ll note that “probably my defining activity as I was growing up was sports.” He excelled at football, baseball, and basketball. (Location 1821)
