Prior to bringing this column to Augusta Business Daily (ABD), my tenure at ABD began with a weekly feature which was known as “Mondays with Rick.” For that feature, retired ABD writer, Gary Kauffman would interview me on a business topic and then write up an edited version of that interview. Back in January 2023, our topic was how to learn and be more informed about business, and in that interview, I highlighted some recommended business books (e.g., Jim Collins’ “Good to Great” and “Built to Last”), print media (e.g., Wall Street Journal, Barron’s), cable business networks (e.g., CNBC, Bloomberg, Fox Business), and radio programs (e.g., NPR’s “Marketplace”). However, one area I neglected to discuss was podcasts. In today’s column, I want to briefly introduce you to a business podcast I recently began following, and then provide an overview of a book and its lessons on its strategy that were introduced to me by that podcast. Hopefully, those lessons will help you better compete in your markets.
The way in which I typically find new business media to consume is through my current business media consumption, and my “discovery” of this podcast came about in this usual fashion. Early last month, the Wall Street Journal published an article entitled, “The Smartest People in the Room Are All Listening to the Same Podcast,” with the subtitle, “How did Acquired become the business world’s favorite show?” The article discusses how business people from Wall Street to Silicon Valley are obsessed with this podcast that takes deep dives into the histories and strategies of successful businesses. The podcast started in 2016, initially looking at technology firms that were acquisitions (hence the title, “Acquired”), but now has evolved into presenting the stories of various types of successful, large businesses. The most recent episodes include ones about companies as diverse as Starbucks, Microsoft, Hermes, and Danish pharmaceutical company Novo Nordisk. I began my listening of Acquired by listening to its Wal-Mart and Amazon episodes from 2022 and I was hooked!
As I began listening to Acquired, I noticed that near the end of each episode, the hosts, Ben Gilbert and David Rosenthal, would evaluate each company relative to what they called “Helmer’s 7 Powers,” attempting to identify which of the so-called 7 Powers the company possessed. This led me to learn more about the 7 Powers, and their originator, Hamilton Helmer. I ended up buying Helmer’s book, “7 Powers: The Foundations of Business Strategy” and listened to the Acquired episode from December 2021 in which Gilbert and Rosenthal interview Helmer.
When I was researching Helmer’s book, I was surprised I had never heard of him, his book, or the 7 Powers previously. Helmer began his career at Bain and Company and served on the faculty at Stanford’s Graduate School of Business for a decade. His book on the 7 Powers was published in November 2016, but while this work is well known among senior business executives, it has not received as much traction in the academic circles of strategic management. Upon listening to Helmer and reading the book, I would like to briefly introduce you to his 7 Powers and hopefully, you may see how they might apply to your company and enable you to better compete in your markets.
Since we are somewhat limited on space each week, I am just going to be very brief on what the 7 Powers framework is and my descriptions of each of the 7 Powers. You can certainly learn more by reading Helmer’s book, listening to interviews with Helmer, or just searching for more information online and I recommend you do so if this introduction piques your interest.
First, let’s describe the 7 Powers framework. Basically, Helmer indicates that successful companies have “persistent” success that will continue into the future and in order to maintain this persistent success in the future, it must identify specific “power(s)” in its marketplace. The key to understanding these Powers is that each power not only provides benefit to the company, but it also creates a barrier to competitors. Here is a quick overview of each of the 7 Powers. Think of which of these Powers are most applicable to your business and/or which of these you can adopt over time to better succeed in your markets.
- Counter Positioning: A business adopts a new and better business model that existing competitors cannot mimic because if they attempted to copy it, it would likely cannibalize their existing business.
- Switching Costs: Your customers cannot switch to competitors without bearing a significant cost.
- Brand: Your unique brand identity attracts and retains a significant number of customers. A company with “Brand Power” has a higher perceived value than a similar offering due to its historical performance or reputation.
- Process Power: Your company can produce something more efficiently than your competitors, and competitors cannot easily copy how you do it.
- Cornered Resource: Your business has exclusive access to a vital resource, such as unique patent rights or access to a limited raw material.
- Scale Economies: Your company can produce your products more cheaply than your competitors due to the scale of your operation.
- Network Economies: Your product or service provides more value because of how many other people are already using it.
I realize that this listing and the brief descriptions barely scratch the surface of the 7 Powers. In future columns, I will return to the 7 Powers to discuss some examples of how specific companies leverage one or more of these powers. Until then, I hope you will explore Helmer’s book and the Acquired podcast to help unlock the Superpower of your business.
