Former Google CEO Eric Schmidt explains why most companies get strategy wrong

“My problem with most strategy conversations is that they’re always inward out [and start with the company’s products first].”

Eric prefers a totally different approach:

“Work very, very hard to figure out what the world’s going to look like in five years. What will people be doing? What will your customers want? Where will costs be? In our case, what will networks look like? How important will phones be? What will the apps look like? And spend an awful lot of time on that. Then take a look at your offerings.”

He cites media businesses as an example of what can happen if you don’t do this:

“There are media businesses that are growing very well and others that are in great trouble. This was completely predicted five years ago… The ones that are in trouble should have done a five year plan and said, ‘Holy cow, what are we going to do?’… Almost nobody does a 5-year plan. Most businesses do a 1-2 year plan.”

Full video: UCLAAnderson “Google’s Chairman Advocates an Iterative Process”