The Innovation Show Michael Raynor on Strategy RAP Model BCE Case Study
Sep 24, 2025
Michael Raynor, a strategy scholar and co-author with Clayton Christensen, dives into why most strategies fail. He explains the Resource Allocation Process (RAP) model and its impact on decision-making. Listeners learn about BCE's diversification journey and how leadership can navigate strategic uncertainty. Raynor highlights the importance of CEO intervention and the challenges of aligning divisional goals with corporate strategy. With insights on managing risks and integrating unique units, this conversation reveals practical lessons for today's business leaders.
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Strategy Is How You Spend Money
- The RAP model says strategy is revealed by how a company spends money and the constraints it imposes.
- Constraints focus organizations but can become pathological when change is required.
Create A Process To Change Processes
- Build a meta-process for changing the resource allocation process so you can break constraints when needed.
- Treat major strategic shifts as third-order changes requiring deliberate overrides, not marginal tinkering.
Incentives Shape Managerial Choices
- Managers respond to the incentives and decision rights they are given, not to vague corporate aims.
- Every incentive set is underspecified so management must tinker with structures and reporting to align outcomes.
