Episode #553: The Soul of Strategy — From Answers to Imagination

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We throw the word strategy around so much that it risks becoming meaningless. Is it a plan? A budget? A list of goals? In this episode of The Soul of Enterprise, Ron and Ed revisit the meaning of strategy through the lens of John Hillen’s book The Strategy Dialogues: A Primer on Business Strategy and Strategic Management.

Strategy, Hillen argues, is not chosen — it’s designed. It’s not about squeezing more juice from today’s orange but positioning for tomorrow’s orchard. From Netflix’s reinvention to Hilti’s leap into tool leasing, from LEGO’s brand extensions to Cirque du Soleil’s circus transformation, we’ll explore how strategy creates sustainable advantage by being different, not just better.

Join us as we unpack the difference between strategy and business models, between planning and thinking, and between reacting to the present and shaping the future. If you’ve ever wondered whether your “strategic plan” is really a strategy, this conversation will challenge, clarify, and inspire.

SHOW NOTES

Segment one

• Today’s show starts with a discussion about “The Strategy Dialogues: A Primer on Business Strategy and Strategic Management” by John Hillen https://www.amazon.com/Strategy-Dialogues-Business-Strategic-Management/dp/3903386286 

• Straight from a review of The Strategy Dialogues, John Hillen: “While after I read most strategy books, I wish I hadn’t because they make no contribution to the theory and practice of strategy, I felt the opposite after reading The Strategy Dialogues.” https://johnhillen.com/the-strategy-dialogues/ 

• “You can never research your way into a strategy. It’s more of a vision. It’s more of an act of creation.” —Ron Baker on today’s show about strategy

• From Ed on the show today regarding different pricing models to support one strategy: We have generally used Apple as a an example of skim pricing. But that’s for their hardware. They are definitely using penetration pricing for their subscription services.

Segment two

• “A clear strategy can act like a boss when the boss is not around.” —John Hillen

• “Strategy is absolutely downstream of vision, mission, and values.” —Ed Kless from show number 553

• “Plans are worthless but planning is everything.” —Dwight D. Eisenhower

• Related to today’s show, Ron and Ed did a show called “Project Management Insights from D-Day”. It’s episode number 491 https://www.thesoulofenterprise.com/491 

Segment three

• “The only sustainable competitive advantage comes from out-innovating the competition.” Nicholas Negroponte

• Ron and Ed mentioned the Blue Ocean Strategy today on the show. In case you missed it, here is a link to the book https://www.blueoceanstrategy.com/what-is-blue-ocean-strategy/ 

• (From 2022) “As Netflix turns 20, let’s revisit its biggest blunder” https://qz.com/1245107/as-netflix-turns-20-lets-revisit-its-biggest-blunder 

• “Do not turn strategic ideas into problems that can be solved.” —John Hillen…  This is why strategy usually turns into a plan.

Segment four

• We would like to thank CalCPA for being a sponsor of The Soul of Enterprise. They are genuinely trying to reinvent what it means to be a state society and you can check them out at CalCPA.org. @Cal_CPA

• “I can’t think of any core competency that’s free. A core competency requires investment. Sometimes, a pretty massive investment” —Ron baker from show number 553

• Also mentioned on the show today: “No Bullsh*t Strategy: A Founder’s Guide to Gaining Competitive Advantage with a Strategy That Actually Works” by Alex M H Smith https://www.amazon.com/No-Bullsh-Strategy-Alex-Smith/dp/1803136510 

• Dr. Jules Goddard: “Strategy is the rare and precious skill of staying one step ahead of the need to be efficient.”

Bonus Content is Available As Well

Did you know that each week after our live show, Ron and Ed take to the microphone for a bonus show? Typically, this bonus show is an extension of the live show topic (sometimes even with the same guest) and a few other pieces of news, current events, or things that have caught our attention.

Click the “FANATIC” image to learn more about pricing and member benefits. 

Episode #552: Gross Output (GO) vs. Gross Domestic Product (GDP): The Top Line of the Economy

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For years, GDP has been treated as the ultimate scorecard of economic performance. But GDP only measures final goods and services. It’s like judging a business by gross margin while ignoring sales.

Economist Mark Skousen’s innovation, Gross Output (GO), fixes that. GO is the “Top Line” of the economy—capturing total sales and revenues at every stage of production, from raw materials to finished goods. GDP, in contrast, is the “Bottom Line,” measuring only what reaches final use. Together, they tell the full story, just as accountants need both revenue and profit to understand a business.

This broader lens matters. GO reveals that business spending and investment drive about 60% of economic activity, with consumer spending closer to 30%—not the oft-quoted two-thirds. It also serves as a leading indicator: GO plunges deeper in recessions and rises faster in recoveries, signaling turning points before GDP does.

For accounting and finance professionals, GO restores the supply chain to center stage and gives us a more accurate, dynamic picture of economic life. If GDP is the bottom line, GO is the top line—and both are needed to grasp the true soul of enterprise.

ICYMI: Mark Skousen first appeared on The Soul of Enterprise in Episode #205 (August 18, 2018), where he discussed the origins of GO, its adoption by the Bureau of Economic Analysis (BEA), and how GO often doubles GDP in scale—even suggesting a leading indicator role for GO over GDP.

SHOW NOTES

Segment one

• Our conversation today started when we had Mark Skousen as a guest on show number 205. More here: https://www.thesoulofenterprise.com/tsoe/skousen

• We asked the intern (aka, ChatGPT) to help us define GDP and use a baseball analogy (image below)

• An easy way to think about Gross Output (GO) vs GDP is that GO is the “top line” and GDP is the “bottom line”. But that’s not quite right. GDP measures the value of final goods/services (image below)

Segment two

• Today I learned: The economist who developed GDP started with Gross Output but he didn’t want to double count anything so all of the intermediary inputs were removed. 

• “Double counting” with respect to Gross Output vs GDP is not a flaw — it’s a feature that measures the real volume of business transactions and transformations. Accounting and finance have no problem double counting, to gauge health of an enterprise. Two reasons why double counting works:

• Products are transformed either in product development or space as they move along the production process

• Businesses are engaging in real economic activity throughout the “double counting” process. B2B transactions are the critical steps in moving the production process along the supply chain toward final use. Firms cannot run a business on value added alone. Double counting counts! No analyst on Wall Street can afford to ignore sales, the top line, and focus on gross margin only.

• Why does Gross Output matter? Policy maker blind spots fail to account for the impact of the entire cycle of a product—from manufacturing to its end use. For example, in the debate on plastics, e.g. Paper, glass, and aluminum uses up far more green-house emissions than the production of plastics. Transportation is also a factor: A paper bag weight is six times a plastic one. The alleged advantages of so-called renewable disappear when assessing them from start to finish.

• Another reason why Gross Output matters: It shows business spending is ~60% of the economy and consumer spending is ~30% — overturning the “consumer is two-thirds of the economy” myth. (Image below)

Segment three

• Gross output (GO) measurement is much more volatile than GDP. GO falls faster in recessions and rises faster in recoveries — making it a better early indicator.

• In 1990, Mark Skousen published “The Structure of Production” and argued for Gross Output as an essential macroeconomic tool, urging quarterly publication. https://www.amazon.com/Structure-Production-Mark-Skousen/dp/0814740502 

• Mark Skousen has a website called Gross Output where you can read more: https://grossoutput.com/ 

• GO BEYOND GDP: INTRODUCING GROSS OUTPUT, THE "TOP LINE" IN NATIONAL INCOME ACCOUNTING - The Schumpeter Lecture https://papers.ssrn.com/sol3/papers.cfm?abstract_id=5002052 

• Steven Landefeld (BEA director, 2014): Gross Output offers “a powerful new set of tools… closer to the way many businesses see themselves.”

Segment four

• Finn Kydland (Nobel laureate): Gross Output “creates a more dynamic and broader view of the economy” by integrating the supply chain.

• David Colander: Gross Output “may be more helpful than GDP for forecasting, because it provides information on goods in process.”

• The value of a $5 cup of coffee and it’s Gross Output impact (image below)

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Bonus Content is Available As Well

Did you know that each week after our live show, Ron and Ed take to the microphone for a bonus show? Typically, this bonus show is an extension of the live show topic (sometimes even with the same guest) and a few other pieces of news, current events, or things that have caught our attention.

Click the “FANATIC” image to learn more about pricing and member benefits. 

Episode #551: Catchall Chaos

NEW SHOW FEATURE: We are now LIVE streaming our shows. Want to join us live? Just click this link every Friday at 3pm ET / 12pm PT.

Sometimes the best conversations come from the stories that don’t neatly fit into a single theme—but are too good to ignore. In this week’s episode of The Soul of Enterprise, Ron and Ed bring you a lively grab bag of pricing and business news, insights, and oddities they’ve collected from around the world. From surprising trends in how companies set prices, to cautionary tales in leadership, to the occasional “you-can’t-make-this-up” moment from the marketplace, no topic is off limits. Tune in for sharp commentary, unexpected connections, and a little controlled chaos.

SHOW NOTES

Segment one

• The Dissident Beijing Can’t Break by Father Robert Sirico https://www.thefp.com/p/the-dissident-beijing-cant-break-jimmy-lai-hong-kong 

• “As my friend Jimmy Lai would be the first to tell you, the trial isn’t really about him at all. It’s a test of the seriousness of Western democracy.” —Father Robert Sirico in the article “The Dissident Beijing Can’t Break” via The Free Press https://www.thefp.com/p/the-dissident-beijing-cant-break-jimmy-lai-hong-kong 

• “Delta Bets Big on AI for Ticket Pricing—But Is It Fair to Travelers?” https://businesstravelerusa.com/news/delta-ai-pricing/ 

• If you want to hear more of Ron’s thoughts on AI airline ticket pricing, check out the most recent episode of The Woodard Report Podcast in which Joe Woodard asked Ron about this. https://report.woodard.com/articles/pricing-ethics-from-airplanes-to-accounting-practices-twrpod-opgwr @WoodardCompany 

Segment two

• A friend of the show, Wealth Rabbit, received a big shoutout today on the show. Stress free retirement benefits, tailor made for small businesses. #NotAnAd #JustCoolPeople https://www.wealthrabbit.com/ @wealth_rabbit 

• Check out Fetcherr.io and what Ed saw immediately on their site which is, “Generative Pricing Engine, Fetcherr’s groundbreaking GPE leverages AI to generate optimal market moves, creating a strategic pricing edge for your business.” https://www.fetcherr.io/ 

• “I don’t see it much different than an insurance company charing Evil Knievel more money than me.” —Ron Baker on dynamic pricing

• The NY Times claims 6 myths about social security (https://www.nytimes.com/2025/08/10/business/social-security-retirement-myths.html). Dominic Pino of the National Review shows that 5 of those myths actually are true (https://www.nationalreview.com/corner/five-of-six-social-security-myths-in-nyt-article-are-actually-true/) 

Segment three

• A government funded grocery store in Kansas City spent $17M. And then they shut down. https://www.kansascity.com/news/business/openings-closings/article311681208.html 

• Corporatism does NOT mean “ruled by corporations”. It is is an ideology and political system of interest representation and policymaking whereby corporate groups, such as agricultural, labour, military, business, scientific, or guild associations, come together and negotiate contracts or policy (collective bargaining) on the basis of their common interests. https://en.wikipedia.org/wiki/Corporatism 

• “The Cult of the Presidency” by Gene Healy https://store.cato.org/products/cult-presidency-2024 

• “A household expenditure approach to measuring AI progress” by Tyler Cowen https://marginalrevolution.com/marginalrevolution/2025/07/a-household-expenditure-approach-to-measuring-ai-progress.html 

Segment four

• “Just 21% of respondents were satisfied with the state of the NHS, while 59% were dissatisfied” — This is from “The Collapse of Britain’s National Health Service” by Jake Scott in the Foundation for Economic Education https://fee.org/articles/the-collapse-of-britains-national-health-service 

• “After the Spike: Population, Progress, and the Case for People” https://afterthespike.com/

Bonus Content is Available As Well

Did you know that each week after our live show, Ron and Ed take to the microphone for a bonus show? Typically, this bonus show is an extension of the live show topic (sometimes even with the same guest) and a few other pieces of news, current events, or things that have caught our attention.

Click the “FANATIC” image to learn more about pricing and member benefits. 

Episode #550: THRESHOLD and The Revelation

NEW SHOW FEATURE: We are now LIVE streaming our shows. Want to join us live? Just click this link every Friday at 3pm ET / 12pm PT.

On their first independent episode, Ron and Ed will share some thoughts on the new format, the transformation economy, their new entity (THRESHOLD), and their Jerry Maguire mission statement to the professions entitled The REVELATION. 

From the Preamble

We affirm that the raison d’être of business is not profit, but human flourishing. Profit is the echo of value well delivered, the index of one's contribution to the health, wealth, wisdom, purpose, and meaning of others. It is a signal of trust earned and lives elevated. But profit is not the aim. It is the applause, not the performance. It is evidence, not essence.

SHOW NOTES

Segment one

• Here is the full Threshold REVELATION document referenced by Ron and Ed today https://thresholdnow.com/revelation 

• The Threshold REVELATION is inspired by several factors. One of them is spiritual. Fun fact: The Hebrew word for "vision" has several nuances, with the most common translation being chazon. This word can refer to a physical sight, a dream, a revelation, or an oracle.

• “We write not merely as reformers of practice, but as heralds of a new economic era—the Transformation Economy.” — a direct quote from Ron and Ed’s Threshold REVELATION preamble. More here https://thresholdnow.com/revelation 

• Ron and Ed said this today on the show in reference to the Threshold REVELATION: “This is not only scripture but also a strategy”

Segment two

• “Profit is not purpose, it is result.” —Ed Kless on today’s show

• Ron and Ed referenced the book, The Experience Economy by Joe Pine and James Gilmore, on the show today. More at this link https://www.amazon.com/Experience-Economy-Updated-Joseph-Pine/dp/1422161978 

• “Professionals, take heed: We are no longer in the business of solving problems, or providing products and services that are increasingly becoming commoditized in our rapidly changing world. We are in the business of helping people thrive. We are not here to fix; we are here to guide.” — from the Threshold REVELATION at this link https://thresholdnow.com/revelation 

• "Early to bed and early to rise, makes a man healthy, wealthy, and wise" —Benjamin Franklin

Segment three

• “If you are a professional, what is it that you profess?” —both Ron and Ed at various points when speaking about the transformation economy

• “Burnout is the name we’ve given to our soul’s rebellion against misalignment. But the deeper truth is moral injury—when professionals, compelled by outdated business models, act in ways that betray their sense of duty, care, and craft.” —from the Threshold REVELATION at this link https://thresholdnow.com/revelation 

• If you replaced all of the lightbulbs in your house and 50% of them went out, would you blame the individual bulb? No. You would determine that you have a problem with the electrical system. In the case of moral injury (sometimes incorrectly called burnout), the electrical system is the business model.

• “Work-life balance” is not a great term. Work is not a burden. The Hebrew word for "work" is avodah. It also encompasses the concepts of "worship" and "service". This word is used to describe both the physical act of working and the spiritual act of serving God. 

Segment four

• Productsandservices say, “Look what we can do.” Transformations reveal, “Look at who you can become.”

• The final section of the Threshold REVELATION is called “OUR SUMMONS”. Here is a direct link  https://thresholdnow.com/revelation/summons 

• The show today was focused on a document written by Ron and Ed called, “THRESHOLD: A REVELATION for the Transformation Economy” Read the full version at this link https://thresholdnow.com/revelation 

Bonus Content is Available As Well

Did you know that each week after our live show, Ron and Ed take to the microphone for a bonus show? Typically, this bonus show is an extension of the live show topic (sometimes even with the same guest) and a few other pieces of news, current events, or things that have caught our attention.

Click the “FANATIC” image to learn more about pricing and member benefits. 

Episode Teaser: A New Beginning

NEW SHOW FEATURE: We are now LIVE streaming our shows. Want to join us live? Just click this link every Friday at 3pm ET / 12pm PT.

Ron and Ed (well, just Ed, really) announced their transition from VoiceAmerica to their own platform. The show will continue streaming on Fridays at 3 PM Eastern/Noon PT, with the streams available at thesoulofenterprise.com or thresholdnow.com/tsoe.

In addition to a few announcements, Ed shares the audio version of the Preamble to the REVELATION - a mission statement outlining their vision for the Transformation Economy focused on human flourishing.

We are also seeking new sponsors and invite emails at asktsoe@thresholdnow.com.

SHOW NOTES

Given that this is a 7-minute teaser episode the show notes are as follows: Please listen to the episode for show notes. (I crack me up)

Bonus Content is Available As Well

Did you know that each week after our live show, Ron and Ed take to the microphone for a bonus show? Typically, this bonus show is an extension of the live show topic (sometimes even with the same guest) and a few other pieces of news, current events, or things that have caught our attention.

Click the “FANATIC” image to learn more about pricing and member benefits.