Words to Live By: Steve Flagg

Steve Flagg, Founder and Chairman of Quality Bicycle Parts

Steve Flagg, Founder and Chairman of Quality Bicycle Parts

In the 36 years since founding Quality Bicycle Parts with his wife, Mary Henrickson, Steve Flagg has been known industry-wide as a leader, an innovator and an advocate. What started as a small, St. Paul, MN-based distributor importing hard-to-find mountain bike parts from Japanese suppliers has evolved under his leadership to include in-house brands (Surly, 45NRTH and Salsa, among others) that have helped build and create new categories in cycling. Along the way, Flagg kept a laser focus on serving bicycle retailers—hiring technically adept customer service staff, bringing shipping times down, and building a user-friendly e-commerce site—and created QBP’s Advocacy, Community and Environment program to expand the presence of bicycles in American culture. While he stepped down as company president in 2015, Flagg continues to be a force at QBP and in the bike industry as a whole. And, just as important, he still rides his bike to work.

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Understanding Michael Porter: The Essential Guide to Competition and Strategy

By Joan Magretta (Harvard Business Review, 2011)
Competitive advantage. The value chain. Five forces. Industry structure. Differentiation. Relative cost. If you want to understand how companies achieve and sustain competitive success, Michael Porter’s frameworks are the foundation. Written with Porter’s full cooperation by Joan Magretta, this new book delivers fresh, clear examples to translate Porter’s powerful insights into practice and to correct the most common misconceptions about them—for instance, that competition is about being unique, not being the best; that it is a contest over profits, not a battle between rivals; that strategy is about choosing to make some customers unhappy, not being all things to all customers.

Flagg’s Take: After reading this book, you realize how badly you misunderstood the word strategy and competitive advantage. Every time I hear the word ‘strategic’ I ask myself, “Do they simply mean ‘important,’ or have they thought this through and are seeking true competitive advantage?” My dad, bless his soul, calculated my many limitations back when I was in high school, and suggested I become a plumber when I grew up. If I had read this book back then, I would have started the best damn plumbing business in the world.

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The Advantage: Why Organizational Health Trumps Everything Else in Business

By Patrick Lencioni (Jossey-Bass, 2012)
"Organizational health will one day surpass all other disciplines in business as the greatest opportunity for improvement and competitive advantage." This is the promise of The Advantage, Patrick Lencioni's bold manifesto about the most unexploited opportunity in modern business.

Flagg’s Take: All of Lencioni’s books are important, interesting and easy to read through, but this one is his signature work. The premise is that anyone can be smart and hire smart people, but if you can add organizational health to your business, now you have built something special. In truth, a business also must have a couple of other things like compelling product and competitive advantage strategies. But still, when we slip up at QBP in regards to our organizational health, we lose great people. When we have our act together, we gain great people. This guy is smart, and the book applies to small and large businesses, alike.

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News of The World

By Paulette Jiles (William Morrow, 2016)
In the aftermath of the Civil War, an aging itinerant news reader agrees to transport a young captive of the Kiowa back to her people in this exquisitely rendered, morally complex, multilayered novel of historical fiction from the author of Enemy Women that explores the boundaries of family, responsibility, honor, and trust.

Flagg’s Take: While waiting for a week’s worth of rain to pass us by in Sedona in January, Mary and I read this book to each other by the fireplace. It is about building trust, being true to oneself and having a life of adventure. Plus, I loved what I learned about American Southwest history. A National Book Award Finalist, this book is simply about having run reading.

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Platform Revolution: How Networked Markets Are Transforming the Economy and How to Make Them Work for You

By Geoffrey G. Parker, Marshall W. Van Alstyne, Sangeet Paul Choudary (W. W. Norton & Company, 2016)

Uber. AirBnB. Amazon. Apple. PayPal. All of these companies disrupted their markets when they launched. Today they are industry leaders. What’s the secret to their success?
These cutting-edge businesses are built on platforms: two-sided markets that are revolutionizing the way we do business. Whether platforms are connecting sellers and buyers, hosts and visitors, or drivers with people who need a ride, Platform Revolution reveals the what, how, and why of this revolution and provides the first “owner’s manual” for creating a successful platform business.

Flagg’s Take: I have to admit, this book is a bit dry. On the other hand, companies like Amazon are disrupting the marketplace and I should understand them. What are the new rules and structures of value creation for these new types of businesses? I read this book, and wondered what it would take for bike retailers to survive and, more, what it would take for QBP to change the role it plays to help retailers to survive. This book started me on series of reads about platforms, hybrid platforms and retail platforms. I think we have a good chance to survive in this new platform economy if we understand the game.