BMW earned record profits in the first quarter of 2011, driven by some important choices by CEO Norbert Reithofer, including decisions to focus on what’s important, own the things they need to own, and partner with others where and when they can. His actions serve as an excellent example of how CEOs and other senior leaders can make strategic choices which close the gaps between business objectives and the current reality.

Focus on What’s Important

Harvard Business School Professor Michael Porter says strategy is choosing what not to do. PrimeGenesis partner Harry Kangis goes one step further:

Choosing not to do something that’s a bad idea is easy. The hard choice is choosing not to do something that’s a good idea – for someone else.

Reithofer is clear on what’s important to BMW, as he discussed during their 2011 annual meeting,

  • To maintain our technological lead in the field of sustainable drive systems with both combustion and electric motors.
  • To pool the most promising expertise within the company.
  • To provide customers with attractive mobility services.

Reithofer rejects the trade-off between sustainability and driving pleasure. As he said in an interview with Spiegel magazine

The concept of premium will be increasingly defined through sustainability in the future. BMW, like no other brand, will still stand for vitality and driving pleasure in the future. But it will also represent efficiency and environmental friendliness.


We have introduced our fuel-saving technology, Efficient Dynamics, as a standard feature in all series. It uses start-stop technology, brake-force energy recovery and other methods to drastically reduce fuel consumption, while at the same providing more power. We call this “Sheer Driving Pleasure 2.0.

Own What They Need to Own

A big part of producing efficient and environmentally friendly cares is achieved through continued investment in the technology of drive systems. They want to be the technology leader and will work to increase profitability to remain independent and stay ahead of Audi and others. At this point, its flagship models are delivering superior experiences to its drivers. BMW’s sales reflect this.

They are choosing not to continue on the Formula One race circuit. It’s more important to maintain its technical lead in consumer cars than entertainment cars.

Partner With Others

It has chosen to cut staff and reduce spending on components and supplies, partnering with Peugeot as part of its “pooling” strategy – particularly on more environmentally friendly efforts.

Additionally, it has brought in experts to help with the environmentally friendly push.  Specifically it has hired a former German foreign minister, Green Party politician Joschka Fischer, and former US Secretary of State Madeleine Albright as advisors to leverage their knowledge and contacts to identify trends early on and manage new emissions laws.

Others trying to navigate our challenging times would do well to take a driving lesson from Reithofer and BMW on how to manage in the context of a rapidly changing environment, hungry competitors and ongoing financial pressures. Record earnings are better than flat tires.

Strategic Choices – Where play? How Win?

At its core, strategy is simply generating and selecting options that will close the gaps between the objectives and current reality. It is about the creation and allocation of resources to the right place, in the right way, at the right time, over time that bring to fruition your mission, vision, objectives and goals while maintaining values.

A simple way to drive strategic choices is by asking two focused questions: Where are we going to play? How are we going to win?  Strategy boils down to selecting which options to pursue and which options not to pursue.

This is a good example of step 6 of The New Leader’s PlaybookEmbed a Strong Burning Imperative

The burning imperative is a sharply defined, intensely shared, and purposefully urgent understanding from each of the team members of what they are “supposed to do, now.” Get this created and bought into early on—even if it’s only 90 percent right. You, and the team, will adjust and improve along the way.

Click here to read about each step in the Playbook

Click here for YouTube videos highlighting each step


The New Leader’s Playbook includes the 10 steps that executive onboarding group PrimeGenesis uses to help new leaders and their teams get done in 100-days what would normally take six to twelve months. George Bradt is PrimeGenesis’ managing director, and co-author of The New Leader’s 100-Day Action Plan (Wiley, 2009). Follow him at @georgebradt or on YouTube.