How someone can see what others have not, or what they have ignored, and thereby discover a pivotal objective and create an advantage, lies at the very edge of our understanding, something glimpsed only out of the corner of our minds. Not every good strategy draws on this kind of insight, but those that do generate the extra kick that separates “ordinary excellence” from the extraordinary.

But unless you can buy companies for less than they are worth, or unless you are specially positioned to add more value to the target than anyone else can, no value is created by such expansion.

But it was Stewart Resnick who helped me see another even more important fact about the silver machine—that its advantage, though real, wasn’t interesting.

The silver machine’s advantage gives it value, but the advantage isn’t interesting because there is no way for an owner to engineer an increase in its value. The machine cannot be made more efficient.

In particular, increasing value requires a strategy for progress on at least one of four different fronts:

• deepening advantages,

• broadening the extent of advantages,

• creating higher demand for advantaged products or services, or

• strengthening the isolating mechanisms that block easy replication and imitation by competitors.

In creating strategy, it is often important to take on the viewpoints of others, seeing how the situation looks to a rival or to a customer. Advice to do this is both often given and taken. Yet this advice skips over what is possibly the most useful shift in viewpoint: thinking about your own thinking.