Andrew Hone shares a post that highlights the reasons strategies fail and what to do to implement them successfully.
Developing the strategy is the easy part
You’ve just put the finishing touches to your business strategy. You’ve spoken to customers, researched the key market segments, and projected the financials.
The Board and shareholders are aligned and agree on the priorities to take the business forward.
That was the easy part!
Translating a strategy into action is a significant challenge. All too often, the benefits that were promised are delivered late, or fail to materialise at all.
Management teams get distracted by the day-to-day challenges of running the business. Cross-functional initiatives fall between operating silos, budgets get reallocated and the initial momentum is lost.
High failure rates
If this sounds familiar, you are not alone.
Despite strategy implementation being seen as a key priority by most senior executives, fewer than 15% of organisations consider themselves to be successful when it comes to executing strategy.
Estimates for strategy implementation failure rates range from 50% to 90%.
Our experience in implementing strategy
We have spent over twenty years helping clients translate strategy into action, working with a range of clients from start-ups through to large corporations and public sector organisations.
Through this, we have identified a number of key principles that can help you to avoid common implementation pitfalls.
By applying these principles, strategy implementation can be a more predictable, transparent and repeatable process.
Key points include:
- Why do strategies fail?
- Strategy Implementation Framework
- Underpinning strategy implementation
Read the full article, Implementing Strategy, on ZenithStrategy.com.
Mark Hess shares an article from his company’s blog on the principles of strategy.
In broad strokes, strategy is decision making—but not in the way one might think. The most important part of your strategy is deciding what you’re not going to do.
What is Strategy?
Strategy, simply stated, is how you get from Point A (where you are now) to Point B (where you want to be). You want your organization to grow from $100M to $500M. That requires decisions on which customers to serve (and not serve), what products/services to sell, where to focus the company’s resources and what capabilities you need on your team. It might seem simple to read here in black and white but in practice, it’s not simple; in reality, strategy requires clear and objective data, and often, help from someone outside the business to assess the current situation. Think of it as you would self-diagnosis when you’re not feeling well: sometimes you know what to do and you heal swiftly, but sometimes, when the situation is serious, it’s best to call a doctor—an expert trained to assess, diagnose, and solve the problem.
The same reason you’d trust a doctor to diagnose an illness is the same reason you should trust a consultant to craft your strategy. Consultants make decisions based on clear vision, on sound data, and with no agenda in mind other than helping you get from Point A to Point B. Consultants know what constitutes good strategy and, maybe more importantly, we know how to implement what we know so you can reach your goals.
Key points include:
- Requirements of good strategy
- Big dreams aren’t strategy
- Growing pains
Read the full article, Principles of Strategy, on Maven-Associates.com.
In today’s accelerated pace of business, there are benefits to going slow on strategy execution. In this post, Sean McCoy explains why.
Leaders of all types of organizations – businesses, non-profits, government departments – often want their organizations to move faster. Once leaders develop clear vision and strategy, they want the organization to move as fast as possible in executing the strategy.
We have worked with numerous organizations across various industries on their “speed of execution”, and some patterns have emerged. We have seen 10 common reasons why organizations execute strategies slowly.
Layers – More layers mean more time is spent delegating and not doing. Once work is finally completed by frontline staff, each layer means another step of review. Also, each layer in the org has its own interpretation of the strategy, so more layers means more degrees of separation from the CEO’s original strategy.
Gaps in responsibilities – A CEO provides a clear vision and strategy to achieve that vision, yet organizations can still move slowly because work slips through the cracks. This usually happens because the division of labor for an activity was not clearly defined.
Overlapping responsibilities – When multiple people think a decision or activity is in “their lane”, the organization slows down while ownership is sorted out. Too many organizations are familiar with the turf wars that often ensue.
Unclear communication – When a CEO brings a new strategy, everyone silently asks themselves “what does this mean for me?”. Unclear communications make it difficult to answer this question. As a result, the organization develops a reluctance to embrace a course of action with unclear consequences.
Key points include:
- Culture mismatch
- Excessive hand-offs
- Speed not measured
Read the full article, 10 Reasons Organizations Execute Strategies Slowly, on TheMcCoyConsultingGroup.com
Stephen Wunker provides a concise post that identifies four steps that can help build strategies to expand into new markets.
Market expansion is a goal many executives share, and rightly so. Expanding into new markets is not only a revenue driver but also a way to escape familiar competitive dynamics. It has powered giant success stories, such as Netflix’s entry into video streaming and then content production. Moreover, you don’t need to be a Silicon Valley wunderkind company to make it work. Consider Fujifilm’s transformation from Kodak rival to a $20 billion medical imaging powerhouse, or how Ingersoll-Rand grew from air compressors into markets as diverse as air conditioning and power tools.
But great care is required as dangers abound. All too often, these efforts become pet projects of senior executives, and they scale up before the customer needs or business model are truly worked out. Conversely, they can also linger in a zombie-like state, moving forward aimlessly with an unclear list of priorities, too little funding to spring to life, and no ability to kill off struggling ventures.
Who gets market expansion right? Look to venture capitalists for inspiration. Their profession is to assess new markets and figure out the best bets to make on them. Of course, if you have an established business, you should have a leg up on the VCs, as you have strategic advantages you can also leverage. The trick is to stay market-focused (not inwardly-focused) and not to transpose preconceptions from your existing business into new ones.
So, how do you do it? Here are four steps to expand into a new market:
Key points include:
- Go-deeper techniques
- Strategic theses
- Prioritize market expansion ideas
Read the full article, 4 Steps to Achieve Market Expansion, on NewMarketsAdvisors.com.
Xavier Lederer shares a purposeful post that offers practical steps that can be taken to maximize the efficacy of meetings when the goal is executing the priorities of a strategy.
Many of us hate meetings. Many regular meetings are boring and ineffective indeed. They don’t have the right agenda (or no agenda at all), are not well facilitated, and don’t accomplish much.
Yet the right meetings lead to faster and better decision-making, increase accountability throughout the organization, and improve communication. In short: efficient meetings get your quarterly priorities accomplished. Together with aligning your leadership team around the top 2 to 3 quarterly priorities and measuring what matters, implementing a consistent meeting and communication rhythm enables you to focus and execute on your strategic plan.
How do you go from boring meetings to impactful meetings? Start with a good planning and communication rhythm with your leadership team, which ideally includes 5 meetings:
- Daily huddle.
- Weekly accountability meeting.
- Monthly check-in and education session.
- Quarterly planning and education session.
- Annual planning retreat.
Each of these meetings has a different goal with a different agenda. The key is to maintain the discipline to stick to the agenda and the goal of each meeting. When you do not, meetings get too long, become ineffective, and people start skipping them. For example: While it can be tempting to discuss strategic changes in a daily or weekly meeting, this is not the right place: table this until your next quarterly meeting.
Key points include:
- Synchronizing the team
- Moving the strategy forward
- Aligning key priorities
Read the full post, Meeting rhythm: the key to consistently executing on your strategic priorities, on ambrosegrowth.com.
As civilizations and organizations grow larger, so does bureaucracy, often indicating a slow demise in communication and operations. Kaihan Krippendorff takes a look at a business trend and new organizational model that may indicate a more agile future.
As we reenter the post-Covid workplace, many companies are facing a period of reorganization and restructuring. Our research has forecasted and proven that organizations of the future will need to adopt agile approaches and embrace open, networked structures instead of outdated, top-down hierarchies.
Strategy will become a company-wide conversation, rather than a quarterly report, and employees will be seen as a critical source of creative, innovative advantage. Organizations who learn to establish a culture that inspires continual innovation will be the ones to succeed in the long-term.
GARY HAMEL’S HUMANOCRACY
This transformation of culture is easier said than done, especially after a year of chaos like the one we just endured. When so much of the world is left in the hands of fate and more employees are working remotely out of their own homes, it can be tempting for organizations to grasp for increased controls and regulations. However, employees being left responsible for making their own choices about when and how to work may be precisely the opportunity that leadership needs to realize that they can.
Gary Hamel warned us about the need to reform organizational models. In the near future — and in many cases in the present — bureaucracy will be pushed aside and humans will move to the center of organizations. Many members of our network of chief strategy officers have expressed concern about the struggle to shift to agile development, to bring Scrum and Lean models outside of IT and into all aspects of the organization. Gary suggests that, although these models are correct in methodology — they provide the foundation for speed, flexibility, teamwork, and innovation — they will fail if we do not consider the humans inside of them.
Gary explains that there is no shortage of human creativity: every day 50,000 hours of content appear on YouTube, 3 million blogs are published on WordPress, 40 million photos are posted on Instagram, and 1,300 new apps show up on Google Play. Speed, production, and creativity are everywhere, but our existing organizational models struggle to harness the power of the humans working for them.
Key points include:
- Controlling “controlitis”
- The Haiar case
- The in-ovate model
Read the full article, Bidding Goodbye To Bureaucracy: Future Organizational Models, on Kaihan.net.
David Edelman explains how having an AI strategy can provide a wide range of new variables that can be personalized to the customer journey, helping to speed and scale and make the concept of agile a reality.
Champion versus challenger has been the basis for finding lift and proving marketing value for decades. But we are way past the slower, high-cost operations needed to test direct mail pieces or even direct response TV. To find the right offer, message, or call center interaction on an increasingly personalized basis for digital channels requires multi-variate testing on a massive scale. Even the fastest “war rooms” for rapid test and learn, operations I’ve helped many companies build, suffer if you need analytic experts to create every test matrix, copywriters to draft every word for every variation, and operations managers to coordinate layers of simultaneous tests. And would you even be able to find all the talent you need at an affordable cost?
New optimization tools, powered by artificial intelligence, have already infiltrated the media buying process. And there is an overwhelming range of tools to turn first- and third-party data into targeting plans. But now we can use AI to optimize the personalization of the CONTENT of an interaction. Offer design, words, pictures, conversational interactions, tonality, and hundreds of other descriptors become data that can be measured, matched, and modelled.
Key points include:
- AI as a growth engine
- Enhancing the emotional connection
- Driving a rethink of operations
Read the full article, What’s your AI strategy for scaling Segment-of-One Marketing? on LinkedIn.
While many struggle with switching the focus between work and home, Barry Horwitz has published a post that is the result of a family gathering inspiring how to avoid strategic planning mistakes.
Many years ago, my mother initiated what has since become an annual family tradition.
When my father was about to reach his 70th birthday (he’s closing in on 90 now!), she decided we should gather siblings and families, and all spend a weekend together to celebrate. But where? What kind of place? There are thousands of options.
After some discussion, we agreed on two guiding criteria: It needed to be reachable by a reasonable drive, and we needed to be able to play tennis there. Over the years, that simple “vision” has remained, keeping us focused and narrowing the options greatly. This same kind of approach works well in developing a successful business strategy. It’s not everything, by any means. But by starting with a clear vision of what matters most to your organization, you, too, can greatly simplify the process on the way to achieving your goals.
Unfortunately, many organizations (despite best intentions) struggle in the development of their strategic plans. There are any number of underlying causes for this, but here are three that I come across most frequently.
- Not Enough Detail
I’ve often seen organizations start with a very broad vision statement — something that, in my family’s example earlier, would be similar to “a weekend family getaway.” While this does provide some idea of what is valued, there is not enough specificity to narrow the options and know whether or not you are headed in the right direction. (Volkswagen once stumbled in this way when it set out to become “the largest car company in the world.”)
So, there needs to be clarity on the key elements that constitute success.
Key points include:
- Identifying and describing a few critical goals
- The problem with the strategic plan ‘list’
- The implementation of strategic work
Read the full article, Three Strategic Planning Mistakes To Avoid, on horwitzandco.com.
Umbrex is pleased to welcome H. Nevin Yuksel-Ekici. Nevin has 20+ years of strategy and transformation experience. This includes 11 years at a global enterprise software, hardware and hybrid cloud firm (Dell/ EMC), and 6+ years at Bain & Company. In her last role, she led cross-BU/cross-functional strategy projects, and co-led strategic planning for Dell Technologies. This involved working with the Dell Technologies executive leadership team and cross-functional leaders to identify and prioritize strategic initiatives, as well as clarifying and solving vague business problems through structured thinking and data analytics. In previous roles, she has led market intelligence, go-to-market strategy, and multiple enterprise-wide program offices to drive merger integrations and transformations. She has set up and transformed teams, and helped them achieve strong results in a short time.
Nevin is happy to collaborate on projects related to strategic planning, business strategy, sales strategy and merger integration.
In a series of three articles, Belden Menkus explores the impact of Covid on strategy. This first post explores how to lead your organization forward during times of uncertainty.
“The future is coming at us faster than ever, and its hallmarks are constant disruption and change. Covid has underscored that. Fighting this uncertainty is futile. So how do you lead your organization forward when it’s increasingly hard to know where ‘forward’ actually is?
This is the first of three articles in which I explore the impact of Covid on strategy.
Business leaders make sense of what is happening, for their organisations and themselves. The quality of their sensemaking is a key determinant of success or failure. It shapes the threats and opportunities the organisation sees; it limits or opens out what leaders see as desirable or even possible.
But the impact of Covid-19 has been particularly difficult to make sense of, to come to a wise judgement of what it means. As a leader, you need to step back and ask yourself ‘how am I seeing this – and is that a good way?’.”
Key points include:
- Three mental frames
- Consistency and continuity
- Three steps to move forward
Read the full article, When the picture is blurred change the frame, on LinkedIn.
Barry Horwitz explains why he believes industry experience is overrated and provides examples from Ford, Staples, and health organizations to back up the claim.
“In September of 2006, Boeing executive Alan Mullaly was named the new CEO of Ford Motor Company. Not only did he have zero experience in the auto industry, he drove a Lexus (shocking!).
The hiring decision was widely panned by industry experts and “regular people” alike. But Mullaly wasn’t fazed. When asked how he was going to tackle something as complex and unfamiliar as the auto industry, particularly given the financial shape Ford was in at the time, he replied, “An automobile has about 10,000 moving parts, right? An airplane has two million, and it has to stay up in the air.”
In the end, Mullaly was credited with having led a significant turnaround of Ford, which was also the only major auto manufacturer that didn’t require a government bailout during the great recession.
Industry Expertise is Overrated
When speaking with prospective clients, I am often asked whether I am an expert in their particular industry. While there are a few industries in which I have spent a number of years (e.g., retail, consumer products, health & human services, disease-based nonprofits), there are many more in which I have not.
In practice, however, lack of industry-specific experience is not usually a limitation. While it’s true that some understanding of the industry is critical, an outside resource can draw on the expertise that resides within the client organization, and from speaking with industry participants and analysts.
The truth is, if you are seeking creative and innovative ideas, they often come from looking at things from a different perspective — a perspective that is more likely in the possession of those with experiences across multiple and different industries.
There are many examples of this…”
Key points include:
- The benefit of a broad experience
- The intersection of industry innovation
- Hiring strategically
Read the full article, Respect the Unexpected, on HorwitzandCo.com.
Umbrex is pleased to welcome Kinshuk Kocher. Kinshuk Kocher (KK) started his consulting journey with an internship at BCG. Post his bachelors in economics and a year in risk advisory services with EY, he moved on to McKinsey & Co. He spent a little more than 3 years with McKinsey Global Institute (MGI), the business & economics think-tank of McKinsey. Post that he advised companies across consumer retail, hospitality, healthcare on new market entry & business development before pursuing an MBA from Oxford.
After completing his higher education, he decided to move back to India to get involved with the startup ecosystem in 2017. He founded a health tech startup called Caredose, which tracks & ensures that chronic patients take their medicines as prescribed, every time. Kinshuk primarily focussed on strategy, business development & fund raising and is now increasingly playing an advisory role.
KK is an ardent Liverpool football club supporter and even led a strategic consulting project for the club during his time at Oxford. He recently got married and is living with his wife who is pursuing her PhD in Health Policy from UCLA. Currently, he is advising a new age works platform that is leveraging ML/ AI over whatsapp to transform the way people work.
Kinshuk is happy to collaborate on projects involving business strategy, new market entry, fund raising, financial modeling, startup advisory at a global level and is sector agnostic.
Sean McCoy identifies key steps a business may take to alter the operation model and improve productivity.
We are in the initial stages of a productivity mega-trend. Forced by wage growth and enabled by technology, leading companies are already redesigning their operating models to make their people more productive.
The forces creating the productivity mega-trend
Wages are rising and look set to continue rising. Labor’s share of GDP is at a 90-year low, and we are seeing a reversion to long-run historical averages. 20 states raised their minimum wages in 2018, impacting 17M workers, over 10% of the country’s workforce. New technologies are radically re-shaping the processing of data and the interacting with prospects, leads, and customers. Repetitive work is being automated, and customer engagement is going digital. Extend the evolution of these two trends, wage growth and new technologies, and a firm can expect to experience one of two outcomes over the next business cycle: margin dilution or productivity growth.
How to join the productivity mega-trend
The first step to participate in the productivity mega-trend is to understand which of your business functions will be impacted. Functions with large spans of control and a large share of entry-level positions will be affected the most by wage growth. Functions where “data shuffling” is a common activity will be affected by automation technologies. Customer-facing functions will be impacted by the new customer-experience technologies. When listing functions that meet two or three of those criteria, at the top are functions such as inside sales, customer care, and customer service, and corporate functions such as Accounting, Finance, and HR.
Key points include:
- Wage increases
- How leads and customers interact with business
- Shifts from strategy to execution
Read the full article, The Productivity Mega-trend You Can’t Ignore, on McCoyConsultingGroup.com.
After the disruption of 2020, your business strategies may need to change to accommodate the cultural shifts. Kaihan Krippendorff shares business trends that should be taken into account.
This year, as we recover from a massive shock to all forms of structure and life as we once knew it, we have a chance to create the future. We will dust ourselves off, begin to rebuild, and attempt to return to a sense of normalcy.
However, we ask that you, as Outthinkers, take on this challenge with great care. In 2021, perhaps more than ever before, you will be writing the rules of a new reality. So, as you take your first steps toward shaping this new year, be sure that it is a reality in which you want to live.
Twice monthly, through our Outthinker Strategy Network, we gather a group of top CSOs to deliberate on the most important things on their minds while running a business today. This is not a massive global survey sent to thousands of CSOs asking them to agree or disagree on popular buzzwords or pre-defined topics. Rather, our trends report comes from in-depth conversations and trusted relationships, even if our list may not match up to the latest keywords in the news.
Each week, we will expand upon one of these trends with the intention of supporting your organization’s strategy for the next year and beyond. Our newsletter subscribers will receive early access to each weekly announcement.
Key points include:
- Ecosystem development
- Future organizational models
- Future of work
Read the full article, 2021 Business Trends: The 10 Strategic Shifts That Will Shape Your Industry, on Kaihan.net.
From his company website, Andrew Hone offers a guide on how to conduct a rapid strategic review and identify new value-creating opportunities for your business.
A strategic review is a structured process to identify new value-creating opportunities within a business. This could be about improving the performance of an existing division, or taking advantage of a new market adjacency opportunity. Many companies undertake strategic reviews on an annual basis as part of their strategic planning process. Other businesses will undertake them on a more ad hoc basis when presented with a specific opportunity or problem within the business. A change of ownership or appointment of a new CEO can often trigger the need for a strategic review of the business as a way to clarify the key areas of opportunity and challenges within the existing portfolio.
Whatever its origins, a strategic review should be a clear fact-based analysis of the business opportunity or issue. It provides an opportunity to step back from day-to-day operations to assess the strategic foundations on which a business is built. The outcome of a strategic review should be a clear set of strategic recommendations and a future roadmap for the business that charts its course and enables increased and sustained performance now and for the future.
Benefits of a strategic review
When conducted well, a strategic review can deliver significant benefits to a business. In addition to the direct financial benefits of improving performance and targeting new growth opportunities, the process itself can improve alignment between employees, senior management teams and other key stakeholders, helping to drive a high performance culture and clarity on the future direction of the business.
Key points include:
- Benefits of a structured approach to strategy development
- Typical scope of a strategic review
- Key principles to follow when undertaking a strategic review
- Indicative timeline and workplan for completing a strategic review in 4 weeks
Access the full guide, The four week strategic review, on the ZenithStrategy.com website.
Barry Horwitz explains why developing strategy is even more important when instability and uncertainty are the norm.
‘There has never been a time in which managers did not invoke the idea that the world is changing faster than it’s ever changed before.’
Nitin Nohria, just-retired Dean of Harvard Business School
Pandemic, rampant unemployment, economic uncertainty, climate change, political upheaval.
And that’s just what you’ll find above the fold in today’s newspaper. Given all the turmoil and confusion across the board — about today, let alone tomorrow — is there even any point in developing a strategic plan for your business?
Of course, as someone who trades in strategy, my position on this question is pretty easy to guess: The answer is a resounding YES.
First, because as Dean Nohria and many others have observed over the years, we humans are biased towards believing that change today is happening more rapidly and more broadly than ever before. It’s not. The specifics may be different, but rapid change has always been a given.
Second, it depends very much on what you envision when thinking of a “strategic plan.” If your answer is, “a fancy, dust-gathering binder full of financial projections and dozens of pages of text assembled to spell out specific plans for five years into the future,” then I agree, it’s a waste of time.
But that’s not what an effective strategic plan looks like.
Key points include:
- Strategy to determine purpose
- Strategy is direction
- Strategy recommendations
Read the full article, Is Strategy Still Relevant?, on HorwitzandCo.com.
Balaji Padmanabhan shares an article that explains why executives must rethink the goal of cost reduction in supply chain operations to maintain a competitive advantage.
With repeated disruptions impacting business in recent years—from the financial crisis to severe weather to Covid-19—ensuring continuity of supply has become a top priority for CEOs and Boards. A survey of S&P 500 annual reports shows Supply Chain capability is a growing concern, with new initiatives underway to boost resilience, efficiency and flexibility. Excellence in Supply Chain operations is fast emerging as a major differentiator and a key to competitive advantage across industries.
Historically, most organizations have viewed Supply Chain operations as a “Cost Center” and focused on cost reduction and efficiency gains. For Supply Chain operations to achieve a competitive advantage, executives need to expand their thinking to integrate objectives along the following dimensions:
Managing Complexity – Globalization and the drive to cut costs at each step have created ever-more convoluted paths that, while seemingly cheaper, ingrain complexity and boost vulnerability. Tackling complexity starts with an understanding of the mid- to long-term demand/supply balance, the geographic distribution of customers, product value density, inventory positioning, and supply risk profile. Further upstream, organizations need to take a hard look at the impact of “SKU proliferation” and the net benefit of providing seemingly infinite choice to customers.
Key points include:
- Value-Adding Digitization
- Integrated Planning and Operations
- End-to-End Execution
Read the full article, Supply Chain Operations as an Enabler to Delivering Business Strategy, on LinkedIn.
Nils Boeffel provides key steps you can take to ensure your digital strategy will be successful.
Everyone is talking about digitalization, but many people and organizations get it wrong. To them it means throwing technology at things, hoping that they will get better. What is it really, what does it mean, and how do you think about it and implement it?
Last year I led a digitalization workshop at a company where they were looking to increase their digitization efforts. They recognized the need to move ahead (mainly due to changing market demands and the competitive situation), had several topics already under way, and wanted to “speed things up.” During the workshop it turned out that many things were already being done in different parts of the organization, that there was no central digital strategy, that the digitization was not integrated with their overall corporate strategy, and that the initiatives were taking longer than planned, and not providing the expected benefits.
How could they do it better, and what would it take to successfully define a digital strategy and implement digitalization?
What is digitalization?
The main aspect of digitalization means bringing information (data) and people (the users of the data) closer together, and bringing more data into an easily accessible and usable digital format. Digital data is only helpful if the information is used to provide value, accelerate or simplify processes, aid in decision making (as in KPIs), or help us better understand a topic.
Key points include:
- Three key roles in digitalization
- Phases of digital strategy
- Puting digitalization on the corporate agenda
Read the full article, Digital strategy or digital disaster – how to develop a successful digital strategy, on Boeffel.net.
Aneta Key shares a helpful video and a few doodles that gives insight into the story of strategy development projects. Enjoy!
After a final client workshop, I was inspired to hand draw a couple of characters, outline a comics-like dialogue, digitize my doodles, animate sequence and put to music for a fun retrospective prompt.
This ~2 min video served as a great opener for the project retrospective and a fun project capstone.
If you’ve ever been involved in a strategy project, you may recognize the sentiments — do you?
Key areas of the process include:
- The beginning
- The middle
- The end
Watch more videos, including, The Story of Strategy Development Projects, on the AedeaPartners website.
In this article, Kaihan Krippendorff identifies one major, but hidden, competitor you may not have recognised and explains how this may help you build a more competitive strategy.
If you’ve spent time developing your organization’s strategy, chances are you’re familiar with your competition. You know your competitors’ offerings, their strengths and weaknesses, and how you can deliver where they don’t. But when it comes to preparing for the future, there is one alternative competitor, less obvious but omnipresent, that may not have crossed your mind: nonconsumption. Keep reading to find out why nonconsumption may be a threat to your organization and how to address it.
NONCONSUMPTION: YOUR INVISIBLE COMPETITION
At last year’s Reimagine the Future Summit, I had the opportunity to meet backstage with Efosa Ojomo, Nigerian author, researcher, and speaker at Harvard Business School and the Clayton Christensen Institute for Disruptive Innovation. He introduced me to the concept of nonconsumption as a major competitor in the market.
He explains, ‘Nonconsumption occurs when the vast majority of people in an economy would benefit from access to a product or service, but due to obstacles such as cost, expertise, time, or availability, they are unable to afford the product.’
If left unchecked, nonconsumption can become one of your biggest competitors, but it can also lead to untapped market potential and strategic opportunities.
Key points covered include:
- Your invisible competition
- Four reasons for nonconsumption
- How Chinese virtual currency addresses nonconsumption
Read the full article, Have You Addressed Your Hidden Competitor?, on Kaihan.net.
David Burnie shares a post that explains why now is the time to refresh your growth strategy.
The COVID-19 crisis has impacted businesses worldwide. Globally, governments have put economies on pause, and businesses have shuttered their doors to try and limit the virus’ spread. Factories have idled, and customers have sheltered in place as the world weathers the storm. Whether or not this strict response was necessary, or an overreaction, is a side debate – it happened. As we move from the frenetic pace of survival into recovery, businesses now need to seize the opportunity that has been presented.
Deloitte Canada’s recent September 2020 Economic Outlook noted that Canada’s economic activity is not expected to fully recover to pre-pandemic levels until the second half of 2021. Businesses still operating have withstood the immediate shock to revenues and survived the initial downturn; now they need to leverage this recovery period and set the foundations for future growth.
There are 5 key reasons outlined within this article as to why businesses need to invest now in refreshing their growth strategy:
To convert crisis urgency into future momentum
To gain first-mover advantage on emerging trends
To adapt to a technology-focused market
To take advantage of the robust talent pool
To build resiliency into their strategy
By heeding to these reasons and acting to refresh growth strategy, businesses can position themselves for success in the recovery and post-pandemic world. They will better understand their customers’ problems and what they as a business can do to solve them, thus working towards increasing market share, entering new markets, and growing revenues.
Key points covered include:
- Converting crisis urgency into future momentum
- Gaining first-mover advantage on emerging trends
- Adapting to a technology-focused market
Read the full article, Why Now is the Time to Refresh Your Growth Strategy, on BurnieGroup.com.
Eric Hiller shares how his experience as a new father reminds him of how one has to adjust and adapt using knowledge learned from lean manufacturing and agile product development.
Coronavirus has changed a lot of things in America—especially in urban areas, where there are heightened precautions. It is even more chaotic when you have your first newborn baby, like my wife and me.
Babies are very different from manufacturing floors; however, there are certain processes that must be repeated over and over. Caring for newborns is a good example of how one has to adjust in a rapidly changing customer demand environment—the “customer” being the baby, of course.
Here are some ways that we can apply what we know from lean manufacturing and agile product development to being new parents.
- Understand the customer’s needs and design your product and process accordingly
Excited relatives and friends are showering you with gifts, but you may be confused about what you actually need. The truth is: Less than you think, but how do you know what? Answer: with good product management. Consider the use cases that your newborn has: he eats, he sleeps, he produces copious dirty diapers, and he needs love and comfort. That’s about it.
A useful technique to understand what you really need is by observing a customer proxy in situ. Before your baby is born, ask to visit a friend’s baby for a few hours (virtually during the quarantine). They will love the company and your help. After research, write a use case for the customer, or make a value-stream map. Document the capital, consumables, and info you need to help the customer accomplish their goals.
Points of connection include:
- Product modularity
- Agile meal planning
- Digital Dashboarding
Read the full article, Bringing up Baby, the Lean and Agile Way, on IndustryWeek.com.
Morten Stilling shares an insightful white paper that explains what the SPOT model is and why it can help you through the initial digital discovery process.
The SPOT Model is a simple but powerful methodology for digitalizing your business with a clear outset in your business strategy. It brings out experienced pains and identified opportunities, and observes common themes found across these.
- Strategic objectives guiding your business
- Pains experienced by your organization
- Opportunities identified by your team
- Themes observed across pains and opportunities
When you apply The SPOT Model to your digital discovery process, you get off to a good start on your Digitalization journey.
All activities in a business should take its outset in business strategy. If your business does not have a well-defined and broadly-communicated strategy, stop reading, go develop one, and tell your employees what it means.
Everyone involved in the digital discovery process must be aware of the context within which the process will be undertaken. Is your business, for example, planning to grow organically or through acquisitions? Are you expecting to expand geographically? Do you have cost-down initiatives in the making? Such strategic plans are important to discuss so all involved have a shared understanding of the industry, company, and market position.
Key points include:
- Opportunities identified
- Themes observed
- After digital discovery: prioritization, delivery and benefit realization
Read the full white paper, The SPOT Model for Digital Discovery, on spot-solutions.dk.
Access this resource from Gaelle Lamotte’s company on how to improve your ability to execute strategies by integrating development and planning, driving focus and alignment.
How often do you win with your strategy?
Strategy development is useful for defining ambitions and long term goals. A good strategy is only as good as the capability to implement it and how well it delivers the desired outcome.
Various research concludes:
Organisations on average realise only 50-63% of the financial performance promised by their strategies.
Others suggest that the figure is in fact less than 30%.
Regardless of the data reviewed, it is not good news!
Failure to execute is often a result of poor understanding, and disjointed planning and governance processes.
Key points include:
- Identification of weak governance processes
- Build in-house capability for aligning Operational Plans and Budget with the Strategy
- The dynamic strategy management approach
Access the full PDF, Improve your ability to execute your strategies, from the Strategy Management Partners’ website.
Duane Capuano shares a white paper on the blocks that stop the implementation of strategies and provides a framework for moving a strategy from thought to action.
Countless association executive teams dedicate significant time and resources to strategic planning. But too often, great ideas and plans stay trapped in the notebook and are quickly moved to the backburner – reduced in priority by more pressing day-to-day management and operational demands.
The need for implementation of forward-looking strategic plans is real and more pressing than ever. Today’s association executives face frustrations of plateaued growth, shrinking revenues and inability to move new ideas into action.
Challenge: Finding New Sources of Revenue
Tightened member budgets have contributed to flat or declining membership and lower attendance at annual meetings, and thus, lower association revenue. Associations must create new products, establish new partnerships, and identify innovative opportunities for engagement to stay relevant. But how…?
Challenge: Growing and Engaging Membership
The professional networking available through social media and new priorities of the Millennial Generation demands that associations find new ways of attracting and engaging members. But how…?
Points covered in this article include:
- Building the business case
- Define priorities
- Establishing metrics
Access the full white paper, From Strategy into Action – A Roadmap to Success for Associations, from successroadsllc.com.
Caroline Taich can help you improve your strategic planning process by understanding what drives the differences in the team’s expectations.
Much of my work involves strategic planning. Over the years I have observed that there are different kinds of strategic plans, and different views on what constitutes an excellent plan. This can lead to trouble when it comes with a mismatch of expectations within one team.
I wonder, why is there so much difference? There is probably a long list of reasons. You could argue that variability occurs because the strategy sector does not provide standards like other professions do. You could argue it’s a resource constraint issue – some have more resources to invest in planning, others have less; this affects the workplan, and thus the results.
In my view, though, one of most important drivers of difference is mindset.
Leaders with a strong appetite for change to have a “Growth mindset.” They find themselves aching for more. Some want to serve their base in a new or different way. Some want to solve for a disruption, like a new competitor or even a new CEO. All want to significantly increase their impact. These leaders value a strategic plan with components that include a deep understanding of their target market, current market trends, lessons from others in and outside of the field. They are looking to make a case for change, and new models to realize it.
Key points covered include:
- The growth mindset
- The operational mindset
Read the full article, How to avoid a critical mistake when setting up your strategic planning process, on the Kirtland Consulting website.
Nora Ghaoui examines the limitations of artificial intelligence as it pertains to building a business strategy.
If company strategies risk sounding the same when written by people, what happens when they get written by AI? In this post I examine an AI-generated strategy statement for what it says about the abilities of AI and creating strategies. Three years ago, I asked if large companies all had the same strategy. Perhaps their strategies all sounded the same because managers picked up the same ideas from MBAs and consultants, or because they hired the same copywriters. Last month, a new source of non-differentiating strategy appeared – strategy written by AI.
The AI in question is GPT-3 from OpenAI, which has been getting a lot of attention lately. Here’s a quick introduction to GPT-3: it is a language prediction model that autocompletes text from the input that you give it, like you see when you use Google search. It’s able to complete many different kinds of text, giving it a wider range of application than other models.
Its power comes from its sheer size. It has been trained on a huge amount of text from the internet, and it has 175 billion parameters in which it stores the patterns in that text. Its response to an input is the text that is statistically most likely to come after it. So the more examples it has, the better it can match the input.
Key points covered include:
- Example of strategy written by AI
- How AI and predictive analytics work
- Critical thinking
Read the full article, Can AI Write a Strategy?, on the Veridia website.
From her company blog, Nora Ghaoui shares a two-part series that examines the strategy statements of large companies and explains why strategy writing often results in generic statements.
By the time a large company has finished its strategic planning cycle, it ends up with strategy statements that could apply to any company. The same phrases show up every time. Why is that? Do great minds think alike, are people running out of ideas, or are market trends forcing them in the same direction? Before we get into the causes, let’s look at the strategies.
A.G. Lafley and Roger L. Martin, in their book Playing to Win, emphasise that strategy is a set of five choices: the company’s winning aspiration, where it will play, how it will win, its capabilities, and its management systems. Their expectation is that a successful company has a unique right to win.
Similarly, Michael Porter’s famous article “What is Strategy?” states: “Competitive strategy is about being different. It means deliberately choosing a different set of activities to deliver a unique mix of value.”
Can we see these principles at work in company strategies today? What do the company strategy statements say? For now, let’s take these as correct representations of the company’s actual strategies.
The subject of strategy statements include:
- Where to play and how to win
- Capabilities and systems
Read the full article, Do large companies have the same strategy?, on the Veridia website.
Sean McCoy shares a blog post from his company website that presents a case for and against spending resources on ‘innovation’.
Innovation is hard. Most companies do not do it well. Long is the list of established market leaders that were The Disruptee instead of The Disrupter. But firms are not to blame. Most innovations fail period, regardless of who is doing the innovation. Innovation is a high-failure sport.
Nevertheless, conventional wisdom holds that large businesses should be more innovative. It’s even a famous imperative: Innovate or Die. But why should a firm that is organized around low-failure productivity embrace high-failure innovation? Why should a large company make innovation when it can buy innovation?
The argument against ‘Make it’
There are many reasons why a large firm making its own innovation might not make sense. Finance departments balk at the lost capital that could have been allocated to a known winner. HR departments can be reluctant to promote high-failure entrepreneurs, knowing how poorly that will be received by those that receive the opposite treatment for a string of failures. Audit, Compliance, Legal, and Quality Assurance departments usually do not take kindly to bug-y minimum viable products, nor to operators who move fast and break stuff.
Innovation at a big firm is equally difficult from the perspective of the innovator. The large number of stakeholders slows down decision-making. Once decisions are made, the work itself takes longer than entrepreneurs would like, because a company’s processes involve many hands, and innovators want speed.
Points covered in this article include:
- Making innovation
- Buying innovation
- Leveraging an ecosystem
Read the full post, Should your innovation strategy leverage an ecosystem?, on the McCoy Consulting Group website.
Luiz Zorzella takes a leap into the arbitrary world of luck to explain how unforeseen forces should be considered when shaping strategies.
8 months ago, I drafted an article explaining why you should do a sensitivity analysis of your strategy to luck.
I was planning to publish it in March of this year, because of St Patrick’s.
That draft started with “Now is the time to be bold.”. I pointed out that the largest Canadian banks were trading at 1.3x their book value – suggesting that investors believed that they were better off if banks kept their money as capital, rather than returning it (US banks were not as uniformly good but were doing just fine).
Then COVID happened and I abandoned my draft and now Canadian banks and the largest US banks are trading close to book value.
That is how Lady Luck works. She is a whimsical diva and she does not take sides.
Points discussed in this article include:
- When times are good
- When times are bad
- Applying luck break scenarios to strategies
Read the full article, SENSITIVITY ANALYSIS: LUCK, on the Amquant website.
Aneta Key shares a short message that shines a light into the importance of leaders spending valuable time on scenario planning, and how following military training can guide business strategies.
It is important for leadership teams to regularly work through scenarios across time horizons.
Strategic decision-making is at the core of leadership and is what Aneta Key facilitates among clients. It is also one of the core areas explored in the GrowthKey leadership development programs.
This question is a sneak peek from an upcoming episode of the Simplicity for Success podcast in which host Peter Eckart and Aneta are talking about Strategic decision-making under risk and uncertainty.
Points discussed include:
- Thinking across multiple timelines
- The fog of war
- The death of the best plans
Read the article,The Value of Strategic Planning: Military Analogy, and watch the video on the Aedea Partners’ website.
Andrew Hone’s company blog explains why cost reduction programs often fail.
Although cost reduction programs can deliver a powerful mix of financial, strategic, and organisational benefits, the failure rates of these types of programs are very high. A recent survey of C-Suite executives, for example, found that while 90% of businesses had attempted to implement a cost reduction program, 75% failed to meet their targets, and 44% missed them by more than half.
Drawing on some of the key insights from our new report, the Agile Cost Advantage, in this article we consider some of the main reasons why cost reduction programs are so difficult to get right.
The reasons for cost reduction program failure can be complex, and of course depend of the specific circumstances of each cost reduction program. In general though, we see a number of recurring themes behind these causes of failure.
Points covered in this article include:
- Unrealistic targets
- Cost cuts
- Execution challenges
- Loss of momentum
Read the full article, Why do cost reduction programs fail so often? on the Zenith Strategy Associates website.
Luiz Zorzella shares key points that can help leaders evaluate and address their approach to change to ensure better outcomes.
Strategy & Value
For the past 10 years, financial services firms have publicly acknowledged that they needed to change. Chances are, your organization was one of those.
Commoditization meant a systematic erosion of margins for banks; reduction in interest rates has been challenging both interest and non-interest income sources of banks and investment firms as well as the economics of insurance; and technology has posed a constant threat of disintermediation and radical value-adding substitutes.
However, just like the proverbial frog in the heating water, most business leaders have responded incrementally – aiming at matching the pace of change they observed in the market and improving their results within the parameters of their existing business model.
The problem is that change has arrived and it does not look like we expected. While COVID-19 ravages lives, economies and markets, clients and stakeholders alike are looking at financial service firms and asking that they help them weather the storm. They are calling you to change with them.
Points covered in this article include:
- Find you calling
- Evolve and decommodotize
- Reforge your ways of working
- Take the technology plunge
Read the full article, Is this Crisis Your Strategy Crucible, on the Amquant website.
Gaelle Lamotte was recently interviewed for the Telegraph’s Business Reporter on bridging the gap between business strategy and achieving the best results.
Strategies often fail because there is a lack of a robust, compelling strategic story that hangs off them, there’s a failure of coordination between units and functions, often misalignment, and at the end of the day, there’s a lack of leadership agreement around a common shared purpose, around a common agenda. So as a result, you’ll find there’s a real gap in interpretation between a strategic plan and then ultimately what we get at the end, which is numbers and results.
Points discussed include:
- Goal alignment
- Snapshots of performance
- Reaction to results
- Discipline in execution
Listen to the full interview on Business Reporter, the Human Capital Series.
Geoff Wilson gets straight to the point with some tough love in this article by asking if you to make sure your strategy inspires.
The possibilities are endless. Some might say that the sole purpose is to ‘enhance shareholder value.’ I’d argue that this old trope is no longer the gold standard. Some adhere to the stakeholder model…which might be closer. Regardless of the ‘concept,’ a given business strategy has to appeal to a lot of people.
Strategy, inasmuch as it deals with things that are less certain and immediate, is an argument. It’s an argument formed from assumptions that are (or should be) formed from knowable facts and less knowable (but educated) estimates.
But, something tends to happen on the way to building business strategies that derails one of the most important imperatives. We lose the power of inspiration. Usually, we lose it when the hardcore management nerds get ahold of the strategic planning and implementation ‘ecosystem’ and start over whelming the organization with jargon, tools, and really smart pablum.
Read the full article, Are your people uninspired? Maybe it’s time to hang the DJ., on the Wilson Growth Partners website.