Tagged ‘Business‘

Hey, I’ve got a strategy….

It really irks me when strategy is overused or incorrectly used. Too often executives just do not understand how to get from A to B in an intelligent and well thought out way. I suspect much is to do with the entrepreneurial culture that lauds Facebook et al, but I can bet you that right now as a PLC Facebook has a strategy its working to – and its not going to be the word attached to a list of vacuous things!

Here’s an article from Graham Kenny @ Strategic Factors that I’d like to share with you on the topic.

A list of goals is not a strategy!

Let’s say you’re getting together with other managers and employees to develop your organization’s or unit’s strategy. No matter how much discussion and enthusiasm you bring to the task, you’re likely to emerge with a list that looks like this:

  • Growth
  • Superior operational outcomes through efficient work practices
  • Becoming competitive in an existing market
  • Increasing product sales to take market leadership
  • Expanding into other regions
  • Optimizing ROI
  • Developing a service delivery model that incorporates tactical projects


When you’re done, you might scratch your head and reflect: I think this looks OK. It doesn’t. It contains what might be called goals, objectives, actions, and vague statements of intent — but alas, no strategies.

So how do you really create strategy, rather than end up with a hodgepodge list like this? By following these steps:

Identify which stakeholders you depend on for success. It might seem obvious that you’d need to start here. But most managers, even at the world’s largest companies, don’t take this basic step. Instead, they focus on a narrow set of key performance indicators and wade right into developing solutions that feed those metrics, burrowing deeper and deeper into the details. Very quickly they lose their “helicopter view” and get stuck in fix-it mode. Suggestions come one after another: Engage sales outlets. Devise an advertising program. Attract, retain, and develop capable people. Good stuff, perhaps, but how would you know if you haven’t defined a context for success?

Your organization or unit is completely dependent on others outside it for its good fortune. Without the support of stakeholders such as customers, suppliers, employees, and shareholders, for example, you have no organization. But you have to identify those who are key to the long-term survival and prosperity of your organization — and then satisfy them.

Here, we should take a lesson from John Mackey, co-founder and co-CEO of Whole Foods Market. His company has annual sales of $9 billion and more than 300 stores. It dominates U.S. natural-foods retailing and has become an iconic brand.  In a Harvard Business Review interview, Mackey describes what has brought success to Whole Foods. “Customers, employees, investors, suppliers, larger communities, and the environment are all interdependent,” he explains. “Management’s job at Whole Foods is to make sure that we hire good people, that they are well trained, and that they flourish in the workplace, because we found that when people are really happy in their jobs, they provide much higher degrees of service to the customers.  Happy team members result in happy customers.  Happy customers do more business with you.  They become advocates for your enterprise, which results in happy investors.  That is a win, win, win, win strategy.”

Recognize what you want from your stakeholders. Because most management teams don’t identify key stakeholders, they don’t even get to this point. And those that do often launch right into what they need to do forcustomers, for employees, and so on, without thinking first about what they want from them.

Why is sorting out the from so important? What an organization wants from each group of key stakeholders translates neatly into its objectives. For instance, sales and revenue growth will come from customers, productivity and innovation from employees, and quality goods and services at the right price from suppliers. What’s more, company law requires that boards, CEOs, and senior executives act in the best interests of the company. All decision making should stem from that mandate.  Of course, this doesn’t preclude looking after customers’ and other stakeholders’ interests en route.

Although objectives and clear targets aren’t a substitute for strategy, you do need to design them, stakeholder group by stakeholder group, before you can develop a smart strategy for each group. Otherwise, any old strategy will do. Unfortunately, strategies are often created in a vacuum. They won’t be meaningful if you haven’t decided what you want them to achieve.

Recognize what your stakeholders want from you. When management teams delve too quickly into problem-solving, they make assumptions. They think they already know what’s good for their stakeholders. As a result, their companies end up with products and services that don’t sell.

When you articulate what key stakeholders want, you’re defining what I call “strategic factors.” (They’re not the same as “critical success factors” — a term you might already use. Those are generated by your management team, whereas strategic factors come from your stakeholders.) Strategic factors bring an external perspective. They are those few things that you must excel at if you are to achieve a competitive advantage and, simultaneously, meet your corporate objectives.

Here’s a list of strategic factors from a company that manages a port and aims to attract as many ship operators as possible:

  • Port capability (suitability for a ship’s size and freight)
  • Freight availability (to pick up on the return leg)
  • Congestion (speed of unloading and turnaround time in the port)
  • Location (which affects “steaming time,” or time between destinations)
  • Price (port charges for docking and remaining moored)

Note how these are defined from a stakeholder’s point of view, not from management’s. If you’re not sure of them (that’s the norm), interview your stakeholders to better understand their stories and needs.

If you’ve been struggling to develop strategy and write your strategic plan, what you may have been missing up till now is a method. These steps will help. Toyota doesn’t produce defect-free cars day after day without a system. Surgeons don’t operate on hearts and brains without clear procedures. You shouldn’t expect to design effective strategy without a process, either.

So there you have it, your goals are not a strategy. So don’t think goals are all you need!

When faced with a Digital Age Problem…

Quite a lot of articles are written about how businesses can face the era of ‘digital’. Quite a lot of suggestions are made that would form the kernel of a strategic response. Some suggest the need of Digital Platforms (yet leave the specifics undefined); Others suggest revamping existing processes (yet conveniently ignore how to start on that journey); A few even suggest transforming the entire IT department (yet don’t realise that its quite OK to wrap agility around solid reliability).

So its nice to see an article that approaches this ‘Digital Age Problem’ that businesses face in a nice and clear way. I follow a few of the old school strategy houses, digesting what they publish (openly and in books). McKinsey is doing a better job of this than others, say BCG as example. This article is particularly good. Firstly it asks the board of a company to confront six specific decisions (with my comments as to how relevant these are):

  1. Buy or sell businesses in your portfolio? (a business must focus on how to enter any new market or exploit any new channel, don’t pontificate too long)
  2. Lead your customers or follow them? (set a path and move forward, always move)
  3. Cooperate or compete with new attackers? (why not use amazon’s fulfilment, or create a slick app for your brand?)
  4. Diversify or double down on digital initiatives? (what is your ‘attack’ strategy, precise or scattered?)
  5. Keep digital businesses separate or integrate them with current nondigital ones? (how do you manage identity crisis and avoid ‘flash in the pan’ departments)
  6. Delegate or own the digital agenda? (who will sponsor this, and is it something that sits alongside the normal board agenda)

The best part is that the article lays out seven forces (how McKinseyesque!) that one can use to self-evaluate a company position prior to facing the decisions.

What impresses me is that all these decisions defer the technology to a secondary place behind the business objective. Of course, finding a technology strategy is probably the most expensive and difficult decision of them all!

Have a read, you won’t regret it.

BTW the authors are: Martin Hirt and Paul Willmott (@willmottPaul)

Community Planning – City v2.0

It’s not often that I re-blog a TED post, I usually just tweet it. However, this talk from Alejandro Aravena has me intrigued. Having read many articles about participative architecture, both real world and technical, nothing has come close to really showing what could be achieved.

Much in this era is focused around cost-control. Alejandro and his team show how one can still provide dignity to the family unit – the most important of values and feelings – whilst controlling costs.

Watching this, many things went through my mind that relate to the technical realm: Deferred systems design, as mooted by my brother, Agile methods of participatory and shippable releases, Enterprise Architecture and ability to see the whole city as a unified enterprise in need of a singular architecture and investment strategy.

Worth watching for the humanity angle as well as the inspiration for business and technical architecture.