Tag Archives: Strategic Management

Design and implement the ideal customer experience

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Wouldn’t it be great to know what your customers need before they do? This is especially true in the era of social media, where customers voice their opinions on your company and products in ways that can hurt or help your company directly.

Bill Thomas, co-author of Anticipate, claims to have the methods to make this happen. In his own words Thomas promises “proven guidance on how to design and implement a customer-focused journey that moves beyond the transaction and satisfied customers, to a relationship and culture that creates and leverages loyalty – and the profitability that comes with it.”

Thomas’ 10-point framework was created to guide companies in charting a customer-focused journey that matures, anticipates and delivers increasing levels of loyalty and profitability with their customers, and across their broader value chain.

As one example he sketches out the typical strategic planning process, versus one focused on the customer. The plans speak for themselves:

Fiscal Budget –> Existing Capabilities –> Strategic Goals –> Customer Actions

Customer Needs –> Strategic Goals –> Needed Capabilities –> Fiscal Budget

If you’re looking for a more thorough customer strategy, then you’ll want to join us on June 19th for a conversation with Bill Thomas at our Soundview Live webinar, Knowing What Customers Need Before They Do. Bring your questions for Bill as well, which he’ll answer during the event.

How to Create a Culture for Market Dominance

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UNRELENTING INNOVATION

PRACTICE MAKES PERFECT WITH INNOVATION

In the excellent 2001 book Will and Vision, Gerard Tellis of USC’s Marshall School of Business and co-author Peter Golder of Dartmouth’s Tuck School of Business documented how latecomers to an industry can successfully attack and knock off entrenched incumbent companies, no matter how large and successful they might be. In his new book, Unrelenting Innovation, Tellis looks at the other side of the coin, explaining how successful incumbents can avoid losing the leadership of their industries. After years of research, Tellis has identified three traits of a company’s culture that ensure continued success: the willingness to cannibalize successful products, embrace risk and focus on the future. In Unrelenting Innovation, he details these three traits, then explores the three practices — providing incentives for enterprise, empowering product champions and encouraging internal markets — that create the innovative culture based on the traits.

Who Wants to Be a Cannibal?

In an early chapter of the book, Tellis quotes Howard Stringer, the former CEO of Sony: “Love affairs with the status quo continue even after the quo has lost its status.” Sony invented mobile music with the Walkman, only to let Apple and its iPod take over. The problem facing incumbents is even more complex because, to use Stringer’s terminology, the quo doesn’t visibly lose its status until it’s too late.

Tellis proves convincingly that only a company whose culture enables the cannibalization of successful products will stay on top. Unfortunately, there are myriad reasons why cannibalization is difficult. Kodak is a simple and sad case: It didn’t move into digital photography (which it had already developed!) so that it could continue selling film. Sony’s case is a bit more complex. It was clear that MP3 was the future of mobile music, but Sony had also through joint ventures and acquisitions become directly involved in music publishing and movie production — industries in which piracy is a threat. Sony included safeguards against piracy in its MP3 players, making them less user friendly. Consumers went elsewhere.

With equal depth, Tellis explores in the other two traits of innovative companies the nuances of what might seem as clear-cut directives that in reality are complex and often hampered by not always apparent biases.

Three Practices

In the second part of the book, Tellis describes the three corporate practices that can engender the three traits of innovative companies. The first practice is to provide incentive for enterprise — once again a seemingly simple and clear directive hampered in the real world of business by what appear to be logical considerations. It does make sense, after all, that a very successful company with a large and happy customer base would design its incentives around customer loyalty. Such incentives, however, are not going to spark the innovation and creativity that truly keep customers. Tellis advocates “asymmetric” innovation incentives: strong rewards for success and weak penalties for failure. Understanding the psychology of incentives is equally important. Subsequent chapters cover fostering internal markets and empowering innovation champions.

Each chapter in Unrelenting Innovation is carefully structured, with an explanation of the topic, a series of supporting case studies and a final concluding section. The framework that Tellis has created is an insightful and valuable map for those companies looking to emulate such star names as Apple — or to avoid the fate of Sony, the once-admired innovator that Apple tumbled from its perch.

Can Conflict Cause Creativity?

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Conflict is often viewed as one of the biggest roadblocks to achieving a shared goal. There are many instances in which it can bog down or completely derail a project from reaching completion. However, consultant Lina M. Echeverria, author of Idea Agent: Leadership that Liberates Creativity and Accelerates Innovation, argues that there is a hidden benefit to conflict: it can help your team achieve creative breakthroughs.

In a recent Soundview Author Insight interview, Echeverria addressed the concerns leaders have about conflict:

Conflict is one of the things that scares most leaders because it doesn’t feel good.  We have always been conditioned from early childhood not to fight.  Be good.  Be nice.  And it is not about encouraging fighting; it is about encouraging dialogue.  It is about encouraging the ability to disagree, to give other viewpoints and engage in a dialogue.  But as I say, it really feels in the pit of your stomach like, “Ugh, I don’t want to be here.”  So, what it takes first is a lot of courage once you have come to the realization that that conflict is an essential part of the creative process.

It is an essential part because people that are creative, that have a really good idea that others have not seen, are driven by this vision.  And this vision can be very, very powerful and they’re not going to stop because of any barriers until they achieve the mission.

So, when those viewpoints come from a different angle, you could have a lot of passion, each [person] pulling in a different direction or let’s say, pushing towards the center and trying to make [his or her idea] happen.  So, what is needed is to bring them to the team.  Have them understand that theirs is not the only way and that they need to learn to respect others while at the same time, helping them understand how their behavior can impact the dynamics of the team and can push others down.

Soundview subscribers can login to their online library to hear the complete interview with Echeverria. The Soundview Executive Book Summary of Idea Agent is available for download now.

How Strategy Really Works

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PLAYING TO WIN

LEARN TO WIN FROM AN ALL-TIME GREAT CEO

A.G. Lafley knows something about successful corporate strategies. As former CEO of Procter & Gamble (P&G), Lafley, with the help of strategic adviser Roger Martin, doubled P&G’s sales and quadrupled its profits. In Playing to Win, Lafley teams up with Martin, now the renowned dean of the Rotman School of Business in Toronto, to outline a step-by-step process for developing and implementing a successful strategy.

The Five Choices

This process is built on a set of five integrated choices. “These choices and the relationship between them,” the authors explain, “can be understood as a reinforcing cascade, with the choices at the top of the cascade setting the context for the choices below, and the choices at the bottom influencing and refining the choices above.” One of the first examples used in the book is P&G’s Oil of Olay product, once a floundering brand known derisively as “Oil of Old Lady.” Building on their framework, Lafley and Martin break down the cascade of strategic choices that led to the brand’s impressive turnaround. Here are a few of them:

  1. What is our winning aspiration? This choice refers to “the purpose of the enterprise,” the authors write. For Oil of Olay, it was to become a leading skin care brand again.
  2. Where will we play? This second choice identifies specifically where the product or company will compete. The Oil of Olay brand stayed with its mass market retailers (e.g., Target and Wal-Mart) rather than the prestige stores (e.g., Macy’s). But it positioned itself as a “masstige” product — higher end (and higher priced) than the traditional mass market beauty product.
  3. How will we win? This question must be answered with a clear value proposition and a path to competitive advantage. Among Oil of Olay’s winning strategies was producing a better anti-aging skin care product — a product at the right price (e.g., not too low) that would entice the prestige customer base.
  4. What capabilities must be in place? The task here is to define the activities and competencies that support the where-to-play and how-to-win choices. Oil of Olay, for example, was able to leverage P&G’s strengths in consumer understanding and brand building.
  5. What management systems are required? Likewise, strategists must define the systems, structures and measures required to support the choices. Oil of Olay was also able to leverage P&G’s systems as well as its channel and partner systems.

This framework can be applied at all levels of the company, including the organization level, strategic group or, as in the example above, the single business unit, the authors write. Clearly, the choices need to support each other among the different levels.

A Do-It-Yourself Guide

While most of the book is dedicated to the five-choice framework, Lafley and Martin offer two additional tools to support the strategic choice process. The first is a structured methodology for analyzing the company — specifically its industry, customers, relative position to competitors and the potential competitor response to your strategic choices. The authors also offer a “reverse engineering” process to test potential strategic choices.

Tools, of course, can go only so far. Reading this book will not make you into another A.G. Lafley — his success at P&G is much more than a function of methodologies. However, by helping strategists focus on the important where-to-play and how-to-win questions, Playing to Win is an invaluable map that gives business leaders at least a fighting chance for a successful journey.

How Breakthrough Ideas Emerge from Small Discoveries

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When you think of great inventions from the past, do you picture the inventor with a light bulb image over their head crying “eureka!”?  Whether it’s the automobile, light bulb, airplane or iPod, our tendency is to think of these as breakthrough concepts that came in a flash of brilliance. But that couldn’t be further from the truth.

Thomas Edison tried over one thousand different materials for his light bulb filament before he found one that would stay lit without burning up. And so it has been with many of the great innovations throughout history.

Peter Sims, author of Little Bets, puts it this way, “…all of them have achieved remarkable results using a surprisingly similar approach: methodically taking small, experimental steps.” He continues, “Rather than believing they have to start with a big idea or plan a whole project out in advance, trying to foresee the final outcome, they make a methodical series of little bets about what might be a good direction, learning critical information from lots of little failures and from small but significant wins that allow them to find unexpected avenues and arrive at extraordinary outcomes.”

Among the methods that Sims discovered as he researched these innovators:

  1. Failing quickly to learn fast.
  2. Trying imperfect ideas.
  3. Engaging in highly immersed observation.

These methods “…free their minds, opening them up to making unexpected connections and perceiving invaluable insights. These methods also unshackle them from the constraints of conventional planning, analytical thinking, and linear problem solving that our educational system overemphasizes at the expense of creativity.”

Perhaps your company has been looking for that big idea, that break-though concept. Maybe it’s time to try a different method for sparking innovation. Join Soundview and Peter Sims on April 30th to hear Sim’s full explanation of this approach and learn how it can be applied to your business. Register for our Webinar How Breakthrough Ideas Emerge from Small Discoveries and we’ll save you a seat at the table.