When leaders substitute visions, missions, purposes, plans, or goals for the real work of strategy, they send their firms adrift.
When discussing strategy, executives often invoke some version of a vision, a mission, a purpose, a plan, or a set of goals. I call these “the corporate five” (see exhibit, below). Each is important in driving execution, no doubt, but none should be mistaken for a strategy. The corporate five may help bring your strategy to life, but they do not give you a strategy to begin with.
Nevertheless, they are often mistaken for strategy—and when that happens, real damage can ensue. If the corporate five are the cart and strategy is the horse, leaders who put the cart first often end up with no horse at all.
Before they get to the corporate five, companies need to address five much more fundamental, and difficult, questions. Let’s call them the “the strategic five”:
1. What business or businesses should you be in?
2. How do you add value to your businesses?
3. Who are the target customers for your businesses?
4. What are your value propositions to those target customers?
5. What capabilities are essential to adding value to your businesses and differentiating their value propositions?
Several years ago the nature of management’s future was driven home to me in a flash, as I shared the stage with my co-author and business partner Dr. Martha Rogers. It was the heyday of the dot-com boom, and we had just done an hour-long joint presentation for an audience of thousands, arguing that online technology now demanded that companies maintain relationships with their customers, individually. CRM (“Customer Relationship Management”) was being birthed during this period, and Martha and I felt like midwives in the process.
Q&A time came, and a man took the microphone to say that while this all sounded fine and good, “Isn’t there a quicker way to build a relationship?”
Martha and I looked briefly at each other, and then without missing a beat she responded, “Well, isn’t that just like a man?”Read More
Too often I hear delegates in my seminars talking about this very topic. Most of the time their conclusions are all the same: execution far outweighs the importance of strategy! In this HBR piece by Ken Favaro, with Evan Hirsh and Kasturi Rangan, he outlines how both elements are equally important in the pursuit of success. Take a read and let me know what your thoughts are in the comments section below…
Many business leaders think they’d rather have great execution than superior strategies, but you can’t have the first without the second.
I once heard a business leader say, “Strategy is results.” He meant that strategy doesn’t matter as long as you are producing results. Many other business leaders feel the same way. Often, this is because they associate strategy with analysis and execution with getting things done, and they attribute more value to doing than to analyzing. From that perspective, a strategy is a lofty, self-evident statement such as “Our strategy is to maximize customer value” or “Our strategy is to become the market leader.” Such “strategies” don’t contribute much to producing results. Possibly, they motivate the troops, although even that is highly debatable.Read More
This is an interesting article by Greg McKeown in which he juxtaposes the notion of the undisciplined pursuit of more with the disciplined pursuit of less. McKeown believes that success can be a catalyst for failure in that is leads to a wealth of options and opportunities which distract us from our core focus,talents and work of importance. In the below article he outlines his thinking as well as providing tools for working towards a disciplined pursuit of less.Read More
Aren’t you tired of top business executives protesting innocence, and outrage when one of their trusted employees is found acting unethically. They seem astonished that this could happen on their watch. Particularly as they have continuously emphasized their company values – and even have the ‘values statement’ proudly hanging in their opulent receptions. This is particularly true of the banking world at present.
They forget however the old management reality that ‘all employees are smart ans that they all act system rational’ . In other words employees don’t listen to what top management says, they simply work out very quickly what gets inspected, what gets appreciated, what earns them the greatest recognition, and do it with enthusiasm.Read More
I picked up on this article from my colleague Dean at TomorrowToday. In it he talks about the Zappos corporation, a company which has built a unique company culture around delivering happiness to its customers by offering them the best possible customer service. In light of my previous post pointing out that it is what companies choose to measure that actually get done, here is an organization placing an emphasis on measuring their customers happiness rather than just the bottom line as do most banks…
Delivering Profits by Delivering Happiness
A few months ago I read the book Delivering Happiness by Tony Hsieh the CEO of Zappos an online shoe and clothing retailer in the United States. It’s a great read and was number one on the New York Times bestseller list. Tony together with his team at Zappos has built a unique company culture around delivering happiness to its customers by offering the best possible customer service. Importantly no lip service is paid to this quest and employees who don’t deliver are bribed with hard cash to leave! New employees at Zappos undertake a rigorous induction course. At the end of it they are offered their full salary plus $2000 as a bribe to walk away if they don’t believe they can deliver the level of customer service expected.
Last year I had the privilege of interviewing the COO of Zappos Alfred Lin. He said something simple and yet profound at the same time. With all the hype around social media, Alfred believes that the phone is still the best device for building a relationship with a customer.
Call centre operators at Zappos are not measured by the number of customers they serve, or the duration of a call, but rather by how happy the customer is with the customer experience. Most call centre operators are measured by the speed with which they move onto the next call – not a Zappos, where this industry benchmark is not even measured. Customers who have heard about the level of service commitment have even tried to test Zappos by phoning them and ordering a pizza (not shoes or clothes which Zappos sells). Not surprisingly the Zappos call agent made a plan and had a pizza delivered to the customer.
This attention and commitment to the customer experience may not always result in an immediate sale, but word gets around. Where so many internet startup fail, Zappos has grown to over a billion dollars annual sales revenue in under ten years, seventy-five percent of its customers are repeat purchasers and last year was sold to Amazon for $1.2 billion. Whoever says customer service doesn’t pay should take a look at what the clever folk at Zappos are doing.
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This article by Paul Bridle just goes to show how the “banking system” is what is rotten, and regrettably when you join a bank, you have to play the system! I guess the same goes for any big organization – or medium sized for that matter: the measurements put in place by the leaders are ultimately what gets done by the employees. For some organizations it is an emphasis on values, culture and ethos, whilst it sadly appears that for others, (big banks and multinational corporations) the emphasis is solely on ‘making money at all costs!’ If you are working or participating in society or business today, you have got to understand the system ( read: culture , ethics, purpose, values etc ) and the way things are done, and what is measured, so that you can align it with your own sense of purpose and values.Read More
An interesting article by Raj Sisodia explaining how conscious businesses are able to operate with superior financial results while creating many forms of wealth and well being for all of their stakeholders, including society. I am interested to hear your thoughts on Sisodia’s ideas and opinions.
A Better Way to Win: Profiting from Purpose
“I would not give a fig for the simplicity on this side of complexity, but I would give my life for the simplicity on the other side of complexity.” —Oliver Wendell Holmes
When it comes to managing their costs most companies operate with a simple model. They start by trying to maximize their gross margins so that they have a high cushion for spending in areas where they feel they need to spend heavily in order to compete, such as advertising and promotions. But a growing number of high-performing companies are showing that there is a better way to manage spending and improve performance. These companies live and operate on the other side of complexity.Read More
A great piece by Jason Lauritsen on why top talent doesn’t necessarily exist, but is rather relative and contextual.
Top Talent Doesn’t Exist
This week, as I was facilitating a session for a group of managers, one of them asked me the question, “What does top talent really want in a job?” On the surface, that seems like a pretty good question to ask. We all want to hire the best talent and he was trying to understand what they wanted so that he could do a better job of selling to them. But, what he really meant to ask was this “What do the people who I want to hire really want in a job like those I have to offer?”Read More
‘Great By Choice’
Jim Collins and Morten Hansen
Precis by Pete Laburn
None of us can predict with certainty the twists and turns our lives will take. Life is uncertain, the future unknown. This is neither good nor bad, it just is. Yet the task remains: how to master our own fate in an uncertain world.
In the book ‘Great By Choice’, Collins and Hansen asked the simple question: Why do some companies thrive in uncertainty and chaos, while others do not. In a world of tumultuous events and fast‐moving forces that we cannot control, what distinguishes those who perform exceptionally well, from those who underperform or worse?
Some companies and their leaders navigate uncertainty exceptionally well. They don’t merely react to situations and events, they create their own future. They don’t merely survive, they prevail. They don’t merely succeed, they thrive. They build great companies that can endure and while no company thrives on chaos, some can thrive in chaos.
‘Great By Choice’ is based on case studies conducted by Collins and Hansen and their team on a set of high‐performing companies that thrived during times of great uncertainty in their respective industries. Each case study company started from a position of vulnerability, rose to become a great company, and did so in unstable environments characterised by big forces out of their control. These high‐performing cases were called 10X companies. These cases were then compared to a control
group of companies that failed to become great, whilst operating in the same industries during the same extreme environments over the same period of time.
A recent blog done by my colleague, Graeme Codrington, who speaks about diversity in the future world of work. In his article, Graeme argues that diversity management should not be harmony, but rather an attempt to create a vibrant and sometimes brutal ecosystem that will deliver resilience, creativity, innovation and understanding. Take a read for yourself below…
Leading Diversity: The Zoo versus The Wild
By Graeme Codrington
One of the most significant leadership issues in the 21st century is going to be the issue of diversity. This is because it’s not just about ensuring the requisite numbers of women and ethnic minorities at various levels within your organisation. It’s about engaging with difference, and using that engagement to enhance your business success.
But this can only happen if we have a significant change in mindset.
Put simply: the goal of diversity is not harmony. And this is the problem: Most leaders approach the issue of diversity with a checklist in one hand (to make sure they’ve covered all the ‘diversity factors’ they’re being measured on) and a hope of maintaining harmony in the other. They see the management of diversity as the “taming of difference”.
The result is that you end up with something that looks and feels a bit like a zoo does: all the different species are there, neatly and carefully labeled, but they’re all locked up, artificially caged, and the visitors are not allowed to feed them. Zoos have their place, of course, and a lot of good work goes on in the world’s zoos. But they are not reality.
In the DreamWorks animated movie, “Madagascar”, four animals who have spent their whole lives in the New York zoo are unwittingly shipped out to Africa and dropped into the wilds of Madagascar. Initially they are thrilled. But then they encounter the reality of the natural environment. Set to Louis Armstrong’s haunting song, “What a Wonderful World”, the animals from the zoo discover that the freedom of nature can be quite brutal, with an entire ecosystem built on creative destruction and an interconnected web that is the “circle of life” (to borrow from another Disney animated movie that highlights similar themes).
And in that movie montage moment is the heart of the matter for 21st century leaders. Diversity offers much, but it requires a lot too.
If we get diversity right, what we will succeed in doing is creating work environments that are more like wild ecosystems than zoos. The benefits of true diversity would therefore include:
Resilience – the more diverse an environment, the more resilient it is when change occurs and difficulty strikes. This is true in nature, and it is true in communities too.
Understanding – in an ecosystem, it is vital to understand the different components and who does what (and to whom). True diversity will ensure that the full scope of your client base is understood within your company, regardless of how large or multinational or company is.
Creativity and innovation – it is only when we allow different people the space to see and experience the world in different ways that we can only really achieve innovative thinking. I firmly believe that the reason most companies never really achieve innovation is that they’ve never really embraced difference.
There are also benefits in product development, marketing, reduced staffing issues and much more. In fact, there will be benefits just about anywhere in a company where people and opinions make an impact on business performance. All of this is both well attested in business research and common sense if one thinks about it.
What then is the task of leadership?
Leaders need to firstly change their mindset about diversity. The goal is to build a flourishing, self-sustaining ecosystem, in which there is a natural, but sometimes scary and robust interaction of worldviews, attitudes, approaches, cultures and convictions. Leaders need to embrace this slightly chaotic environment, not attempting to tame or control it, but rather to immerse themselves in it and become guides to lead others through it.
This means, secondly, that leaders need to model a behaviour that is suited for the wild, not the zoo.
In a zoo, the goal is to cage and tame the scary animals. In the wild, you want them to run free. You want them to be who they are best meant to be. And you want everyone else to understand them, respect them, trust them and connect with them in the most appropriate way.
Dignity, trust, respect: these are not just words on a meaningless list of values handed down from head office. They are the heart of leadership in the 21st century ecosystem – and they are instilled best when they are instilled by example.
Thirdly, leaders need to promote diversity as a tool, not a goal in itself. Diversity is only a means to an end. The purpose of a zoo is to showcase animals. But the purpose of the wild is to live, to grow, to flourish together. That should be the goal of diversity.
And that should be what 21st century leaders aim to achieve by creating – and sustaining – groups and teams that evidence – and celebrate – real differences.
Dr Graeme Codrington is an author, presenter and board advisor on the future world of work. He is co-founder and international partner of TomorrowToday, a business strategy consultancy. He can be contacted at email@example.com and is lead blogger at http://www.newworldofwork.co.uk
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The below information and video was recently put together by global logistics giant DHL at the launch of their major study into the future and the role of logistics in the world 2050. DHL put together 5 scenarios for what the future of the world could look like in 2050. They have a dedicated website for their study: www.delivering-tomorrow.com. The full 182-page scenario write up can be downloaded as a PDF here, download the five page summary here or read the launch press release (and download the free resources).
The 5 Scenarios are:
1: Untamed Economy – Impending Collapse (this is the current world continued for another four decades, as we use up our natural resources and mess up the planet)
2. Megaefficiency in Megacities (this is a grand vision for “green” cities and a nearly completely urbanised world)
3. Customized Lifestyles (individualization and personalized consumption are pervasive – a technology driven vision of the future)
4. Paralyzing Protectionism (globalisation collapses, war and decay dominate)
5. Global Resilience – Local Adaptation (a scenario dominated by climate related changes, where mitigating vulnerability is the primary driver)
An outstanding article by Erika Anderson of Forbes magazine detailing the one reason why top talent leaves your organisation and how to go about retaining this talent if you truly value them. I look forward to your thoughts about this piece in the comments section below…Read More
Many of you will know that I always push the need for organizations to have and stand by a clear sense of purpose for their leaders and their business. An organisation without a clear sense of purpose, typically resort to an exploitative approach wherein the sole purpose becomes the pursuit of making as much money as possible instead of seeing how much value they can add to their industry, market and society. The below blog, written by South African Greg Smith, is a perfect example of what I am talking about in regard to this subject. I have long held the view that Goldman Sachs have lost their soul and the proverbial plot, but this article comes straight from the front lines to perfectly sum it up.Read More
When nobody (and everybody) is the boss
By Polly LaBarre
As a reverse fairy tale for the CEO set, the reality television program Undercover Boss is fascinating, not so much in the witness-to-a-train- wreck mode of the rest of the genre, but because it is so revealing of our conflicted relationship with “the boss.”
The premise of the show–that the only way to get a clue about what’s really going on in his (or her) organization, is for the boss to go undercover on the front lines–is all too often the actual reality in organizations of any size. Yet, at the same time, the view of the boss as the ultimate authority with the heroic power to swoop in and save the day–whether that means paying down a mortgage, granting an instant promotion, or banishing a reviled policy–holds sway in real life as well as on “reality” TV.Read More