January 27th, 2012
There are many ingredients required to develop and execute a successful strategy; none more important than discipline. Disruptive innovations that reshape an industry are rare. Most innovation is incremental, and successful execution is a function of hard work, time and patience.
Jeff Bezos’s insight about selling books online (which resulted in the formation of Amazon) was conceived while he worked as an analyst at an investment bank. His conversion of strategy into tactics will go down in history, as Amazon took on all the best in retailing, seemingly overnight.
Bezos remains hungry and focused. Amazon’s top 5 managers meet every Tuesday for four hours to review and rebake strategy. Not once a year, not once a quarter – every Tuesday. Twice a year his team has a two day off-site to think about “big ideas” that may require 2-3 years to implement.
Alan Kay once said, “Perspective is worth 80 IQ points.” Where the rubber meets the road in strategy is maintaining the right perspective – the intersection of strategic thinking and tactical execution. Business owners can easily lose perspective when they spend too much time muddled in solving day to day operational problems.
To maintain strategic discipline:
Create a strategy committee, task force or executive management team (EMT).
Each member should have a role in strategy formation and implementation and be accountable for key initiatives of the company. Meet with the EMT monthly to review progress versus goals.
Engage mid-management in strategy formation and execution
Mid-managers are often insightful in identifying latent needs as they are often closer to the customer than their senior counterparts. Many entrepreneurial companies lack management depth. They are well served to include mid-managers in executing strategy. Provide learning opportunities for junior managers by delegating tasks for them to complete.
Hold your teams accountable
Results oriented organizations are built from the ground up to support execution, rigorously using scorecards that drill down to individual performance. Best-in-class organizations orchestrate goal setting for individuals that align with the broader goals of the organizations.
Include outside variables in your dashboard
While most successful companies measure internal activities, few score external variables. Seek out external metrics that may be predictive of future demand. Leverage the data to plan capacity, labor, facility expansion, procurement of equipment, etc.
Bezos said, “We are willing to plant seeds and wait a long time for them to turn into trees. Every new business we’ve ever engaged in has initially been seen as a distraction by people externally and sometimes even internally.”
Great strategies convert into initiatives that become the unifying vision of the strategically successful organization. Ideas that lack resources, energy and concentration are just a distraction.
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Posted by Marc Emmer - President - Optimize Inc.
December 14th, 2011
About 4 years ago, our firm began to implement an enterprise system. Several months into the project, I had to hit the abort key. The software did not gel with my team’s habits, processes, preferences and collaboration techniques. We just weren’t ready.
I, like many entrepreneurs, fell into a trap. I was romanced by a technology. Those of us committed to improvement often see tools that are sexy, and interesting and we feel like we have to have them. Technology and gadgets can be like crack.
This is why many information technology professionals are cynical about new tools, especially trendy ones that don’t fit within narrowly defined parameters. They see the potential flaws, and often act to mitigate the risks. We should listen to them, and avoid the tendency to chase shiny objects.
What I see in entrepreneurial firms is that having the right solutions is very important, and implementing them at the right time is equally important. I have seen clients wait too long to implement enterprise tools and that has hurt them (creating a competitive disadvantage). But the opposite is also true-attempting to execute technology projects based on arbitrary target dates is a slippery slope.
Successful technology implementations require a complete organizational commitment, from top to bottom. In order to affect successful projects, companies must vet a software’s capabilities, and carefully plan its implementation. The cost of failure is very high. Rushing to judgment, skipping steps and trying to cut out expenses such as scoping and training can cause dire consequences.
In most implementations, there is a single point of failure; users and contributors rely solely on IT to manage the project. A very consistent problem is that nearing completion, users realize their new toy doesn’t fulfill the company’s needs, or offer features of the software it is to replace. If users are not required to be accountable for scoping a project from the onset, they are almost always disappointed.
I once read that over 90% of ERP implementations are late, not to mention over budget. In such instances, people are quick to blame IT or their vendors, when it is often organizational inertia that blows up the project in the first place. Unfortunately, there are very few technologists that are savvy enough to write business requirements that capture everything software must do to satisfy its users. That is why the users themselves have to take a more active role in understanding how their systems will work.
As you consider upgrades to your system, whether they are minor or significant, select your system carefully, plan the steps rigorously, and implement at a point in time when your team has the bandwidth to manage the project effectively.
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Posted by Marc Emmer - President - Optimize Inc.
July 18th, 2011
As a result of the liquidity crisis and the giant sucking sound that followed, business-to-business customer relations have taken a dramatic turn. Salespeople, beaten down by heightened customer demands and rampant discounting have become far more tactical. As customers have attempted to flatten the playing field through RFQ’s and reverse auctions, vendors have been conditioned to comply with a new set of norms. How tedious and unfortunate.
The art of dissecting customer needs has deeply eroded. These new realities put the seller at a tremendous disadvantage, and often impacts margins and profitability. Selling organizations are better off identifying the minority of customers who are still willing to have strategic conversations. Below are 4 types of questions you should be prepared to ask in a strategic meeting.
Perhaps the most critical element of consultative selling is getting to a decision maker. Procurement departments are typically focused on one variable; price. One way to orchestrate a senior level meeting is to ask for a strategy session or peer review. This can be positioned simply as…”the senior management of my company is planning a trip to…and they wanted to know if we can have a strategic conversation about the future and how we can; take cost out of the system, improve customer experience, reduce cycle time, etc…” In some cases, you may need to be prepared to suggest that you are considering investments that will decrease the total cost of doing business for the customer (that does not mean a price concession).
Salespeople should prepare rigorously for the meeting, digging up every possible piece of information on the company, their customers, their competitors, your competitors and about the people you are meeting with. Linked In, Facebook and other internet sites offer all type of information about clients-everything from the alma mater, to hobbies and interests.
Always allow the client to be seated first, but if possible, position so that your organizations are not seated on opposing sides of a table. Begin the meeting with opening questions and quickly transition to strategic questions. You want to first set a tone that you are there to probe and listen:
Stage 1: Opening Questions
- How many years have you been in the industry, or how many years have you been here?
- What did you do before?
Stage 2: Strategic Questions
- What is your vision for growing the business?
- What are your strategic objectives?
- What separates you from you competition?
- How will your company need to change to maintain its advantage?
Explain to your salespeople that if they interrupt the customer, or speak while you are asking questions, you will fire them on the spot (and mean it). Many will have an overwhelming desire to present (and not to listen). Here is the golden rule: if you are speaking for more than 20% of any meeting, you are losing!
While asking strategic questions, you are observing the customer’s tone, pace and body language. If they are tactical thinkers, or simply don’t want to have a strategic conversation with you, you will observe their discomfort and move on to lower level discussions (which you should be fully prepared for).
After you have established the fundamental business problems, create a transition where the customer views you as the solution (without you even suggesting it).
Stage 3: Anchor Questions
- What are the long term ramifications of …?
- What would be the affect on revenue/profit/cycle time/customer experience, if …were to continue?
Stage 4: Closing Questions
- Do you have any initiatives to outsource … to suppliers?
- What if we were to…?
Here is the hammer. Companies (and especially purchasing departments) have seen dramatic contraction of headcount. If there is a way for your organization to accept the burden of certain activities on behalf of the customer, you have reduced their total cost of ownership.
This approach will not work with all of the customers all of the time, but it will promote dialog the most profitable customers and those are the ones who are worthy of our time and investment.
Adapted from A Seat at the Table by Marc Miller
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Posted by Marc Emmer - President - Optimize Inc.
