21st Century Strategy

Define “Digital”

Understand “Digital Problems”

What makes a high-quality strategy

Putting strategy into everything

2

Understanding digital strategy

Cost performance improvement

Productivity improvement and computerization

Connectivity and complexity

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Defining “digital”

$0

$1

$1,000,000

$1,000,000,000,000

1961 1981 1997 2000 2001 2003 2007 2011 2013

�4

CO S T P E R G I G A F L O P

Top 500 & Wikipedia

0.0

1.0

2.0

3.0

1949 1969 1989 2009

�5

PR O D U C T I V I T Y

W A G E S

AP P L E I I R E L E A S E D

F I R S T P L C C R E A T E D

Baker

�6

Likely to be computerized

Frey & Osborne

0%

33%

67%

100%

1995 1999 2003 2007 2011 2015e

�7

NO I N T E R N E T

N O S M A R T P H O N E

G L O B A L A D U L T P O P U L A T I O N W I T H . . .

Evans

8

Digital is cost performance improvement of critical technologies – making really hard things easier and cheaper than ever before

Computing created massive productivity improvements relative to wages for workers, and is likely to eliminate many jobs, allowing companies to operate effectively with less profit.

Practically speaking, everyone is connected perfectly with each other, increasing the complexity of our world.

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Review: Defining “digital”

Pace of change, rate of growth, topple rate

Changing expectations and smarter everyone

Platforming of everything

Everyone becomes an user

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Understanding digital problems

�11

Dediu

�12

0

8

16

24

AverageFortune500

$GOOG $FB $TSLA Uber Snapchat Oculus Rift

Y E A R S T O $ 1 B V A L U A T I O N / C A P I T A L I Z A T I O N

Malone

0

23

47

70

1958 1982 2006 2030

�13

AV E R A G E L I F E S P A N , C O M P A N Y O N S & P 5 0 0

Foster & Kaplan

�14

0%

50%

100%

1880 1940 2000

S H A R E O F W O R L D W I T H A B A S I C E D U C A T I O N

Roser

�15

Amazon

Employees = Customers = Employees

Pay and be paid with time and money

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Everyone’s a user

Pace of change, rate of growth, topple rate – these are all increasing as computing gets more distributed (particularly with the deployment of mobile). 55 people can reach 1 billion – WhatsApp!?

We’re more educated than ever, and our expectations are higher. There’s no reason to accept a shitty experience from a legacy player – go start your own thing.

There is an all-out race to be the lone platform-owning monopoly in every sector. This is why companies that “get it” are investing all profits back into growth and user experience.

There is no longer an useful distinction between employees and customers – value exchanges just happen in different ways, but we’re all users, all the time. 17

Review: Understanding digital problems

Historical basis: long-term projections of demand and changes necessary to meet it

The framework problem

A faster option: sense-making

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What is strategy

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Strategy: The plan for the allocation of resources to anticipated demand.

Structure: The design for putting the enterprise’s existing resources against current demand.

Tactics: The efficient and steady use of current resources whose allocation had already been decided.

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Strategy and Structure: Chandler, 1962

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Arauz

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Rigorous diagnoses

Powerful insights

Coherent, connected action plans

😫 Fluff: Fluff is a form of gibberish masquerading as strategic concepts and arguments.

😫 Failure to face the challenge: When you cannot define the challenge, you cannot evaluate a strategy or improve it.

😫 Mistaking goals for strategy: Many bad strategies are just statements of desire rather than plans for overcoming obstacles.

😫 Bad strategic objectives: Strategic objectives are “bad” when they fail to address critical issues or when they are impracticable.

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Classic Fails: Rumelt

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Good: A framework for decision-making.

Add data, receive decision

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Better: A way of making sense of the world

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Complex

Cause & effect is clear in retrospect

Probe, Sense, Respond

Chaotic

No cause & effect system relationship

Act, Sense, Respond

Complicated

Cause & effect is clear to experts

Sense, Analyze, Respond

Simple

Cause & effect is obvious to everyone

Sense, Categorize, Respond

Disorder

Snowden

Good strategies are long-term projections of demand and changes necessary to meet it. But what utility is a long-term projection of demand if new competitors scale to billions in a matter of months?

Frameworks are easy, fast solutions to strategic problems, but apply pre-existing thinking to new data from new conditions.

A faster option: use sense-making tools all the time to bring strategic methods into all decisions.

Also: be wary of bullshit for bullshit’s sake, and mindful that repeated production of future-casting PowerPoints is a waste of everyone’s time.

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Review: What is strategy

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Everyone’s a strategist

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If strategies are hard to make, we will make them seldomly.

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If strategies are hard to make, we will make them seldomly.

If strategies are hard to remember, we will use them rarely.

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If strategies are hard to make, we will make them seldomly.

If strategies are hard to remember, we will use them rarely.

If we can’t remember our strategies, and update them infrequently, we’re fucked.

User stories/Jobs to be done

Polarizing strategy statements

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Always-on Strategy Practice

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As a user

I want to take an action

So I achieve an outcome

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When something happens

I want to take an action

So I achieve an outcome

Independent Can be built in any order

Negotiable Flexible; the team can choose how to implement

Valuable Outcome is actually worth something to the user

Estimable Actually useful for planning work

Small Easier to estimate, plan, implement and iterate

Testable Have built-in, or at least prescribed, success and failure criteria

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INVEST: Rally Software

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Strategy is prioritization

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Good thing even over Other Good Thing

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Growth even over Profit

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Individuals and Interactions even over Processes and Tools

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Emerging even over Proven

Retrospective

Open discussion

Capture key problems

Generate strategy statements

Cull/Select

Leader proposes

Consent

Commit 43

Strategy Process

We’re all users, and we’re all hiring products, apps, services, companies, colleagues, and feeds to do jobs for us. Use a Jobs To Be Done framework continually to understand why things are being hired, and to eliminate as much bias and assumption as possible.

Strategy is about choice, and creating short, memorable mnemonics for those critical choices is essential. Choices must be between two desirable outcomes – else, they’re not really choices. Develop and consent to these strategy statements as a team, and do it frequently.

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Review: Always-on Strategy Practice

21st Century Strategy

@clayparkerjones clayparkerjones.com