What is Strategy? Strategy Day at EO Accelerator
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Transcript of What is Strategy? Strategy Day at EO Accelerator
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Ft. Worth Accelerator Strategy Day
Grab digital copy of today’s material:
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Tim Hamilton Introduction
Company: Agile product & platform development Founded in 2000Offices in Austin, TXTradition: Formal Fridays
Background: Born in South AfricaWife: Christy + 1 on the wayCat personStudied Econ & MIS at UT
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Ground Rules
One conversation.Confidentiality.Trust & respect.
Peers.Gestalt.
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Sources
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Three ingredients to success: "Disciplined People. Disciplined
Thought. Disciplined Action.”
– Jim Collins
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Value Proposition
Hair on Fire Issue
Words You Own
Central Idea
Core Purpose
3 Brand Questions
Brand Promises
BHAG
Value Discipline
Empirical Creativity
Productive Paranoia
SMaC Recipe
Catalytic Mechanism
Disciplined Action
Hedgehog Concept
Reverse EngineerDisciplined Thought
Meeting Rhythm
MaybePlan for the Day
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”The job of the CEO is not to run the company. The job is to grow the
company.”– Jack Daly
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“If you have any issues with happiness in your business, then you must start with people. If you have revenue or growth issues, then strategy is the thing to focus on. If
profit or time is a key issue, then you have execution issues.”
– Verne Harnish
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The most important person in strategy is…
the customer.
Value Proposition Hair on Fire Issue Words You Own Central Idea Value Discipline
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“I can’t tell you the key to success, but the key to failure is trying to please
everyone”
- Ed Sheeran
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Purchase decisions are made emotionally,
not intellectually.
The first step to strategy is empathy.
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From your perspective…what’s missing, wrong or
insane about your industry?
Value Proposition Hair on Fire Issue Words You Own Central Idea Value Discipline
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68%
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Now, we’re going to choose what uncommon
offer we want to be known for.
Value Proposition Hair on Fire Issue Words You Own Central Idea Value Discipline
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“Software that’s for sure.”
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Next up, the central strategic idea.
Value Proposition Hair on Fire Issue Words You Own Central Idea Value Discipline
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“Strategy is not a lengthy action plan. It is the evolution of a central idea through continually changing circumstances.”
Jack Welch
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#1 or #2 or exit.
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Be profitable and democratize the skies.
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Inbound marketing is in. Outbound is out.
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Become the safest choice for outsourced software development.
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Value Proposition Hair on Fire Issue Words You Own Central Idea Value Discipline
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Build & manage systems and facilities
for high volume repetitive
tasks.
ID, attract and build relationships with
customers.
Conceive of attractive new products &
services and commercialize
them.
Product Innovation
Operational Excellence
Customer Intimacy
Three Generic Strategies
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A focus on the core processes of invention, product development, and market exploitation.
Product Leadership
InnovationKnowledge-ManagementCollaboration
• Providing products / services that continually redefine the state of the art.
• Kill their babies.• Key core competencies are innovation
and quality control.• Strive to be the best.• R&D & talent management.
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• Total solution, not just a product or service.• Focus on what the customer wants, not what
the market wants.• Cultivate relationships, not one time
transactions.• Specialize in satisfying unique needs.• Customer needs trump operating systems and
processes.• Go the extra mile.
Customer IntimacyAn obsession with core processes of solution development, results management and relationship management.
Relationship ManagementKnowledge
Management
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• Low cost offer (blend of high convenience and low price).
• Broad market focus.• Not product / service innovator; instead
delivery innovators.• Do not cultivate 1:1 customer relationships.• Execute extraordinarily well.
Operational Excellence
QualityCostSpeed
Processes for end-to-end product supply and basic service that are optimized and streamlined to minimize cost and provide hassle-free service.
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Why is this important?
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“No company can succeed today by trying to be all things to all people. We must instead find an uncommon value to deliver to a chosen market.”
– The Discipline of Market Leaders
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Have you chosen your market? Or is
your market choosing it for you?
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“Selection of a value discipline shapes every subsequent plan and decision a company
makes, coloring the entire organization from its core competencies to its culture.”– The Discipline of Market Leaders
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How do the founders spend their time?What key messages did you pick up on?
What value
Video Case Studies
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Decision making at the lab.
Product Leadership: Pixar
Culture & Competencies
Employee centered.
Coddling the creative stars.
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Product Leadership: Pixar
Goals & Objectives
While productivity is a goal…
…quality & originality are the goal.
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" ... [Steve Jobs] wanted there to be mixing. He knew that the human
friction makes the sparks, and that when you're talking about a creative endeavor that requires people from different cultures to come together,
you have to force them to mix; that our natural tendency is to stay isolated, to talk to people who are just like us, who
speak our private languages, who understand our problems. But that's a big mistake. And so his design was to force people to come together even if
it was just going to be in the bathroom.”
- Imagine, Jonah Lehrer
Product Leadership: Pixar
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Product Leadership: Toyota
Environments that promote collaboration
W. Edwards Deming
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Customer Intimacy: IBM
Best price? Hardly.
Best products? Nope.
Latest technology? Negative.
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It’s about the total solution.
Methods for planning new business applications.
Training management.
Providing explanations of increasing costs.
Aided with diagnosis and resolution of problems.
Upgrading & maintaining systems.
Customer Intimacy: IBM
Providing the best overal result for client.
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Culture & CompetenciesDe-centralized decision making.
All activities are aligned to customer needs.Deep customer knowledge.
Not cheapest offers or most innovative.Eco-system of partners for production & delivery.
Customer Intimacy: IBM
Tailored / personalized service / products to fit needs.
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Operational Excellence Example: Ikea
Luxurious show-room? No.
Best in class quality? Nope.
Helpful sales staff? Negative.
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Operational Excellence Example: Ikea
Culture & Competencies
Cost focused.
Stresses standardization.
Predictability and efficiency are key.
Centralized decision making.
Rules based operations.
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But aren’t these all really big companies?
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Customer Intimacy: Trunk Club
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Review & Break
Value Proposition
Hair on Fire Issue
Words You Own
Central Idea
Core Purpose
Brand Value Pyramid
Brand Promise
BHAG
Value Discipline
Hedgehog Concept
Disciplined Thought
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Could be best at
Passionate about
Economic engine
Core Purpose BHAG Brand Value Pyramid Brand PromiseHedgehog Concept
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What could you be the best in the world at?
Hint: You might already doing it… but you can’t tell.
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Economic Engine: What’s your profit per X?
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“What’s the one thing I can do such that by doing it everything else will be easier or unnecessary?”
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Wheels Up.
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What are you deeply passionate about?
Core Purpose up next… in the meantime, let’s take a 10 minute break.
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Core Purpose: Simon Sinek
Core Purpose BHAG Brand Value Pyramid Brand PromiseHedgehog Concept
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Apple’s Why
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Big Hairy Audacious Goal (BHAG)
Core Purpose BHAG Brand Value Pyramid Brand PromiseHedgehog Concept
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A grand call to inspire action to greatness.
Your emotional mission statement.
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"A true BHAG is clear and compelling, serves as unifying focal point of effort, and
acts as a clear catalyst for team spirit. It has a clear finish line, so the organization can
know when it has achieved the goal; people like to shoot for finish lines."
– Jim Collins
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“A computer on every desk and in every home running
Windows.”– Bill Gates, 1980
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More from Jim Collins…
http://www.jimcollins.com/media_topics/building-greatness.html#audio=97
http://www.jimcollins.com/media_topics/flywheel.html#audio=93
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Four Types: Target Oriented Become a $125 billion company by year
2000. (Wal-Mart, 1990)
Become the dominant player in commercial aircraft and bring the world into the jet age.
(Boeing, 1950)
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Four Types: Competitive
Crush Adidas. (Nike, 1960s)
Yamaha wo tsubusu! We will destroy Yamaha! (Honda, 1970s)
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Four Types: Role Model
Become the Nike of the cycling industry. (Giro Sport Design, 1986)
Become as respected in 20 years as Hewlett-Packard is today. (Watkins-Johnson, 1996)
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Four Types: Internal Transformation
Transform this company from a defense contractor into the best diversified high-technology company in
the world. (Rockwell, 1995)
Transform this company from a chemical manufacturer into one of the preeminent drug-making companies in the world. (Merck, 1930s)
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Brand Value Pyramid
Core Purpose BHAG Brand Value Pyramid Brand PromiseHedgehog Concept
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Meets desires.
Emotional benefits.Meets unrecognized needs.
Values & beliefs. Evangelism
Commitment
Satisfaction
Meets customers’ expectations.
Functional benefits & attributes.
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• Product design • Technology • Engineering expertise • Agile Scrum
• Web & mobile architectures • Digital strategy & facilitation • ClickModel prototyping • On-budget / on-time delivery
• The safe choice • No surprises • 68% failure no more • In control
• Security • Trust • Dependability • Confidence
• Transparent • Accountable • Clarity • Indispensable
• Your unfair technology advantage. • You deserve to discover your unfair advantage. • You are capable of so much more than you think. • Your vision is your legacy - bring it to life.
Functional benefits
& attributes.
Emotional benefits.Values & beliefs.
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“My project is completed on time and budget.”
Meets
Expectations “There weren’t any surprises in the course of my project.”
“I can experience the solution before I cut the big check to build it.”
“The process is free from risk and I completely trust my partner.”
“They understand and care about my business more than I thought possible.”
“The were efficient, accountable and transparent.”
Meets
Desires
“I see new possibilities for my organization as a result of our work together.”
“Astonish is like my unfair advantage. What can we work on next?”
“What I thought I needed was a web app, but what I got was more valuable: a partner.”
“Yep, that’s pretty much what I expected.”
Meets Unrecognized
Needs
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Three Brand Value Questions:
What does it say about your
customer that they work with your company?
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Three Brand Value Questions:
What is the singular thing that a customer can get from their relationship with you that
they can’t get anywhere else?
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Three Brand Value Questions:
How do you make the customer a hero in his or her story?
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Brand PromiseThe different, unique, uncommon way you
solve customer’s greatest need.
Core Purpose BHAG Brand Value Pyramid Brand PromiseHedgehog Concept
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Pizza delivered in 30 minutes or less or it’s free.
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RackSpace manages hosting solutions and when client’s systems go down, it’s never a good thing. So it promises to get hardware fixed in one hour or it’s free.
It also realizes that its customers hate to wait on hold so it promises to answer the phone in 3 rings or less, and to make sure that the customer can get their problem fixed within one transfer.
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If your beverage is not made to your full enjoyment, we’ll replace it with one that does.
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Style at a low cost.
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3LFs: Low fares, lots of flights, lots of fun.
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Peace of mind.
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The Smart Way to PrototypeEnvision your custom software idea or website before
committing the resources to build it out in full.
& cost effectiveV
ClickModel℠ User Experience Prototyping
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More important that you start than it is that you get it perfect.
Iterate
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“Vision is just about picking which problems you want to work on.
Success means your problems get better.”
– Ari Weinzweig
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How to work on strategy?
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"As leaders. you don’t need to have any answers. Your job is to nail the question and
then figure out who to involve to correctly answer the question.”
– Verne Harnish
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"Whether you want to live a certain thing should be the only criteria with which you decide whether to give it attention or not."
–Unknown
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Abundance & scarcity vs. belief in oneself to adapt and survive.
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Empirical Creativity
Productive Paranoia
SMaC Recipe
Catalytic Mechanism
Disciplined Action
Reverse Engineer
Meeting Rhythm
Maybe
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Reverse Engineering
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Meeting Rhythm
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Empirical Creativity
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Productive Paranoia
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Productive Paranoia
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“Specific, Methodical and Consistent."
SMaC Recipe
In 1979, then CEO of Southwest Airlines, Howard Putnam was facing a massive shift in the competitive landscape: the de-regulation of the airline industry. Faced a tough question: “Does radical change in our environment call for inflicting radical change upon ourselves?
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- Remain a short-haul carrier, under two-hour segments.- Utilize the 737 as our primary aircraft for ten to twelve years.- Continued high aircraft utilization and quick turns, ten minutes in most cases.- The passenger is our #1 product. Do not carry air freight or mail, only small packages which have high profitability and low handling costs.- Continued low fares and high frequency of service.Stay out of food services.- No interlining….costs in ticketing, tariffs and computers and our unique airports do not lend themselves to interlining.Retain Texas as our #1 priority and only go interstate if high-density short-haul markets are available to us
etc.
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Catalytic Mechanism