It’s January, and we all know what that means: time to set New Years resolutions that we’re going to break! The main things resolutions are good for is causing the gym to get way too crowded for the first six weeks of the year. You have a tool at your finger tips that will do far more for you than simply setting resolutions.
Skip your resolutions and set strategy, instead.
A strategy is a 50,000-foot view of your life or business. A good strategic plan gives you a roadmap for where to put your time and effort this year. It tells you what to say “yes” to and what to say “no” to.
As you know from my article on how vision and mission relate to strategy, your strategy for a year answers the question, “How can we further the company vision, given the realities of the markets, customers, and resources under our control right now?” Strategy is how vision plays out in today’s real world context.
But when you’re setting your strategy, make sure to approach it from both the outside and the inside.
Look Outside to Set Strategy
Your strategy depends on what’s going on outside your company walls. You need to develop a plan that makes you more desirable to customers than any of your competitors. That means knowing:
- How do your customers think of you? What product category do they put you in? (Don’t assume you know. A yacht isn’t necessarily a vehicle. Rather, it may be a status symbol.)
- Who else is in that product category? If you’re a yacht, are you competing against Toyota and JetBlue (transportation) or are you competing against Jetstream and Sotheby’s (status symbols)?
- What advantage do you have over your competitors?
- How can you best communicate that advantage to the market?
- Who has the power in your ecosystem, and how can you increase your power?
One of my favorite books on external strategy is Co-opetition by Adam Brandenburger and Barry Nalebuff. If you’ve ever heard of Michael Porter’s “Five Forces,” Co-opetition goes one step further and deepens the model. Just the way Brandenburger and Nalebuff define competitive and complementary relationships is worth the cost of the book.
Strategy Looks Inside
Looking outside is only half of the equation. You also need to look inside when you formulate your strategy. If strategy is vision made real now, part of “now” is the resources you have under your control. You need to take stock of your resources and decide which resources will form the foundation of your strategy.
When you make ultra-yachts, two of your assets are your customer list (oodles and oodles of rich people), and your yacht design capabilities. If you base your strategy off your customer list, you will expand into other products and services that your current customers might want. Like platinum dinner place settings. If, however, you base your strategy off your design capabilities, you might instead expand into other kinds of yachts, or other sea-faring vessels.
My favorite book on internal strategy is Top Management Strategy by Tregoe et al. The book is 30 years old, but is pretty much just as relevant today as when it was written.
Treat yourself to a 3-martini lunch
If you don’t have a formal strategy session planned, then at least take a long lunch. And over lunch, review the vision/mission for your venture. Why are you in the game in the first place? Then ask yourself how that gets expressed in the world of 2017. Review your external factors—competitors, customers, suppliers, and so on. Review your internal resources, and decide which you plan to base your strategy on.
Then go for it. Give shape to your plans for the next year. Make sure to build in time to review and course correct, and get your year off to a good start. A New Years resolution might only last a couple of weeks, but a good strategy will support you for a year.
Why don’t my people just do what I say?
It’s a common refrain among my executive clients. Life at the top would be so much easier, if only “they” would “get it.”
In fact, your employees probably _are _doing what you say. You just may be saying things you don’t intend. It’s often not your broad proclamations that give direction; it’s the little things you do that have the biggest impact.
Your actions encourage and discourage behavior
Remember when you were a front-line employee. Executives’ actions were relentlessly scrutinized. A late arrival, a smile, or a nod could introduce chaos. A CEO I worked with was looking over his marketing department’s latest campaign. He frowned at a storyboard before strolling away.
Unknown to him, the team saw the frown, scrapped the campaign, and spent the weekend reworking everything from the ground up. When he found out, he was flabbergasted. He never thought a simple frown would change the team’s direction.
Your reactions to employees and their work will send signals. Remember this! If you notice yourself frowning or smiling, nodding or shaking your head when it may send the wrong message, stop. Think about the message you may have sent, and say or do whatever it takes to make sure your audience knows your intent.
Watch your words, too. A joke may not be a joke. A consulting firm’s Managing Director smiled and quipped “Remember, if you’re not here Sunday, don’t bother coming in Monday.” He was smiling. Everyone knew he was joking. And as one team member later told me, “I felt like I had to come in Sunday. Sure, he was joking. But he’s the Managing Director. Maybe it’s not 100% a joke.”
You lead by demonstration
Of course, the Managing Director was there Sunday, thus insuring everyone would know weekend appearances are mandatory. Your actions will, by demonstration, always be the most significant way you communicate standards of behavior and priorities to your company. The Managing Director cared deeply that his people have an outside life, and said so on many occasions. But his coming in on weekends spoke louder than his words in signaling acceptable behavior.
What you don’t do also matters
What you don’t say out loud, the actions you don’t acknowledge, and the signs you don’t show send powerful messages, as well. The messages sent by omission are harder to detect. After all, theres nothing there to examine! But there are things your employees might expect that aren’t forthcoming.
If you don’t acknowledge people, it can send a message that you don’t value their contribution. Different people need different acknowledgment. For some, it’s public recognition. For others, it may simply be mentioning “Hey, you did a really great job.”
If you don’t give feedback when someone does a poor job, you send the message that their performance is fine. If someone is screwing up, they deserve to know as early as possible. Otherwise, they’ll walk away with a message that does neither of you any good.
Common courtesy is increasingly rare, and its absence communicates a subtle lack of respect or lack of individual concern. A simple “Please,” or “Thank you” with a smile and direct eye contact takes only a couple of seconds. If you don’t have time even for that, then people will (rightly!) conclude they aren’t important enough to warrant your attention.
Making decisions in isolation quickly lets people know you don’t trust them. I have worked with companies in which the senior managers are very open with their big decisions, and other companies in which “we can’t tell them that” is a common refrain. As far as I can tell, involvement signals faith that your employees have something of value to contribute. When that involvement is missing, the message of distrust is loud and clear.
Not sharing bad news sends the message that everything is fine. It’s easy to keep bad news quiet, for fear of hurting morale. But framing bad news as a reason to rally builds a team instead of breaking it down. Shared challenge is the stuff of bonding. Use it!
A Great Business Leader Knows His Impact
Matsushita, one of history’s most successful businessmen, knew the impact he had on everyone around him. As this story shows, he even appreciated the messages conveyed by what he didn’t do.
The father of $75 billion empire, Matsushita was revered in Japan with nearly as much respect and reverence as was the Emperor. And he was just as busy.
One day, Matsushita was to eat lunch with his executives at a local Osaka restaurant (Matsushita Leadership by John Kotter). Upon his entrance, people stopped to bow and acknowledge this great man. Matsushita honored the welcome and sat at a table selected by the manager.
Matsushita ate only half of his meal. He asked for the chef, who appeared in an instant, shaken and upset. The Great One nodded and spoke: “I felt that if you saw I had only eaten half of my meal, you would think I did not like the food or its preparation. Nothing could be less true. The food and your preparation of it were excellent. I am just old and can not eat as much as I used to. I wanted you to know that and to thank you personally.”
Concrete next steps
If you find yourself under the magnifying glass, here are ways of mastering the situation.
Don’t get caught off guard. Schedule five minutes at the end of the day to review your day, note who you came in contact with, and simply ask yourself what messages you sent.
Use the magnifying glass deliberately. At the start of the week, choose a message you want to communicate by example. Spend a moment or two identifying exactly where you can send the message, and how you have to behave to send it. Then do it.
Check for messages of omission. During your daily review, ask yourself who you didn’t contact, but who might have expected it (you may not know who at first, but over time, you’ll learn). What message does the lack of contact send? What message will rumors of what you did do send to those who didn’t see/talk to you?
Review company systems. To make sure you’re sending the same message as your company, review the systems once a year or so. Review your compensation plan: what does it communicate about company goals? What behavior does it encourage? Discourage? Review your decision making and feedback processes. Ask yourself if you’re omitting anyone or anything in those areas.
Last week I wanted to buy product X, locally. I couldn’t. Every search phrase I could come up with took me to a custom site from a big company. “Widget, Miami, FL” didn’t go me Miami Florida local businesses, it gave me specially crafted, search engine optimized pages from Walmart.com, saying “Miami Widgets” on a domain that redirected to Walmart.com.
I rarely issue proclamations about the future, because I’ve noticed that my ability to predict trends is reasonable, but my ability to pick the timing of those trends sucks eggs. But let’s give it a shot:
Advertising-Supported Business Models Will Decline
The more that media companies and software companies and game companies rely on advertising as their primary revenue base, the more the supply of advertising spots will increase. Eventually, the supply will exceed the demand and, except for a few extremely high-traffic sites, ad prices will be driven down … because ads will become much less effective unless the advertiser has the time, money, and skill to do the detailed analytics needed to find the few venues where they get a positive ROI on their money.
This will drive a lot of the ad-supported businesses out of business, because they just don’t have the reach to be able to be one of the high-value ad space suppliers.
As Will All Businesses That Rely on Ads or Search for Customers
This will drive a lot of smaller businesses out of business, because those smaller businesses don’t have the resources to spend on marketing analytics, which will become necessary for finding the few advertising outlets that actually work for those small businesses. The marketing analytics will become a cost of being in the game.
In other words, the internet will drive us toward a more anemic economy where there are a few big-company winners, and those without the resources will lose.
(Essentially, the internet raises the playing field for everyone to the point where only big companies can survive.)
There will always be exceptions for specialty niches, but not for general commerce.
I hope I’m wrong, but I from what I see on the ground, it looks like a plausible scenario.
The final bullet point? Carry out any other purpose for which the information was collected.
Please face it: Silicon Valley, that supposed bastion of libertarian respect for individual rights, is no such thing. It’s a collection of disingenuous, deceptive, liars who are happy to write multipage privacy policies for PR purposes, which have no teeth whatsoever.
Be very, very careful of anything you put on a computer you don’t own. And I’m sure that the license agreements we agree to when we buy our computers and install Windows or Mac OS X will contain similar escape clauses if they don’t already.
Corporations seem to be nothing if not explicitly immoral. It is very sad to watch.
The way people define industries is really quite interesting. I’ve once again been asked to be a judge for the Harvard Business School New Venture Competition. They asked what industries I’m comfortable commenting on. It’s a surprisingly hard question to answer, because it’s quite unclear what an “industry” is. Here are a sample of a few things that people call industries:
- B2C internet
- B2B internet
- Health Care
- Medical Devices
- Financial Services
What makes these an industry? Is it that all members of the same industry share the same markets? Is it that all members of the same industry share the same employee skill sets? Is it that all members of the same industry produce the same kind of products?
Every definition I’ve tried has glaring exceptions, which makes me wonder whether thinking in terms of “industries” really makes as much sense as I’ve always assumed.
Perhaps it makes more sense to think in terms of:
- companies/products who serve a given market
- companies/products that require certain kinds of distribution
- companies/products that require certain specialized knowledge on the part of employees
What do you think?