Ten Tests for Your Strategy by Mckinsey

• Test 1: Will your strategy beat the market?
• Test 2: Does your strategy tap a true source of advantage?
• Test 3: Is your strategy granular about where to compete?
• Test 4: Does your strategy put you ahead of trends?
• Test 5: Does your strategy rest on privileged insights?
• Test 6: Does your strategy embrace uncertainty?
• Test 7: Does your strategy balance commitment and flexibility?
• Test 8: Is your strategy contaminated by bias?
• Test 9: Is there conviction to act on your strategy?
• Test 10: Have you translated your strategy into an action plan?

Read More at

https://www.mckinseyquarterly.com/Strategy/Strategic_Thinking/Have_you_tested_your_strategy_lately_2711

How the Weak Win Wars by Ivan Arreguín-Toft

If power implies victory in war, then weak actors should almost never win against stronger opponents, especially when the gap in relative power is very large.

Yet history suggests otherwise: Weak actors sometimes do win.The question is how.

Hypothesis 1: When strong actors attack using a direct strategy and weak actors defend using a direct strategy, all other things being equal, strong actors should win quickly and decisively

Hypothesis 2: When strong actors attack with a direct strategy and weak actors defend using an indirect strategy, all other things being equal, weak actors should win

Hypothesis 3: When strong actors attack using an indirect strategy and weak actors defend using a direct strategy, all other things being equal, strong actors should lose

Hypothesis 4: When strong actors employ barbarism to attack weak actors defending with a Guerrilla Warfare Strategy, all other things being equal, strong actors should win

Engaged Employees Stay for 'What They Give'. Dis-Engaged Stay for 'What They Get'

1. Engaged employees stay for what they give (they like the work and their ability to contribute). The Dis-engaged employees stay for what they get(salary, bonus, favourable job conditions etc)

2. Top Two Satisfaction Drivers : a) Career Development Opportunities & Training b) More opportunities to do 'what I am good at' .

3. Trust in senior leaders has a higher correlation with high engagement (almost twice) than trust in immediate managers. However employees are more likely to trust their immediate managers than the senior leadership teams.

4. Employees flee bad managers but not necessarily stick with good ones.

5. Indian Workforce is the most engaged workforce world-wide at 37%. Chinese (17%) are the least engaged

Please read the full report at

http://www.blessingwhite.com/content/reports/blessingwhite_2011_ee_report.pdf

Vision : The Soul of Strategy

"To make a contribution to the world by making tools for the mind that advance humankind." Apple

A vision statement is a bold and compelling statement, inspiring the organization, building aspirations and expectations within its stakeholders.

Vision is a ‘portrait of possibility’, it provides a compelling raison d’être, creates enthusiasm in an often boring organizational journey. Vision is the source of oracle, an interesting repository of imaginative stories and dreams.

Without a compelling vision, the strategy looks shorn of soul; strategy looks plain, drab, mundane & boring. A space exploration to find water on moon is merely a scientific experiment unless it is backed by the vision of colonization of space by men, of Star Wars, of building a human civilization in the most distant of stars.

A vision statement has to be a well told story, a story that is unique, provides vivid imagery and provides motivation for the employees. And yet the vision also has to be an interpreter of organizational culture and value systems. Great products are based on great consumer insights, great visions must carry a similar insights about the company, its leaders and its workforce.

Vision is not a hallucination. While it will be great if it has the magic of ‘Alice in Wonderland’, it can’t be just that. Vision also has to have actionable steps and encapsulate ‘a call to action’.

Compare it to 30 second advertisement on TV. Vision is like that. It needs to tell a story, engage and yet it needs to sell a plan as well. And akin to making of a great commercial, the vision statement requires a fair degree of eloquence, brevity & imagination. Like all great ideas, a compelling vision should seem obvious or very simple in hindsight. Google’s vision of "organizing the world’s information" seems incredibly simple and obvious.

In nutshell an inspiring vision statement should answer the following questions well

• Does it tell an inspiring story – unique story providing vivid imagery (different from competitors) , provide a sense of direction & looks deep into the future, inspires and focuses on excellence

• Is it authentic and does it strike a chord with the stakeholders esp. employees- motivates the employees , is rooted in organizational culture, subscribes with the values of the firm and is tangible to the market environment.

• Does it have a call for action-provides a useful preamble to mission statements & strategy, aids decision making, guide the aspirations of the organization .

• Is it concrete, measurable and attainable -provides a point of reference to measure progress and evaluate programs and services as they contribute to reaching the vision . If the vision is to build the fastest boat, all decisions can be evaluated on whether they will add to speed

The Mid-Fielders of Organizational Football

In football it is said that very few teams can win without a good midfield.

Midfielders have to do it all, they have to win and hold the ball, they must complete passes, motivate the team to play well and work hard. Midfielders play a decisive role and can change the nature of the game through an imaginative pass or a ruthless tackle to crush a sudden counter attack. With a curling free-kick the midfielders can also score and change the game on its head.

The middle managers in the organization are a bit like the midfielders. It is virtually impossible to deliver a strong performance or execute a strategy well without good middle managers. And often significant attrition in the middle manager ranks can upset implementation of strategy. For high performance teams it is important to lure great midfielders and so it is for high performance organizations. Working as a team instead of individual players, midfielders can be the glue that holds everything together.

And yet it is so easy for the organizations to sometimes forget the role & strength of its middle management. And unlike football which has seen a host of celebrity midfielders like Platini, Zidane, Maradona etc. most organizations do not celebrate the strength of their middle management. To make it worse organizations do very little to involve middle managers in strategy development, strategy communication or organizational alignment.

Middle managers translate strategy. They create alignment and ensure that the front line is focused. Middle managers play a critical role in linking the vision of top managers to the day-to-day realities of front-line managers. They do so by building ‘a sense’ or a comprehension through information exchange with others. Middle managers' need abilities to build strong collaborative relationships, identify problems and shared interests, and provide each other with support and resources. In that sense teamwork and collaboration at the middle management level is ‘mission critical’ at the middle management level. A bunch of midfielders with little role clarity and teamwork will make it exceedingly hard for a soccer team to succeed.

A vital question for a performing organization therefore is how to encourage collaboration in the middle management ranks ? Influencing others in the organization to think, feel and act differently is a critical managerial activity for middle managers. Like a football field, they can determine the tempo of the game.

Good middle managers control the tempo of business performance. Middle management need to be coached and developed to be effective tacticians. It is almost a cliché that for any strategy to succeed, tactics have to be good as well. Knowing when to distribute the ball on an immediate counterattack or when to retain possession and slow the pace down is an important part of being a good midfielder for soccer.

It is critical therefore that middle managers understand the strategy of the organization and also buy-in into the execution plan. They need to own the performance goals and also be extremely clear of the milestones.

Being on a daily touch with the frontline, the middle managers can relay the feedback and provide vital inputs which relates to strategy and execution. Since they are a vital introclutors , almost like a trading post for ideas and implementation plans (between the leaders and frontliners) , middle managers can influence top management's perceptions and actions, providing them with new ideas for accomplishing an organization's vision and strategy. Midfielders are the most influential when creating strategic passing plays and envisioning potential scenarios even three passes before they occur

Organizations need to empower middle managers provide opportunities to lead various tasks, projects and taskforces that may be part of a strategy roll-out programme. They need to encourage ideas and initiatives that the middle management wants to champion. It only then the middle managers will develop skills to anticipate the ball, to know ‘where the ball is going to be’.

Would you care about Gross Employee Happiness as much as you would about Gross Profits?

What should make a toilet cleaner or a truck driver or an office assistant wake up every morning & look forward to the day ahead?

What makes a receptionist in a specific company perky and warm, and in the other cold & bored?

Is there more to business than just profits?

Is there a spiritual side to the business, something that makes the mundane meaningful …something that is transmitted like energy by workers on a swanky shop-floor, something that cries out aloud and asks why we are the way we are?

There’s enough in good companies that talks about what we want to do, what we want to achieve. There must be a compelling reason why we want to do what we want to do.

“I never wanted to be a businessman, I just wanted to changed the world” remarked Richard Branson, CEO, Virgin Group .

So how many businesses spell out exactly how they want to change the world. Most even do not make a pretense of trying to make a difference. So when you read the mission & vision statements (and strategy workshop summaries) of most companies, one fails to see a single inspiring statement, a statement that lays out the purpose that gives the employees a sense of a heroic journey that the company has envisaged.

Often it is difficult to read mission/vision statements with a straight face.

So how do you expect to pick yourself up , when you walk into your office on Monday morning after a lovely weekend. How do you plug yourself to the company’s energy and play? How do you connect emotionally to your workplace?

One of the difficulty with this intangible ‘the Spirit of Business’ is how to describe it. And once we have described it, how do we measure it . How do we know how far we have progressed on ‘Changing the World’ platform.

How do we measure the intangible, the one that really matters. And how do we create conditions that support the ‘Spirit of Business’.

One interesting way, in which this is being done by a country called Bhutan. For those who don’t know much about it , it is a small Buddhist monarchy with two mighty Asian neighbours- India & China; almost like a small peaceful village in the middle of two large metropolis cities.

While its two mighty neighbours add trillions to their GDPs, Bhutan has taken a different path. When asked about the Gross National Product of Bhutan, the Dragon King of the kingdom, changed the paradigm and coined Gross National Happiness.

In a simple yet profound Buddhist way he outlined that the purpose of his nation was to create happy citizens. And the goal of his government was to answer a fundamental question- How do we create a habitat of happiness ? How do we create conditions that support the growth of Gross National Happiness?

The GNP aimed to work on increasing things that really mattered to average citizens- the quality of our education, the health of our children, the strength of our marriages, our wisdom, our courage etc.

In order to make it tangible Bhutan broke the GNH into four themes or pillars. The four pillars of GNH include socio-economic development, preservation of cultural values, conservation of the natural environment and establishment of good governance.

These themes were further broken down into fairly tangible GNH indicators : standard of living; health of population; education; vitality and diversity of ecosystem; cultural vitality and diversity, use and balance of time; good governance; community vitality and emotional well being. For example, one indicator to measure diversity of ecosystem is to measure the percentage of forest cover. Only 16% of Bhutan's land is arable, so there is pressure to fell trees and sell timber. But the law requires that the proportion of tree cover must not be less than 65%. At present about 72% of Bhutan is forest.

The GNH concept has lead to an amazing transformation of the country. In a recent development the Dragon King has devolved his power to his subjects. From an absolute monarchy , Bhutan became a constitutional monarchy. The king gave the power to his parliament to sack him (by passing a vote of no confidence). Frankly speaking it is quite difficult to find parallels where an autocrat/monarch has done something similar of his own accord.

Today, more cannabis grows on Bhutan’s soil than grass, but in a kingdom with high GNH nobody smokes marijuana. Instead they feed it to their animals, often the pig, since marijuana is the most popular food for pigs. Incidentally, the pigs do fly in Bhutan.

It is about time we looked at the Gross Employee Happiness as an indicator of company’s success, its sustainability, its culture and vitality. It is also a great way to look at performance . 64% of the world’s GDP is Service Businesses. Happy employees make a profitable service business.

So Intangibles matter. Purpose resonates. And the ‘Spirit of the Company’ needs to be resuscitated.

Destined to Fail- Study of Brand Launch Failure in Healthcare OTC Category

Master Sun Consulting has done a study the "Brand Launch Failures in the OTC Healthcare Category". The OTC products in the healthcare sector can be defined as the products which help in curing any day-to-day therapeutic ailment like cough, cold, fever, headache or body ache, weakness, tiredness.

Some of the brand launches that were studied were the launch of Savlon, Disprin Plus (later Disprin Paracetamol), Chawan Junior, Duractin , Crocin Pain Relief, Crocin Syrup for Children, Dettol Plaster, Dettol Extra (almost a beauty soap), Vicks Cough Syrup, Gacidity (an antacid), Pediasure (an adult nutrition brand).

Some of the major reasons for failure observed by Jasravee Kaur Chandra, a Healthcare Branding Specialist were "Failure to understand usage of product by consumers, consumers' attitudes and beliefs, consumer's relationship with a brand and positioning of the brand vis-à-vis competition".

One of the most notable failures was the Savlon launch campaign. Savlon, a Johnson & Johnson brand, could not succeed since it went against the grain of consumer beliefs about the category. It was widely held belief that for an antiseptic to be effective it has to be perceived as making an effect- the sting of Dettol. Therefore Savlon's no-sting & sweet smell went against the basic consumer attitudes to anti-septic category. According to Sarvajeet Chandra. Managing Partner, Master Sun Consulting, "the clinical smell of Dettol enhanced the perception that the anti-septic was working. Consumers were not expecting to spray a perfume on their wounds; they wanted an anti-septic lotion which was seen to be waging a war"

The other notable example was the failure of Disprin Plus by Reckitt Benckiser. The marketers extended Disprin brand into the Paracetamol category to launch Disprin Plus. Since Aspirin comes under price control the profitability of Disprin was very low. Even today the brand is sold at less than one rupee per tablet. To circumvent this issue, company launched Disprin Plus in 2001. It only had Paracetamol as the active ingredient (instead of Aspirin). The idea was to leverage the Disprin brand equity and also maximize the profitability of the brand (as Paracetamol is out of price control). Again we see that the marketers dug their own graves without paying much regard to customer beliefs and attitudes. Jasravee observes "The core benefit of the brand was tinkered with a view to leverage the equity of the Disprin mother brand. What was ignored was the fact that 'ingredient' was part of the equity. Re-positioning efforts as Disprin Paracetamol also did not work. By 2005, the writing was on the wall". Again the results were akin to the Savlon disaster. Sarvajeet remarks light heartedly that "It was like introducing a Bacardi brand of beer. A similar mistake was initially made when Crocin was extended into pain relief to take advantage of the analgesic market".

Similar example of marketers not doing their homework properly was the launch of Chawan Junior by Dabur. The consumers couldn't connect with the product as one of the key ingredients of Chawan junior was Amla which doesn't go well with milk - a common knowledge which was overlooked by Dabur marketers. Jasravee observes "This is a failure at the product formulation stage and again stems from inadequate understanding of product usage by consumers". Certain beliefs that are deep rooted in psyche will well serve if respected.

In some cases the companies did not demonstrate adequate understanding of consumer purchase behaviour. An example of this was the launch of pediatric range of Crocin. Crocin syrup containing 125 mg of Paracetamol for 5 ml was introduced for kids to cure cold, cough and light fever. The syrup was introduced directly as an OTC product. Crocin syrup was not very well accepted by the parent community as they did not have the confidence on the product. Jasravee observes that "As with all the Pediatric drugs given to children, the parents always want to take any drugs only after the doctor's consultation. Even parents who tend to ask chemists for an appropriate medicine of common ailments for themselves will not risk buying anything without the doctor's advice". The company had to remedy their strategy and ensure that Crocin Syrup was categorised as a prescription drug by GSK and doctors started providing prescriptions for Crocin Syrup for children.

The study also looks at various other case-lets of launch of Dettol plaster, Dettol shaving cream, and Dettol Extra soap (with moisturiser and a glycerine variant launched as a beauty soap). Sarvajeet observes "I am surprised that they didn't launch a Dettol toothpaste to fight the germs in the mouth. Imagine using the toothpaste with a pungent taste and a clinical smell early in the morning. Makes you think you have woken up in a hospital bed"

Strategy & Culture

Sun Tzu’s The Art of War, talks about victory without fighting . Such a doctrine would not work in India of Kautilya’s Arthashastra, where a whole caste , the Kshatriyas existed for the purpose of fighting. For this class it was a disgrace to die anywhere else , except on a battlefield. Sun Tzu’s doctrine of victory without fighting would have rendered a caste, virtually jobless.

Infact, a world without war was inconceivable in the Hindu world order. The Kshatriyas had such a stranglehold on war mongering that it was literally inconceivable for other castes to think of participating in wars. One of the reasons that Brahmins , the priest caste, were kept out of wars was that the enemy can put Brahmin troops out of action simply by prostrating before them and prostrating persons, by law, could not be killed.

So a strategy has to account for cultural ethos & organizational structure for it to be execution-able.

Such was the stranglehold of Hindu social order that India’s biggest Emperor Asoka, who ruled virtually the entire subcontinent had to forsake the ‘Hindu’ order and embrace Buddhism, in order to put an end to his war-mongering & blood thirsty ways after the poignant victory over the Kalinga kingdom.

Incentives create a push for strategy in the organization

"And Jesus answered him, saying, It is written, that man shall not live by bread alone" Luke 4:4

A successfully executed strategy should unleash a bounty of incentives for various levels in the organization. Communication of the incentives is critical to the marketing of the strategy.
Incentives create a push for the strategy within the organization. Kautilya’s Artha Shastra mentions that before starting the war the Senapati (Chief of Staff) should announce the awards for bravery. Killing the enemy king, for example, could earn the reward of 10,000 coins. How many soldiers would have fancied killing the enemy king, but like a consumer promo offering a Mercedes Benz to one lucky winner, it could give a significant launch to strategy.


Teams Incentives

The focus of incentives needs to be on team performance, on broad measures, on specific goals that teams need to achieve in order to successfully execute strategy. In a sense, the execution of strategy could be compared to an army out on war. It cannot be about a bravery about a super soldier, or a super hero.



Fairness is Currency.


The process of administering the incentives has to be perceived as fair. There is enough evidence to prove that it is difficult to distinguish the desire for fairness from the desire for material gain. In a study 'The Sunny Side of Fairness' that it was noticed that compared with unfair offers of equal monetary value ( getting Rs 2 out of Rs. 10, in a split between two people ), fair offers (getting Rs. 2 out of Rs. 4 , in a split between two people ) led to higher happiness ratings. This study provides evidence that fairness is hedonically valued. Simply put, fairness is a currency in itself.

Since fairness is a currency in itself, it becomes very important that the organization views the incentive policy as fair. This creates additional commitment for execution and generates a positive vibe in the organization. A lot of effort expended on discussing on the favourite theme of who is losing out gets instead diverted to how to make it work for oneself, one's team and one's company.

Usage of Lean Across Industries

How lean is being applied to service industries.Download the Document The Wharton Document

Interesting presentation on Execution Leadership by Robin

Keynote Execution Leadership

View more presentations from Robin Speculand.

How to Execute a Sell-Off Strategy : Interesting Insights for Entreprenuers & Business Owners

Girish Godbole, Founder & CEO , CEOally made an interesting presentation covering the following areas that are necessary to execute a sell-off strategy.

Download Girish Godbole's presentation

The presentation covers the following areas

1. Should you sell your company? Why? When?
2. Why do buyers buy? What do they buy?
3. Is your company positioned to sell?
4. What do buyers read into financials?
5. What is a fair valuation?
6. How do you go about selling? Can you do it alone?
7. How is life after an acquisition different?

Chief Strategy Officer: Process Owner, Advisor, Consultant, Monitor, Evaluator, First Mate etc.

Who owns strategy in the organization?

It is the job of CEO to have a vision, to set a direction. In that sense, the CEO owns the strategy (on behalf of the Board of Directors, the ultimate owners). But the buck stops at the CEO anyways. The CEO owns everything and yet can never own anything completely. He is accountable for everything and yet cannot be completely responsible for it.

So an appropriate question to ask is perhaps who is responsible for strategy amongst the executive team? In an increasing tribe of CXOs then, who is mandated by the CEO to develop and implement strategy?

An interesting emerging tribe is the CSO or the Chief Strategy Officer. Where does the CSO fit in, since the CEO cannot delegate the strategy formulation entirely? Besides the execution of strategy is really the job of business units and other CXOs.

Therefore, what space does the CSO occupy?

CSO as the Chief Process Owner of Strategy Development

Strategy creation in businesses can take many different forms, both formal and informal. The presence of a CSO implies that the business has decided to adopt a formal process of strategy development.

The CSO name implies that he is supposedly the executive focus/lead for the strategy in the organisation. The job of the CSO typically should be to drive the strategy process along the broad direction/vision of the CEO, with inputs/involvement of other CXOs and unit heads.

CSO could then be called the owner of the strategy process and he needs to ensure that the process is robust, engages the organization and is objective by bringing in and defending alternative points of view to challenge group think.

In doing so, the CSO (and his team) could also provide critical inputs to strategy development by doing useful analysis and utilize various tools like scenario planning, value chain analysis etc.

The CSO needs to seek inputs and engage the various functional and business units in the organization at all levels. The CSO has to ensure consistency of strategy development across the organization and the role-up to a corporate strategy that integrates the businesses and the functional groups.

The CSO will have the responsibility to pass down to the functional and business groups their boundaries for operational planning and investment planning.

The CSO has to encourage cycles of refinements with iterations on the analyses as the organization at all levels. This will include inputs and comments from the board as they consider findings from various business and functional analyses.

Being the process owner the CSO and his team also needs to run the logistics of the strategy process - bringing in the correct people, organizing meetings, facilitating the process so that it remains on-track etc.

CSO as Chief Implementation Monitor/Evaluator

The objectivity of CSO also helps in evaluating how successfully the strategy is being implemented or that it is actually being implemented, and that executives don't throw it out the window the first time they face a serious competitive challenge.

It is useful to state at this point, that the CSO cannot adequately monitor strategy implementation unless the outcomes have been clearly defined and there is an objective way to measure whether the strategy is delivering the desired outcomes.

A good tool to monitor implementation is the balanced scorecard.

CSO as Chief Consultant on Strategy Implementation

As a process owner, the CSO facilitates not just the development of strategy but also its dissemination and implementation across the organization. He is the torch bearer for the strategy and also someone who communicates it across the organization.

The CSO can also serve a useful consultant to business units and aid them in strategy implementation. As a consultant the CSO can propose solutions. He can also help steer the execution and course-correct whenever necessary, by keeping the CEO fully in the loop.

He doing so he would have to engage frequently with the CEO and the rest of the management team to test the assumptions, check the performance against the plan and the environment and competitive environment, and acts as the devil's advocate when necessary to point out the changes in the environment or flaws in implantation.

The CSO tries to ensure overall alignment of firm’s goals. He could also create links and bridges between different business units and functions (with active support from the CEO)and ensure optimum utilization of resources .

The CSO requires a mandate from the CEO to act as a consultant. This mandate must give him significant but not total control over the execution process.

CSO Overlap of Roles during Implementation

CSO’s role (esp. during implementation) does have a significant degree of overlap with the other CXOs. CSO cannot micro-manage the implementation. He needs to focus more on outcomes.

To avoid overlap/duplication with other roles, he should not get involved in the detail and day-to-day execution of strategy. By focusing on performance indicators and managing by numbers, the CSO needs to continuously remain objective during strategy execution.

As a first mate/navigator to a CEO driving a car in a rally on unfamiliar terrain, the CSO must always recognize that his job during the race is tactical management of strategy. The CSO has to remain alert, track progress, recognize situations and determine appropriate responses.

How Much You Know Vs. Should be Knowing ?

90% of entrepreneurs or businesses spend a lot of time and effort on product development, infrastructure and other areas. But very few of them spend adequate time on the consumer. This can be attributed to the fact that they think 'they know' what the customer wants or they have a big ego about what they think is right.

It is this ego or gut-feel (which encouraged them to be entrepreneurs in the first place) which impedes their connection with their customers. The lack of understanding of customer is one of the primary reasons for business failure.

The bottom line is that all entrepreneurs sell a single product - ' Satisfying a Customer's Need'. However they need to do some research to figure out whether they are actually doing that, and what it would take for them to differentiate significantly from the competition.

Customer is the person who makes a tipping decision about the product. Given two refrigerator brands with almost similar features, the wife who decided that a specific color refrigerator matches the curtains made the tipping decision. It is surprising to note that in India, a lot of tipping decisions ,in diverse areas like buying a shirt to buying a cement , are made by women.

Customer don't buy a product. They buy an 'aspect of a product', like the coolness embodied in the chewing gum or the 'convenience' of a Maggi Noodle or the 'ache removal' property of Moov. Businesses need to understand which aspect of product do their customer buy and work continuously on improving that 'aspect'.

Similarly we need to understand the 'aspect of the consumer' which buys the product. The 'motherness' in a woman buys a Horlicks, 'the caring attitude' of a relative buys Vicks etc.

The entrepreneur has to listen, watch and experience her customer. And when you start doing that the amazing world of consumer behavior opens up.

A manufacturer of 'anti-lice' shampoo discovered that customers believed that lice= dirty hair, whereas in reality lice prefer clean hair. Makers of Savlon discovered that people believed that the stinging feeling of Dettol is an indication that it works well vis-a-vis a Savalon which doesn't work well (since it does not sting).

This is especially important if you are want to differentiate in a significant way.

Conventionally books were distributed in India through the book stalls. Along came a company called Crossword, which basically wanted to encourage reading. Their logic was that a book lover will buy a book anyway. Selling a book to a non-lover will create a new market and a significant differentiation for Crossword .So they allowed people to sit endlessly in bookshops and browse through books and magazines. In certain bookshops where they had a good retail store front, they placed the browser seats bang on the store front. They reckoned that the 'browsers' were acting as free models for advertising their shops.

They also ensured a 15 day return policy (not done by anyone else, with a return rate of less than 0.1%), included children section for books (which was initially dismissed by experts but contributes to 30% of sales) and various other programs by observing and analyzing their customers.

Most of these initiatives went against the grain of conventional wisdom in book selling.

Therefore the entrepreneur must hold his hand on heart, and before working on a product/marketing strategy have an honest discussion with herself. How much does she know about her customers and is it enough?

Is there a need to know more, study more ?

Frankly there is no end to journey of knowing the customer. However beyond a point, more research yield diminishing returns.

But gut feel cannot be substitute for research and understanding of customers. So understanding 'how much to know' is critical to business success.

Innovative Tools for Change Strategy Execution by Patrick Seaton

Patrick Seaton's Explanation of His Innovative Change Strategy Tools

My “tools” come from being in many situations over the years (mostly outside the US) where I was expected to make changes. The why, what changes, and who were never identified prior to my arrival. I was also not given any formal training on how to facilitate and manage change. Therefore, out of survival I started to develop my own tools to help me do two things: understand the situation at hand and devise a plan for moving forward.

I was on location for only a brief amount of time in most cases, so I had to find ways to get the people to give their buy-in to the needed changes and also take ownership of the work moving forward. Finally, while the people might not have taken exactly the path I would have taken to get the job done, I needed to make sure that whatever path they took (one that made sense to them) it was in the direction the company had set out for a future strategy.

All this said, I have now developed over 20 focused activities that are designed to bring a small group of people (from 1 to 15 is typical) together to discuss and correct a specific challenge they are facing. The activities usually last between 3 and 4 hours. They are not intended to change the work in one fell swoop. Instead, they are intended to bring clarity, direction, and understanding on a specific issue.

The activities are card based, meaning that I provide small, specially-designed cards that people write on, and the cards are displayed on a wall in front of the people as the session moves along. This helps to create a visual that everybody sees. It creates a common visual for the group. Since I provide the prompts, cards, and structure for the sessions, the content comes from the people – the experts. This makes every session unique and it engages the people because the information is their information. I never tell them what they must do to change the situation. I let the wall tell them. I simply point out certain aspects of the wall that prompt them to consider certain choices and actions.

So that’s a high-level overview of what I do to change people’s behaviors during the change process. There needs to be top-down clarity and vision, but there also needs to be bottom-up support and willingness to act. Bringing those two thoughts together through group sessions and guided reflection is a very powerful thing. While the concept is simple, please understand that the outcomes are very powerful. Moving people forward in a unified manner, to improve the company, is very often a failed act.

Please visit his website http://www.innovmgmt.com/

Executing a Strategy from Bottom Up

A strategy is no more than a piece of paper, if people at the bottom of the pyramid do not know what to do with it. The front line is where value is being created, where the rubber meets the road.

Getting the Buy-In of Informal Leaders

While most organizations have a well-defined formal leadership structure, it is quite often observed that the real centers of power/influence do not vest with them. So a critical step is managing these "informal" leaders. They often boast of disproportionate influence/power.

It is these informal leaders who can play a significant role in setting the agenda or setting the pace for implementation. It is they who influence canteen conversations about what the new strategy is supposed to accomplish.So getting a buy-in from these informal leaders is an imperative for successful implementation. And any process of creating a buy-in is a two-way dialogue process. One thing that influencers are sensitive to is the risks that they face. Using this as a starting point, one can discuss of how the strategy will mitigate the risks.

These 'hot buttons' create high degree of involvement amongst the influencers and develops a consensus and commitment for execution. While the top management must communicate openly and honestly, it must also be receptive to feedback/changes/trade offs.

One widely used methodology for identifying the informal leaders in a very structured manner is social network analysis. However this can be done by doing interviews and using a questionnaire who the key influencers are.

Branding of Strategy

Also at an organization wide level the strategy needs to be 'branded' and communicated in a very simple way for it to be understood. The branding exercise should be able to translate the crux of the strategy in a few simple messages, of 'how it is going to make a difference to my life'.The communication should also emphasize the problems that the strategy will solve and the risks that it will mitigate. All this is very necessary for creating a common ground and for the front lines to connect with strategy.

The communication of strategy should involve a lot of face-to-face interaction/meetings etc. and not just be limited to sending emails or putting up posters etc. These face-to-face opportunities develop trust and also serve as opportunities to clarify/interpret the key themes.

Again this process also needs to be two-way since the front lines know what the problems are and have a fair idea about the solutions. They may be able to give inputs which will make the strategy more robust. Or they may be able to suggest activities/steps which will speed up strategy execution or make it more relevant.Putting an attractive brand name like say 'Terminator Strategy' evokes an interest, and a key message could be that we need to terminate all causes of customer complaints. This could be easily understood by service and operation teams.

Keeping the Communication Going Throughout the Implementation Process

We often find that some organizations do make a lot of noise during the initial stages of introducing the 'bold new strategy'. But slowly and steadily the communication stops and the dialogues shut down.The leadership should keep communicating. They should communicate how the milestones achieved , what was the actual vs. planned performance etc.


Finally it all boils down to the coffee machine

And often conversations at the coffee machine determine whether the organization has successfully ensured that the bottom-up approach has worked or not. It is these conversations that are the true barometer of success .These conversations provide insights on whether the front lines have internalized the strategy and is translating it in action.


If they are joking about one more cause of complaints that they have terminated, it means that strategy is alive and kicking, and is delivering the desired outcomes.

Half Truths About Customers During Strategy Formulation

Some of the widely believed half truths about customers that are presumed during strategy formulation and regularly exposed during strategy execution are :

1. Customers are in blind love with their brands. Customer will move to another product category or product mix, if their brand moves in that direction. Just keep the 'soft' aspects of personality/culture the same, and brands will be pied pipers to customers.

2. Customers come as a marriage gift or dowry. If a company acquires a brand/product, they assume that they will acquire all the customer relationships. Acquiring companies pay a good value for these relationships expecting them to migrate. They do not make much effort to understand the cause and strengths of these relationships that the acquired brand shares with its customers.

3. Customers love big size. When they merge a small brand Y into a big brand X, all the customers of Y will feel privileged to become customers of X. They do not pay much heed to a possibility that perhaps customers of Y wanted to identify/associate/relate with the smaller brand.

4. Customers love siblings , cousins etc. One of the myth is that because a customers are loyal to a certain brand of the company, they will have positive inclination to buy other brands from the same company. If they buy cars from a company, they might also wish to buy mobile services.

5. Customers are headless bozos. Build it, they will come

6. Customers love a brand more than the brand loves the customer.

7. Customers are sitting ducks for cross selling & up selling.

8. Customer is a moron, she is not my wife.

Half Truths About Customers used during Strategy Development. Exposed during Strategy Implementation

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A Strategy Bleeds to Death : Hundreds of Mutinies, Thousands of Cuts

One of the reason that Pakistan took recourse to terrorism as part of the military strategy execution against India was that Pakistan believed in bleeding India through a thousand cuts, since it was not capable of inflicting a fatal blow through one attack.

I have seen a lot of organizations where strategy execution bleeds to death by a thousand cuts inflicted by myriad of sources. These are hundreds of mutinies at various levels that bring a strategy down.

The root cause of most of these mutinies is that people & technology prefers 'status quo'. They do not change readily. They do not want to make a single alteration to life as usual. Managers want to protect their turf, customers want to stick to their old habits, salesmen want to safeguard their territories.

Customers refuse to migrate to a brand new improved product line, since they are comfortable with the features and services of the older version. The 'mutiny of the customer' rebels against a strategist who takes him for granted, making a lot of assumptions at his behest. Just because customer is buying wealth management services from you, does not mean that he will buy travel related services. He has a friendly neighborhood travel agent that he is very comfortable with . The customer rebels against the idea of ' services super market' . Clearly unless a very compelling reason is given, and customer's inputs are taken , what seems like a good diversification/alliance/merger/new product strategy doesn't take off.

Then there is the 'mutiny of the employee'. No employee really wants to change status quo unless there are strong reason and incentive for him to do so. A salesman used to selling a product might be incentivized to sell a solution, but the salesman is clearly unsure of whether he is capable to do that. So he sticks to his knitting citing his inability on account of any flippant excuse. Similarly a salesman selling the highly incentivized real estate is not convinced about selling mortgage to his customer (since the incentive is low) . So in both cases cross-selling and up selling strategy looks great on paper , but the 'mutiny of the employee' puts one more cut on the strategy and bleeds it a little more.

Another mutiny that takes donkeys years to resolve is the 'mutiny of the IT system'. You might put a new purchase software with fancy reports but it refuses to talk to maintenance software . So inventory of maintenance spares cannot be updated real time. Or an HR software refuses to talk to the e-learning software, so real time training man days cannot be updated in HR .

So there are these hundreds of mutinies waiting to happen, once a strategy is ready for execution. Very often, the over-confidence at the strategy level( that stems from a grand new vision, a sparkling new business opportunity, a fascinating new product , a big merger , an ambitious cost cutting program) does not take into account the possibility of either the occurrence or the fierceness of these mutinies.

While individually they might not be very worrisome, when put together they can bring the bold new vision or the bright new strategy on its knees.

It is very surprising indeed that instead of toning down estimates of sales on account of these mutinies , strategists over-estimate them . Instead of hyping the possible cost savings or merger synergies, companies should discount them by a factor attributed to resistance at various levels.

Thankfully for India, while Pakistan succeeded in sending the trained fidayeen in India, its other planned mutinies like causing communal riots, economic setbacks etc.. failed to take off.

Role of Strategy Execution Team : Be a 'Black Hat', Devil's Advocate, Bad News Messenger

Become a Devil’s Advocate to a Specific Strategy and look at the What Will Go Wrong

We are all over-confident and over-optimistic beings. While that has spurred us on as a civilization, this over-confidence gets translated into strategic choices or strategic plans that we make. Most of us tend to believe in the veracity of our ideas, tenacity of our plans and our destiny to win (regardless of market condition and competitive activity)

It is the job of the execution team therefore to assume the role of a ‘Black Hat’ or a Devil’s advocate. It is the job of the execution team to do so, since they have to drive the execution. They have to question the unrealistically precise estimates of time, resources and targets. They have to imagine a worst case scenario (most strategists do not come up with very gloomy worst case scenarios) .

Someone has to be given the role of challenging the false conseus or group-think that may have cause the dissenters to stay quiet. The execution team has to wear the symbolic ‘Black Hat’

This will help the strategy become more ‘implementable’, give the strategic plan more flexibility and force the strategists to become more realistic.

However for this to happen the management must encourage the culture of challenge and recognize the role of the strategy execution team as a ‘Black Hat’.

Sink a Strategic Option which does not meet the Pilot Objectives/Targets

In an uncertain world, where industries are being redefined, new technologies, media and ideas are emerging, it is often imperative for the company to pursue a few strategic options and experiment . However while a few companies are savvy enough to look at strategic experiments , they do not define how they will flag out the options that are not achieving the desired outcomes.

So while a few strategists are open to piloting a few strategies , they have not defined what are the indicators to call off the pilot.

The onus therefore comes on the strategy implementing team to raise a red flag, and cry hoarse about a specific pilot not coming through. In doing so, they will face severe resistance from the strategy team and/or company leadership since there is some sunk cost . It is the job of the ‘Execution team’ to look at incremental prospective costs and revenues.

It is tactically difficult to convince the strategy team to dump the losers. Often it is better to look at the strategic plan level itself. The executing team should not agree to pilot various options , unless clear objectives and targets are defined at the outset. Clearly if the objectives and targets are not being achieved, then the experiments need to be dropped. Again this is easier said than done

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