Grand Master Strategy

"...keeping you great" Ten Minutes with the Growth Guy

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"Grand Master" Strategist Gene Kirila Turns $7 Million Division into $100 Million Opportunity -- I spent the last two days with a couple of dear friends and long-standing clients Gene Kirila and Paul Silvis. Gene was the youngest-ever named "Hero of Manufacturing" in the U.S. for pioneering several manufacturing technologies that have changed entire industries; Paul is founder of Restek, a $60 million leader in manufacturing chromatography products. Knowing that the best need coaching, Paul invited Gene in to look at a $7 million division that he felt should be generating considerably greater revenues. What resulted from the strategy session was a credible and realistic new strategy to generate $100 million. It's strategy that drives revenue growth -- if your top line isn't growing as fast as you would like you need to tweak your strategy!! How they did it is under DETAILS below.

Grand Masters Have the Most Moves -- Kaihan Krippendorf, the brilliant ex-McKinsey strategist and author of The Art of the Advantage book and DVD series points out that Grand Master chess players aren't thinking any more moves ahead in a chess match than an expert-designated player. The difference is that given the layout of the chess board at any particular moment the Grand Master has 10 times the available next moves he or she can make i.e. more available patterns residing in their brain. Kaihan, who is doing strategy training work for firms like Wal-Mart and Microsoft finds that most executives have the same handful of moves or patterns they fall back on when plotting strategy. His approach expands that to 36 moves -- moves all of you should have at your disposal. BTW, you might notice Kaihan appears to have a new book out -- it's simply a re-titling of his Advantage book now called Hide a Dagger Behind a Smile!  The key is to play with a half-dozen of his strategies at each strategy planning session until they become second nature.

50 Deals and Experience -- so let's go back to Gene and Paul. Paul has been ensconced in basically one business for decades. In turn, Gene has been involved in over 50 deals during the same time. As you'll read below, Gene simply had a bunch of moves and experiences available at his fingertips that were different than Paul's. This is why we all need outsiders -- advisors, consultants, coaches -- to help us maximize the potential of ourselves and our businesses. It's not a sign of weakness (Paul is one of the most respected business leaders in his community -- FYI, he's a candidate for Trustee at Penn State U -- any Nittany Lion alums, please cast your vote); it's the best that reach out. That's why the Microsoft's and Wal-Mart's hire grand masters like Krippendorf.

10,000 Hours to Become a Master -- Bryan Fischer, with Catalyst Connection   in Western Pennsylvania, pointed me to this outstanding April 1, 2008 NY Times Op-Ed piece by David Brooks. Published on opening day of baseball, it's one of the most succinct and elegant explanations on how to instill discipline within people and organizations I've ever read using the insights about focus and discipline from the H.A. Dorfman's book The Mental ABCs of Pitching. And in the op-ed piece he notes that it takes 10,000 hours to master anything -- roughly three hours per day for 10 years -- which I shared with my children. Please, please, please share this article with ALL your employees (you don't have to be a baseball fan to enjoy this article)!! Make it the subject of your next weekly meeting or brown-bag lunch series.

Masters Lose Themselves in the Task -- there are so many great lines in Brooks op-ed piece, but this one particularly hit home as you watch Grand Masters do anything -- notes Brooks "A baseball game is a spectacle, with a thousand points of interest. But Dorfman reduces it all to a series of simple tasks. The pitcher's personality isn't at the center. His talent isn't at the center. The task is at the center...and by putting the task at the center, Dorfman helps the pitcher quiet the self. He pushes the pitcher's thoughts away from his own qualities -- his expectations, his nerve, his ego -- and helps the pitcher lose himself in the job."

Grand Master Tiger Woods at the Masters -- as I write this Woods is just four back from the lead at the coveted Masters Golf Tournament. If there is anyone on the planet that knows how to "lose himself in the job" and place the task at the center, it's Woods. And if you take time to watch the Masters this weekend you'll once again witness a player who simply has more moves in his arsenal than the rest of the field -- and an outstanding coach in Hank Haney.

Grand Masters Set Strategy; Experts Drive Execution -- I'm starting to see that it takes a village of coaches to help firms. When it comes to setting strategy, you have to engage a Grand Master -- someone with decades of diverse experience who is wicked smart. And this strategy is critical because it has to last 5-7 years if not longer. Challenge is -- these people are expensive in the short run, but if you amortize over several years (and calculate the cost of not getting your Business Model correct) then it's inexpensive. In turn, driving execution and holding your feet to the fire would bore strategists, so you need a different kind of long-term coach to support this execution process.

You Don't Know What you Don't Know -- that's why Bill Gates does his "Think Weeks."  This is why we host our two Summits.  Gene Kirila will be in Orlando at the Sales and Marketing Summit precisely because he's a great student of business -- he's there to learn from other masters, picking up new moves and patterns. He'll have no idea when he'll use them, but they'll be there as he does his next 50 deals. Whoever has the most patterns and focus wins i.e. lots of diverse patterns applied to a single-minded focus! Come meet Gene.

DETAILS:

Here's the essence of Paul and Gene's strategy. Gene asked what the main differential advantage was provided by the $7 million division. Their metal coatings can reduce costs by 20% - 30%. He then asked who the largest customer was which was a firm doing about $400k. He then asked Paul how much business this customer should be doing with this Restek division. Paul replied roughly $25 million.

Gene then had Paul's team pull up the 10k for this customer and point out "which line item on the income statement is affected by the 20% - 30% improvement?" Turns out, in the larger scheme of things, Restek's process is maybe impacting the customer a fraction of a percent -- not enough to get anyone to be a strong advocate for the process.

Gene then asked if there was any existing client where the Restek process made a critical impact on the business. One of the people in the meeting said yes, there's a critical valve in off-shore rigs that has to be replaced frequently. And when the rig is shut down for the eight hours to replace this valve, it costs the company millions of dollars. Restek's process can have a significant impact on the life-expectancy of these valves!! The strategy, therefore, is to dramatically narrow the focus of marketing/sales and go after companies in this industry. There's one client they figure might do $100 million in business with them.

Paul also pointed out publicly in our Rockefeller Habits workshop yesterday that Gene had also opened his eyes to a marketing strategy he never would have contemplated. They have a major customer that has been balking at the cost of their coating process. Gene suggested they do the coating for free (install a coating facility within this major customer's plant -- something Gene did himself in another venture) and then split the gains i.e. the coating will let the customer increase the price of the product by $10 so Restek and the customer can split this gain.

Time will tell if these are viable strategies.  Stay tuned.

Comments

[Orlando Hotels]

The Sales and Marketing Summit sounds very interesting.. I might just go there, i'll book a hotel through ECT and get right to it! thanks for the recommendation!