There are those who work all day. Those who dream all day. And those who spend an hour dreaming before setting to work to fulfill those dreams. Go into the third category because there's virtually no competition. Steven J. Ross
The Most Important Strategy
-- for a year I've been traveling the globe encouraging senior leaders in my
audiences to make the most important 180 degree pivot in their business life and
why you have to read "How Companies Win" - more below, but first some
Strategy before Execution -- ...it's the same as "dreaming before setting to work." Without the right strategy, your team is going to waste a lot of time and energy executing a mess. That's why it's critical for a few key people in the firm to engage in strategic thinking on a WEEKLY basis at a minimum while staying constantly exposed to the real world marketplace and thought leaders. It's not sufficient to discuss strategy once a quarter or once a year in isolation.
Council/Headlight Teams -- This is the power of Jim Collins' "Council" or Gary Hamel's "Headlight Teams." Pick a team of four to six and have breakfast or lunch together on a regular basis. Steve Jobs had lunch almost every day with Jonathan Ive discussing design strategy - the essence of Apple's strategic direction - and then spent his afternoons interacting with customers. The key is lots of talk time around a specific strategic framework -- the "7 Strata of Strategy" for instance - and then spending the rest of the week testing your ideas in the marketplace.
Strategic Thinking vs. Execution Planning -- this is why the term "strategic planning" has to be thought of as two distinct activities and teams: a small team highly connected to the market engaged in ongoing STRATEGIC thinking (dreaming); and then the broadest team possible, including anyone in a management position, engaged in execution PLANNING (work). This is the yin and yang of strategic planning.
Critical Strategy Book -- which brings me to the most important strategy book written in years - How Companies Win by Rick Kash and David Calhoun. Though the main title is non-descript, it's the subtitle that hints at the most important 180 degree pivot business leaders must make in the last 60 years -- Profiting from Demand-Driven Business Models No Matter What Business You're In. Gazelles 200 CEOs and book club members will get a copy of their book next week. And this is why we have Rick Kash as the opening keynote at the Fortune Growth Summit in Phoenix next month - there is no more important strategy idea for growing your business this decade.
Google, Facebook, Amazon -- these and other explosive growth firms this century all have one thing in common - they are demand generation engines. Even Apple through its app store and iTunes is really in the demand generation business. None of their devices would be huge sellers if they weren't required to access the almost limitless supply of tunes and apps. And the myriad of creators of music and software beg for attention on Apple's platforms.
2007 Crisis: Demographic not Financial -- the financial meltdown was simply the result of a seismic demographic shift. Since WWII there has been more demand than supply in almost every sector of the economy. In 2007 the tables turned, driven by the 1.4 billion people moving into the middle class who must produce before they can consume. Combine this with the ability for anyone to service everyone from anywhere and almost overnight the planet bulged with a plethora of competitors, creating more supply than demand.
Supply vs. Demand -- ...thus the need for the crucial 180 degree pivot! For decades, business leaders have focused on the supply side of their business - "better, faster, cheaper" - and won. Now we must direct all those supply side energies toward the demand side of the business i.e. how much time do we scrutinize and negotiate every penny we spend with suppliers; yet customer pricing is set willy-nilly using nothing more complicated than WAGs (wild-ankle guesses).
7% That Matters -- what Kash and Calhoun detail in their book (and Kash will present at the Fortune Growth Summit) is the process for getting laser focused on the demand side of the business, identifying the 7% - 10% of the market that represents the largest profit pools in your industry -- and approaching this task with the same precision and focus we've given the supply side of our business the past several decades. This means taking a serious look at your weekly calendar and evaluating where you're spending your precious hours. FYI, at the time Apple first achieved the most valuable company status, its combined market share across all business lines was just 7%, yet that 7% represented 50% of the entire industry's profitability. Kash will help you figure out where the profit pools are in your industry!!
Steven J Ross Quote -- thanks to Greg Vetter, Oldest Brother (official title!) of Tessemae's All Natural for sending me the Ross quote above. BTW, their dressings and marinades are outstanding. And you have to love their tagline "Three Brothers and A Mother Livin' Happy and Healthy." Greg recently signed up for the insights noting "Your book is in our 'Tesse Library' and is required reading for our Operational team and staff. My Brothers and the rest of the Operations team have already read it and I am re-reading it now that we have entered a new phase of our business." It's all about generating demand.
See you in Phoenix -- just 90 seats are left for the Fortune Growth Summit Oct 23 - 24. Spend two intense days with your executive team learning directly from Rick Kash, Jim Kouzes, Anne Morriss, Ron McMillan, Vijay Govindarajan, Chip Conley, and Rich Moran - authors of a handful of the best biz books out of the thousands published each year.