Strategy vs Execution: Which is the more important and why?

“Successful people start before they feel ready.” – attributed to Sir Richard Branson

I like to ask groups that I am working with which is the more important: Strategy or Execution? This always results in a highly animated discussion about why strategy is the more important of the two. If the strategy is not in place to be executed how can you be sure you will achieve the desired outcomes and results? Good common sense thinking. Then, one person in the room will say “but they’re both important you can’t have one without the other.” I like this response because it is a sign of intelligence as they haven’t accepted the question in the binary form that it was asked i.e. Strategy or Execution (A or B). They have moved to Strategy and Execution (A and B). So for those people I have a secondary and more challenging question which is: “Of the two, Strategy and Execution, which one is the more important and why?” Then we have an even more animated and by now passionate discussion.

Of course life is not binary. Consider the Strategy-Execution matrix above. On the vertical axis is Strategy with Poor Strategy at the bottom and Great Strategy at the top and on the horizontal axis is Execution with Poor Execution being on the left and Effective Execution being on the right creating four quadrants.

Question: Where is the best place to be and why? Quadrant 1, 2, 3 or 4?

The obvious answer: Clearly, the goal is to be in quadrant 2 – Great Strategy / Effectively Executed. No question. Easy! But not so easy to do!

The less obvious question is: what is the second best quadrant to be in and why? Essentially this comes down to a choice of two possibilities. Quadrant 4 – Poor Strategy / Effectively Executed, or quadrant 1 – Great Strategy / Poorly Executed and here again the room is divided into which is the better quadrant to be in, 1 or 4?

The not so obvious answer: The answer is quadrant 4 where execution is the key to success because that allows us in the case of a poor strategy to fail fast and the faster we can fail the quicker we can move to a recovery plan to adapt, change, reformulate or replace the strategy, and go through the cycle again. Failing is an opportunity to start over, to re-assess and to learn. So the second best option is to be in quadrant 4, to execute quickly and effectively on a poor or emerging strategy.

“When in doubt, try it out.” Which requires the courage to experiment and permission to fail fast (and recover quickly).

The next best quadrant to be in his quadrant 1 – Great Strategy / Poor Execution. This can be best described as a missed opportunity as we cannot validate if the strategy is good or if it should be adapted, changed, reformulated or replaced.

The quadrant that we want to avoid at all costs is quadrant 3 Poor Strategy / Poor Execution. This is slow death as we cannot determine what is working and what is not working; Strategy or Execution.

Takeaways: Execution is key. Execution is king. When in doubt, try it out. Fail fast, correct, adjust and adapt quickly. Then execute again. This is the new “execute, recalibrate and execute again” adaptive path to success in the digital world.

PS: I worked with a group recently that challenged themselves as a group to assess where they were today on the Strategy-Execution matrix. Responses varied around the room from “we have pockets of execution across the organisation” to ” we are quadrant 4 for some parts of the business and quadrant 1 for others. (No quadrant 2 and no quadrant 3). An extremely insightful self-assessment of their executional performance using this simple 2 x 2 matrix.

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Differentiation in the Cloud (aka. Differentiate or Die)

In the massively expanding world of virtualised services how can Cloud Service Providers stand out from the crowd and demonstrate that they are materially different? And secondly, how do you explain that your material differences are vital and critical for customer success? This is the dilemma today facing Leaders and Senior Executives at Cloud Service Providers, MSPs, System Integrators, Resellers, Distis and LARs.

So what is the answer to effective Differentiation in the Cloud?

problem-not-solution1. Being Relevant: It’s all about them and not about you. You need to have a deep understanding of your target customers, their challenges, their aspirations and their desired business outcomes from using your cloud services. If you can’t help your customers to “join the dots”, you are not going to have a high growth business. You are going to have to hope that the Customer can work this out for themselves, quantify the results they expect to get and make the decision to buy by themselves. This sounds like a very risky business strategy to me! Never delegate the Buying Decision to the customer. You must decide with them and for them. After all, they may get the decision wrong!

2. Differentiation: 3 Levels of Perceived Value

differentiation_3_levelsLevel 1: The Product /Service. If you are like most Cloud Service Providers you are building your offers on one of several Vendors infrastructure platforms: AWS, IBM or Azure or you are using key technologies such as VMware, Hyper-V, WebSphere or application solutions such as O365, Salesforce.com, CRM online, etc. So the question in level 1 is “how can I differentiate if my technology stack is the same as CSP A, CSP B or CSP C’s stack? Clear the thing that we all want to avoid is differentiating on price.

“Price is race to the bottom that you don’t want to win.”

There is some scope to differentiate using your own IP to create unique capabilities and offers based on the underlying infrastructure and core technologies. Infrastructure enhancements, data center security, usage extensions, custom templates, service bundles, pre-populated parameterisation, bundles and packages fall into this category. But levering your uniqueness in level 1 is limited.

Level 2: Professional Services and Support. Huge opportunities exist here to differentiate your core offers from your competitors and other Cloud Service Providers. Because everything in level 2 is unique to you and your company: your people, processes and systems. Often these areas of differentiation go totally under exploited by Cloud Service Providers and consequently remain unrecognised and unappreciated by customers. Here you have a huge undeveloped opportunity to differentiate in real and relevant ways and to liberate new levels of value for customers. Examples: cloud migration assessment services, on-boarding services, application and data migration services, Migration SLAs, security consulting services, big data consulting services, hybrid architecture consulting services, support services that enable business outcomes.

Level 3: The End2End Customer Experience. What are all those things that you can do as a Cloud Service Provider to deliver a superior experience to customers? By End2End you should be thinking from the customer’s point of view and at any point in the Customer’s Journey from Find, Try, Buy and Consume Cloud Services

Change the direction of your thinking:
Cloud Service Providers think Inside-out:
Product/Service -> Professional Services and Support -> End2End Customer Experience
The Customer thinks Outside-in:
End2End Customer Experience -> Professional Services and Support -> Product/Service

3. Linking your Uniqueness to the Customer’s Desired Outcomes
selling_business_outcomes

The Line-of-Business Buyer seeks three things:
1) Speed-to-use
2) Ease of Adoption
3) Measurable Business Value

 

Also see links to:
Competitive separation post
Workplace Transformation: How to Survive the Cloud slideshare
Sales Transformation: 5 Steps to Capture More Cloud Customers Keynote presentation (video)

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The Cloud = Change

CLOUD2IDC predicts that 70% of CIOs will embrace a “cloud first” strategy in 2016.

Talk to anyone about the Cloud today and you will hear a long list of advantages and benefits from flexibility to business agility to reduced operating costs to CAPEX -> OPEX and access to assets vs owning assets and all the resulting business benefits that accrue from these advantages.

“The rate of change in business today really puts you at a disadvantage if you make long-term investments in anything.” – a Customer

It’s all about the last letter of the word Cloud, the “D” = Delivery. And let’s be clear the Cloud is a game changer by enabling IT in so many wonderful, new and cost effective ways. But I think we miss the bigger benefit that the Cloud offers if we focus only on the “D.” of Delivery. Move your thinking to the first letter of the word Cloud, the “C”. C stands for Customers, Collaboration, Collective Intelligence, Creativity, Co-Creation, Change and Culture. These individual and collective human potential assets are all enabled and liberated by the Cloud.

“The only irreplaceable capital an organisation possesses is the knowledge and ability of its people. The productivity of that capital depends on how effectively people share their competence with those who can use it.” – Andrew Carnegie, 1835 – 1919

Conclusion: Move your thinking forward to the “C” at the beginning of Cloud, where the maximum benefit and potential for change, creativity and innovation lie. “C” ultimately equals Business Transformation. Provide your customers, your colleagues, your partners and your network with applications, tools and a usage experience that they truly want and they will reward you with high quality, high value work with high levels of commitment, engagement and personal fulfilment. The true promise of the Cloud is not limited to Operational Efficiency, but rather it is an enabler of Business Transformation.

The Cloud = Business Transformation

To Accelerate Customer Adoption of Cloud Services sell Business Transformation benefits first, then business agility and cost savings second.

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The Psychology of Adoption

Barriers_to_AdoptionIs the “Cloud” a Barrier to Customer Adoption? 

I was speaking recently with a colleague and friend in the Cloud eco-System. He is based in the UK and has pan-European responsibility for Cloud Services and he told me something extremely interesting. Fascinating in fact and I would like to share his insight with you. This is what he told me.

“I met with a number of Microsoft Partners last month. They were from the same geographical area, some large, some small and all selling Office 365 to SMB Customers. Some were highly successful with O365, others were not. What I was interested to understand was why? What accounted for this difference? Why were some highly successful, while others weren’t? I spent time talking to each of them individually searching for an answer to this intriguing dilemma. Did customer adoption correlate to the size of the Partner, the Partner’s knowledge of the product, or their training and support capabilities, or their size, importance and relationship with Microsoft? No, No, No and No. What I discovered was that there was one thing common to all the highly successful Partners and one thing that was common to all the unsuccessful Partners.”

Yes, I asked with great interest having my curiosity peaked. What was that thing? And the insight that he shared with me was the following:

“The highly successful Partners sold the product and the user experience. The unsuccessful Partners sold the “Cloud” and the benefits of the Cloud.”

Wow! What a powerful and transformational insight. The “Cloud” creates fear, uncertainty and doubt in the minds of prospects and customers who are considering moving to O365. It is this fear, uncertainty and doubt that is holding them back from making the decision to move forward and adopt O365. The word “Cloud” opens a Pandora’s box of fear in the customer’s mind. When you sell a product/service/solution like O365 you are selling the “F Factor” where F = Familiarity. ie. Certainty, predictability, the known, the tried and true. All of which creates a sense of confidence and comfort. The customer gets what he/she knows, understands and is familiar with, but he/she can now buy it in new and more flexible (Cloud based) offerings. The purchase decision has been made to adopt O365. Result = sale made. For those Microsoft Partners selling “Cloud” the Pandora’s box effect has moved the customer away from narrowing down choices and making a decision to go ahead. Result = no sale.

Insight: Focus your customers on how your offer will achieve their desired business outcomes. Remove fear, uncertainty and doubt from the decision making process by purposefully avoiding the “Cloud” conversation.

A final thought: The customer doesn’t want “Cloud”, you do.

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All Failure is Failure to Adapt

Adapt_or_Die_1What made you successful in the past will not make you successful in the future.

“What got you here will not get you there.” – Marshall Goldsmith

Using the past to understand the future

When we look to the past to understand the future we compromise our ability to envision change and see a different possible future. Never take it for granted that your last successes will continue into the future. In fact, your past successes may be your biggest obstacle: every situation, every market, every customer engagement is different, and you cannot assume that what worked before will work today or tomorrow. You must cut yourself free from the past and open your eyes to the present.

“In times of rapid change, experience could be your worst enemy.” – J. Paul Getty

Here are 3 things that hold most organisations back:

1. Defend and Extend Mindset

For most people and organisations success is believed to come from defending and extending what was done in the past, every day, every week, every month and every year. Success is believed to come from seeking out extensions to prolong what was previously done successfully. In Defend and Extend thinking the manager’s first priority is to understand the existing business and work to maintain and continue what worked in the past. This means focusing on core capabilities, core customers, core services, core assets, core functionality – whatever is considered core to the business – and firstly defending the core and then secondly looking for incremental opportunities to extend it. Having done this, Defend and Extend Managers believe that the future will successfully take care of itself. They believe that avoiding mistakes is their No. 1 priority and they believe that those who don’t screw up are more likely to succeed than those who take chances.Defend_and_Extend_26.01.14

The longer management tries to Defend and Extend its old business, the larger the Reinvention Gap becomes. The larger the gap, the less likely a business will ever reinvent itself, innovate and create new growth opportunities.

Creating growth = disrupting or inventing your business

2. Lock-ins

Lock-ins are driven by economic necessity and require the organisation to commit to a set of behaviours, structural process, or a cost base to achieve a perceived benefit. They effectively promote doing more of what worked in the past. Lock-ins create blindness to alternatives, reinforce the need to do more of the same and create sacred cows. Lock-ins create a culture of continuing the past at the expense of creating the future. They create a culture of maintaining the status quo.

Learn from the past, but don’t live there

3. Anchors

Anchors are those beliefs and values that tie your thinking to the fixed point in the past. Anchoring is a cognitive bias that describes the common human tendency to rely too heavily on the first piece of information offered (the “anchor”) when making decisions. During decision-making, anchoring occurs when individuals use an initial piece of information to make subsequent judgments. Once an anchor is set, other judgments are made by adjusting away from that anchor, and there is a bias toward interpreting other information around the anchor. Anchors are often expressed or justified as:

“we’ve seen this before, we need to do….”, “sure we tried that once and ….”, “Let’s ask Bill, he has over 30 years experience.”, or “that’s not the way we do it around here.”

Question: What are you going to do to break with the past and align your business with future growth?

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Not all Customers were Created Equal

Customer SegmentationAll customers are vital to your business, but some are more vital than others. Some customers provide significant revenue today but will decrease over time. Others are small today but have huge growth potential. Some customers demand enormous resources and support, while others don’t and some customers are great references, recommenders and a major source of new customers for your business.

“Good customers are an asset which, when well managed and served, will return a handsome lifetime income stream for the company.” – Phillip Kotler

Your customer base is not homogenous. It is made up of sub-groups that buy, consume and behave differently. If you want to accelerate adoption of your product or service you must accurately separate your customers into segments categorized by how they use your product/service and then align all your Sales and Marketing actions with those differences. Think: segmentation = divide and conquer. WARNING: Ignore customer segmentation at your own peril.

Key Questions:
1) Should you treat different customers differently?
2) How can you do this intelligently?
3) What is the best way to group or segment your customers?

“A meaningful segment is any group of customers that meets three criteria: they are identifiable by common characteristics, they are profitable, and they are growing.” – Brent R. Grover, Evergreen Consulting, LLC

Conventional segmentation criteria are*:

  1. Industry verticals
  2. Size of enterprises served (Small, Medium, Large)
  3. Geographies
  4. Age brackets
  5. Education levels
  6. Gender
  7. Everyone

*Segmentation criteria 1-3: B2B, 4-7: B2B Buyer Personas/B2C

A better segmentation method is to create customer segments based on the answer to this question:

“What job is the customer hiring the product to do?”Clayton Christensen

Confusing Customers with the Channel:
The first and highest payback question is about your customer’s business. “Do they integrate, add value, resell or distribute your product or service, or are they the End User/Consumer of your product or service? Failing to make this separation and confusing the two groups will result in serving each group inappropriately or at best ineffectively and will create considerable frustration for your Channel Partners and Customers alike.   

SUMMARY
Segmenting customers carefully can help you plan for the future, knowing where to invest and how to develop clear value propositions that appeal to the channel and customer segments. It can also help you maximise profitability by knowing which customer groups to protect, as well as those who require additional resources and support, and those who should be migrated to the competition.

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Thinking at 3 Time Horizons

3_Time_Horizons“Thinking is the hardest work there is, which is probably the reason so few engage in it.”Henry Ford

One of the defining characteristics of great Business Leaders, Managers, Entrepreneurs and Sales People is having an “Opportunity Mindset”. An opportunity mindset comes from being open and receptive to opportunity, which means being open and receptive to change. Change is all around us at multiple levels and is never ending. Highly successful people are comfortable with “change over time” and “change all the time” and can anticipate change and the opportunities that change will create.

“There are three basic aspects of thinking: 1. What is; 2. What may be; and 3. What can be.’ We are almost totally obsessed with ‘what is’. We underestimate the extremely valuable contribution that ‘what may be’ has made to progress. We do very little about ‘what can be’ even though our future depends entirely on this aspect.” – Edward de Bono

3_Time_Horizons_SlideBusiness Leaders, Managers, Entrepreneurs and Sales Professional who are serially successful have the ability to think at 3 different time horizons simultaneously. Horizon 1: Today (Now – 6 months), Horizon 2: Tomorrow (next 6 – 12 months) and Horizon 3: The Future (1 to 3 years out). Their success comes from being able to move from one time horizon to another and back again, constantly surveying and monitoring the business landscape for indicators of change and anticipating the consequent emerging opportunities.

Horizon 1: Tactics: Operational Horizon. Think – Price
Horizon 2: Annual Business Plans: Management Horizon. Think – Cost
Horizon 3: Strategy and Vision: Executive Horizon. Think – Value

3_Time_Horizons_Geoffrey_Moore“Creative thinking is not a talent, it is a skill that can be learnt. It empowers people, adding strength to their natural abilities, which… improves teamwork, productivity and, where appropriate, profits.”Edward de Bono 

“Thinking is easy, acting is difficult, and to put one’s thoughts into action is the most difficult thing in the world.”Johann Wolfgang von Goethe

Question: When was the last time you considered all 3 Time Horizons? Think short-term tactical, think mid-term manageable and think long-term strategic.

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Disrupt or be Disrupted

Adapting_to_Market_ShiftsThe enemy of transformation and change is the day-to-day. Maintaining the status quo, just doing what we need to do each day holds us back from moving into the future.

“Disrupt yourself, before someone else does. Disrupt yourself – to dominate the next wave of business, even if in the near-term it undercut your existing one.”Clayton Christiansen

‘Protect the base’ thinking makes total sense in the short term but makes you vulnerable in the long run to new competition as it stifles innovation, transformation and change over the longer term. The dominant firms of yesterday have at best a precarious hold on the success of tomorrow.

Dell built a hugely successful multi-billion dollar business on it’s ability to execute. Dell exemplified execution. Execution in sourcing components, execution in supply chain management, execution in low cost/high quality Just-In-Time assembly and execution in driving the channel to take huge shipments at the end of every quarter. So while the market demanded ever increasing numbers of PC, Dell dominated. Dell’s business model of constantly driving additional economies of scale through operational excellence kept Dell at the top for over 25 years. But when the market shifted (as all markets do) to Smart phones and Tablets, execution didn’t cut it any more. The market now wanted new and different, radically different. The market wanted innovation from PC vendors. Innovation was the new business model, the business model that would take Technology and PC vendors directly to the sweet spot of the business opportunity created by market shift. Innovation, not execution was the market maker.

S-CurvesWe all have 20/20 vision in hindsight. Looking back from where we are today this may seem obvious, but at the time who could see it coming and how? Certainly not those who had a vested interest in the continuation of the current business model, such as Dell management. After all they had over 100 quarters of proof that their business model worked and worked extraordinarily well. Those who could see it coming had to first imagine it, then create it, then get the market to want it. And that is all about innovation. Innovation at multiple levels; product innovation, marketing innovation, sales innovation and ultimately innovation of the underlying business model.

Execution is a powerful competitive advantage when markets are in high growth through to maturity. Innovation is critical to bring new technologies, products and services to market when shifts occur and the status quo loses it appeal to buyers.

“The ultimate success is to define future markets, and place yourself at the center of them.” – Aaron Levie, Founder & CEO, Box.net

Question: When was the last time you disrupted your business? Think: Market -> Market shift. Think: Product -> Product experience. Think: Customer needs -> benefits the customer might want tomorrow.

Takeaway:  Over the longer term Execution is tactical and temporary, Innovation is strategic and sustainable. The choice is yours: Disrupt or be Disrupted.

 

 

 

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Don’t Expect the Channel to Create Demand

Customer_Adoption• Your channel is an extension of your sales capability, not an extension of your marketing department

• The channel supports, services and fulfils customer demand

• Channels rely on the Vendor to invest in the brand, develop brand awareness, create demand, generate sales momentum and develop new market opportunities

• Building buzz, creating a Tipping Point and ‘Crossing the Chasm’ are all responsibilities of the Vendor, NOT the Channel

Customer Adoption is dependent on Technology Adoption. (see The Technology Adoption Curve) 

We want B, lots of B. That phase of sustained linear growth in revenue, units sold and market share.

Yesterday’s Conventional Wisdom: says build capacity to deliver B: The logic is, get ready they are coming. That means building out:

  • Direct sales force
  • Retail sales capacity
  • Demonstration centres
  • Value added resellers
  • Distribution network
  • Sales agents
  • Referral Partners
  • etc.

=> PUSH

Tomorrow’s Conventional Wisdom: says build A to get to B. The logic here is the fastest and most effective way to get to B is via A, so go do A now and massively.

A is all about creating a tipping point through word-of-mouth: and viral word-of-mouth, getting innovators and early adopters to tell their friends, acquaintances, colleagues, business associates to tell their friends. Think: social media. Think: audience of my audience.

  • Trails and evaluations
  • Recommendation
  • Referral
  • Testimonials
  • Quotation
  • Success Stories

By:

  • Tech savvy GenC
  • bloggers
  • Thought Leaders
  • Industry Analysts
  • Consultants
  • Journalists

=> PULL

The anatomy of content marketing - the heart of online success

Question: What are you going to do to accelerate Customer Adoption of your Products and Services?

Read blog post: Customer Adoption is the new ROI
View slideshare: Customer Adoption is the new ROI
Read Book: Crossing the Chasm by Geoffrey A Moore

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The Inescapable Digital Transformation: What's the Future for Business leaders in 2013?

Brian_Solis_Paris_14.01.13This week I had the privilege of listening to Brian Solis, Altimeter Group speak at l’Innovation au Napoleon Conference in Paris. Brian is a thought leader in the consumer revolution, the digital revolution, social media and the impact that these vectors of change will have on our lives and our businesses in 2013 and beyond. Brian is the author of several books on the subject including: Engage and The End of Business As Usual. His next book What’s The Future (WTF) will be published in March. You can pre-order it now from Amazon.

So what did Brian have to say?

Competing for Relevance: The power of the Network Effect is driving the need for business transformation. Failure to recognise and to respond to changes in consumer behaviour will ultimately result in business failure.

Open to Disruption: The rise of Generation C: the (always) Connected Customer has changed the game for ever. Traditional customers -> Digital Customers -> Generation C Customers. These people become an extension of who you are and who they connect with. They share experiences, beliefs and values in online conversations. Your goal is to spark conversations greater than this room by extending your reach, by using the reach of people in your network, group or tribe. Distinguish between conversations that talk to you AND conversations that talk through you, the audience of your audience.

Zero Moment of Truth: This is a shockingly obvious fact which confirms something we probably all know. People trust their peers the most. That is why people go to Youtube and customer review boards before they go to a corporate website. The goal therefore becomes how do you get people to share their thoughts and experiences (Moments of Truth) with their networks, groups or tribes at each step in their buying journey, decision making process or online interactions? This is the new frontier of tomorrow’s marketing.

Tomorrow’s Touchpoints: What are they for your business and how quickly can you include them in your regular business operations? Build marketing channels and sales channels that will maximise interaction of customers with your business. Remember it is a two way street. These touchpoints will create “Share of Voice” and “positive sentiment”, or not!

Alignment Hierarchy: Marketing -> Social Science -> Digital Behaviourism. Demographics -> Psychographics. Media -> Social Media. Mass market thinking -> Interest graph thinking. At one level we have: Actions and Tactics <-> Purpose and Values, and at another level we have Aligning Sales and Marketing, and channels to the Buyer’s Journey or the Hero’s Journey.

Organisational Evolution: Creating of new roles around “digital behaviour” with job titles that explain their ‘raison d’etre’ such as: CEO -> Chief Experience Officer. CIO -> Chief Innovation Officer or CDO = Chief Digital Officer

“We’re entering an era of reciprocity. We now have to engage people in a way that’s useful or helpful to their lives. The consumer is looking to satisfy their needs, and we have to be there to help them with that. To put it another way: How can we exchange value instead of just sending a message?” –  Jim Lecinski

 

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