Archive | Competitive Strategy

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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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 End of Certainty: The Beginning of Creativity?

End_of_Certainty_1“The future ain’t what it used to be.”Yogi Berra

We are in a period of massively disruptive and unprecedented change. One of the first victims of massive and disruptive change for many businesses today is certainty. There just doesn’t seem to be enough certainty left in the world to go around. More than ever before we are confronting uncertainty, and its two siblings ambiguity and contradiction.

You are probably thinking: “Wow, that is a lot of bad news all at once.” Well, I would encourage you to think again. Maybe, just maybe, we are entering a period of enormous opportunity, possibility and choice. Why? Because uncertainty, ambiguity, contradiction and chaos are the necessary ingredients for experimentation, innovation and creativity.

“The quest for certainty blocks the search for meaning. Uncertainty is the very condition to impel man to unfold his powers.” Erich Fromm

Uncertainty, ambiguity and contradiction are the fertile ground of creativity.” – Deepak Chopra

ExperimentationWhat are the 6 keys to creativity?

  • Insight
  • Intuition
  • Imagination
  • Intention
  • Inspiration
  • Choice making

How can you bring about a collective shift in thinking in your work place to move people to the new paradigm of abundant and unlimited creativity?

  • Adapt endlessly. Become open to the unknown by suspending the need to know and the need for certainty. Experiment, explore, inquire and question the future.
  • Get comfortable with ambiguity and contradiction. Become more mentality agile by re-framing the question, changing your mind and challenging your assumptions, values and beliefs.
  • Start practicing “Intelligent Adjacency”. What are the logical extensions or possible connections that you can make? Where could adjacency-thinking lead you?
  • Relinquish entitlement-based thinking. Stop trying to maintain the status quo. Forget about what you think you are entitled to. Let go of the past so that you can move into the future.

Take Away: Certainty -> Uncertainty. Uncertainty -> thinking creatively about the future you want to bring about. Uncertainty is the new Certainty

Question #1: Are you a ‘prisoner of the past’, a ‘victim of the present’ or someone who is creatively ‘shaping their future’?

Question #2: What are you doing to accelerate your personal and organisational creativity?

 

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Customer Adoption is the new ROI

Customer Adoption is the ultimate measure of Return On Investment. Period! I hear a lot of people talking about ‘Time to Market’, but I don’t think that this is what they really want to achieve. “Great, we have our new offer in market, but the channels aren’t familiar with it…..yet”, or “customers cannot find it on our website…..yet”, or “we cannot handle orders over the phone…..yet”. So, what is the use?

Time to Market is necessary, but not sufficient.

Time to Market, based on this definition, is a misguided and a delusional goal. A far more meaningful and useful goal to aspire to, to plan for and to measure is ‘Time to Revenue’. The two metrics may be used interchangeably but I would argue that this is a dangerous error. Because the difference between Time to Market and Time to Revenue is Customer Adoption. (see diagram)

Time to Customer Adoption:

“There is more to success than hard work.” – Anonymous

What are the drivers of adoption and what are the barriers to adoption? And how can we align with those drivers and overcome the barriers when potential customers are evaluating and considering purchasing our products and services?

Consumer psychologists tell us that dissatisfaction is the beginning of all behavior. If we were not dissatisfied, we would simply stick to what we have. There would be no need to change what we do. The gap between where we are now and where we want to be is what drives us to make changes in our lives, and of course that is what makes us change the products we own and the services we consume. Geoffrey A. Moore’s work on “Crossing the Chasm” tells us that Innovators and Early Adopters will be cognisant of their dissatisfaction and unmet needs and take positive action to resolve them. Customer adoption then is all about helping the early majority and other post-chasm customers to feel the need and follow the lead of the Innovators and Early Adopters.

People make emotional decisions that they then rationalize and justify with logic.

Success means eliminating Barriers to Adoption:

1. GAIN vs PAIN. If the perceived GAIN is less than 10 X the perceived PAIN, then the effort (also PAIN) to change will be considered as insufficient to be worthwhile. Business Implication: Sell the PROBLEM, not the SOLUTION. Use a diagnostic conversation to help the customer probe for PAIN. Take them to the negative future. Let them ‘wallow in the PAIN.’ Then take to the positive future, to the un-troubled state where they can enjoy peace of mind AND then show them how they can get there with minimum time and minimum effort by adopting your products and services.

2. Align with consumer’s self-perception. Consumers choose products that are consistent with their perceptions of themselves and reject those that are incongruous with them (Sirgy, 1982). Business Implication: Determine what you stand for as a Company, your core values and then align your product, service and company values with those of your target customer groups.

3. Re-frame the Customer’s Perceived Risks:

Uncertainty leads to “no decision”. And uncertainty in business has never been higher than it is today. Business Implication: Cloud Computing and SaaS are a perfect antidote or cure for business uncertainty because they put control back in the hands of the business. As one customer said: “The rate of change in business today really puts you at a disadvantage if you make long-term investments in anything.” That is an outstanding endorsement of the benefits of the Cloud.

Question: What are you going to do to accelerate Time To Revenue by maximising Customer Adoption of your Products and Services?

Read blog post: The Buyer’s Journey Part 2
Read blog post: The Buyer’s Journey Part 1
View slideshare: Customer Adoption is the new ROI
Read Book: Outside in: The Power of Putting Customers at the Center of Your Business

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The Buyer’s Journey: Align your Sales and Marketing actions with the way customers buy

The old rule in sales ABC “Always Be Closing” has passed its use by date. Today ABC would serve us better if it stood for “Always Be Changing”. And this rate of change has never been more challenging for Sales and Marketing because business as usual has come to a sudden end as power has shifted from the Vendor to the Customer. The world has changed and this has created 2 game-changing mega shifts:

Mega Shift #1. B2B shifts to B2C: Here I see two emerging types of consumers: Corporate Consumers and Connected Customers.

Corporate Consumers are those people in the organisation who have a problem and have or can find budget to fix it. Think of the VP of Sales who is trying to prepare his sales forecast for the board the next day. He trials/buys a single user license of salesforce.com, then gets his direct reports to start using it and 6 -18 months later the entire organisation is using it. Corporate Consumers are those individual decision makers in the company and are the entry point to corporate adoption.

Connected Customers are always online and do or want to do everything online. Connected customers navigate a large part (60% to 70%) of the buying decision with information gathered online before contacting a representative of the vendor or services provider. They are influenced by, and share their buying experiences (good or bad) with, their network of professional and personal contacts.

Mega Shift #2. The Sales Cycle shifts to The Buyer’s Journey:

The impact of the shift to Corporate Consumers and Connected Customers is this. If the Decision Maker (buyer) is different then in all probability the way he/she makes buying decisions will be different also. Therefore, you must align the way you sell with the way these people want to buy. In other words the Sales Cycle is dead, long live the Buyer’s Journey!

“The best way to succeed in sales is to make the buying experience irresistible” David Ednie, President & CEO, SalesChannel Europe

“Do what you do so well that they will want to see it again and bring their friends.” – Walt Disney

The Buyer’s Journey (see graphic, with special thanks to Tom Russell of Meeting Magic) is what is critical to creating happy, satisfied and delighted customers. The Buyer’s Journey is a series of sequential steps that we all go through when making a buying decision. It starts with SEARCH, which is done online today. Followed by FIND, where we get a number of options or alternatives to consider. We then QUALIFY our selection down to 1 or 2 possible solutions. This is followed by TRY. Here we evaluate our qualified choices by testing it out in a trial usage evaluation. The next step is BUY. Assuming that the trail experience is positive we will go ahead and buy the Cloud service and start using it immediately. To do this we need to ACTIVATE the service and that is usually the trigger point for being billed for the service. The next step is MANAGE, which is where we configure the service by setting parameters and preferences, etc. The next step is UP-SELL. Here we have the possibility to purchase additional functionality, capacity or performance as needs require. SUPPORT is the next step. Here we get resolution to problems and questions that arising from using the service. The last and final step in the Buyer’s Journey is REFER. People tend to share highly positive (and highly negative) experiences with others. We will tell anyone who will listen about what a great choice we made if we were genuinely delighted with our experience at each and every step in the Buyer’s Journey. This is where shared experiences can go viral and you can turn your customers into your unpaid sales force. Refer is therefore an enormous ‘multiplier moment’ opportunity (and a threat). An enormous threat if the customer experience is bad or sub standard and an enormous opportunity if the customer has a great or better than expected experience. Creating satisfied customers is not enough. Creating delighted customers is better but still insufficient. Today, you must create devoted customers and then get them to share their devotion with others.

Question: Have you aligned your Sales and Marketing actions with your Buyer’s Journey?

Read blog post: The Buyer’s Journey: The 5 steps of the Buyer Decision Process

View Slideshare: Tipping the funnel: Make your customers your unpaid sales force

Read the book: The End of Business as Usual by Brian Solis

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Competitive Separation*

Competitive Separation is what makes you or your offer unique, unmatchable. The more unmatchable your offer is, the great the level of competitive separation. Step 1. Determine your current level of Competitive Separation. Step 2. Determine your Aspirational level of Competitive Separation and Step 3. Create a plan to get there.

1. What makes you different?

What makes you different? What are your “Crown Jewels”? Why should your customers care about this difference? How can you leverage this difference to capture new customers and enter new markets? And finally, are you going to develop or acquire your “Crown Jewels”?

“Crown Jewels” are your unique assets that are proprietary to you, hard for competitors to replicate and highly valued by customers. They can be technology patents, size of installed base, disruptive business model, domain expertise, skills and capabilities that are unique to your company. That if developed and positioned properly create sustainable advantages that enable real and measurable competitive separation. We all have them. Sometimes we don’t know what they look like or where they are hiding in our organisation.

2. Who is in your Competitive Set?

Most of us live within the confines of our competitive set. A competitive set consists of you and every other company/capability/offer/product or service that customers perceive as comparable or equivalent. ie. Your customers view you as potential substitutes. Do you have a well-worn list of usual suspects that you compete with? Who is in your Competitive Set today? Should they be? Who will be in your competitive set in 3 years from now? Who would you like to include in your competitive set? Continue Reading →

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