What is Strategy? Strategy Day at EO Accelerator

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Ft. Worth Accelerator Strategy Day

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Tim Hamilton Introduction

Company: Agile product & platform development Founded in 2000Offices in Austin, TXTradition: Formal Fridays

Background: Born in South AfricaWife: Christy + 1 on the wayCat personStudied Econ & MIS at UT






Ground Rules

One conversation.Confidentiality.Trust & respect.

Peers.Gestalt.






Sources






Three ingredients to success: "Disciplined People. Disciplined

Thought. Disciplined Action.”

– Jim Collins






Value Proposition

Hair on Fire Issue

Words You Own

Central Idea

Core Purpose

3 Brand Questions

Brand Promises

BHAG

Value Discipline

Empirical Creativity

Productive Paranoia

SMaC Recipe

Catalytic Mechanism

Disciplined Action

Hedgehog Concept

Reverse EngineerDisciplined Thought

Meeting Rhythm

MaybePlan for the Day






What is strategy?How are we going to grow top line

revenue?






”The job of the CEO is not to run the company. The job is to grow the

company.”– Jack Daly






"Strategy is the art of exclusion."

– Unknown






“If you have any issues with happiness in your business, then you must start with people. If you have revenue or growth issues, then strategy is the thing to focus on. If

profit or time is a key issue, then you have execution issues.”

– Verne Harnish






The most important person in strategy is…

the customer.

Value Proposition Hair on Fire Issue Words You Own Central Idea Value Discipline






“I can’t tell you the key to success, but the key to failure is trying to please

everyone”

- Ed Sheeran






Purchase decisions are made emotionally,

not intellectually.

The first step to strategy is empathy.





http://www.apple.com



































From your perspective…what’s missing, wrong or

insane about your industry?











https://www.youtube.com/watch?v=HiB9L3dG-Aw



































68%






Now, we’re going to choose what uncommon

offer we want to be known for.







“Software that’s for sure.”






Next up, the central strategic idea.







“Strategy is not a lengthy action plan. It is the evolution of a central idea through continually changing circumstances.”

Jack Welch






#1 or #2 or exit.






Be profitable and democratize the skies.






Inbound marketing is in. Outbound is out.






Become the safest choice for outsourced software development.






Build & manage systems and facilities

for high volume repetitive

tasks.

ID, attract and build relationships with

customers.

Conceive of attractive new products &

services and commercialize

them.

Product Innovation

Operational Excellence

Customer Intimacy

Three Generic Strategies






A focus on the core processes of invention, product development, and market exploitation.

Product Leadership

InnovationKnowledge-ManagementCollaboration

• Providing products / services that continually redefine the state of the art.

• Kill their babies.• Key core competencies are innovation

and quality control.• Strive to be the best.• R&D & talent management.






• Total solution, not just a product or service.• Focus on what the customer wants, not what

the market wants.• Cultivate relationships, not one time

transactions.• Specialize in satisfying unique needs.• Customer needs trump operating systems and

processes.• Go the extra mile.

Customer IntimacyAn obsession with core processes of solution development, results management and relationship management.

Relationship ManagementKnowledge

Management






• Low cost offer (blend of high convenience and low price).

• Broad market focus.• Not product / service innovator; instead

delivery innovators.• Do not cultivate 1:1 customer relationships.• Execute extraordinarily well.

Operational Excellence

QualityCostSpeed

Processes for end-to-end product supply and basic service that are optimized and streamlined to minimize cost and provide hassle-free service.






Why is this important?






“No company can succeed today by trying to be all things to all people. We must instead find an uncommon value to deliver to a chosen market.”

– The Discipline of Market Leaders






Have you chosen your market? Or is

your market choosing it for you?






“Selection of a value discipline shapes every subsequent plan and decision a company

makes, coloring the entire organization from its core competencies to its culture.”– The Discipline of Market Leaders






Does your strategy inform every decision

you make today?






How do the founders spend their time?What key messages did you pick up on?

What value

Video Case Studies






Decision making at the lab.

Product Leadership: Pixar

Culture & Competencies

Employee centered.

Coddling the creative stars.







Goals & Objectives

While productivity is a goal…

…quality & originality are the goal.






" ... [Steve Jobs] wanted there to be mixing. He knew that the human

friction makes the sparks, and that when you're talking about a creative endeavor that requires people from different cultures to come together,

you have to force them to mix; that our natural tendency is to stay isolated, to talk to people who are just like us, who

speak our private languages, who understand our problems. But that's a big mistake. And so his design was to force people to come together even if

it was just going to be in the bathroom.”

- Imagine, Jonah Lehrer







Product Leadership: Toyota

Environments that promote collaboration

W. Edwards Deming






Customer Intimacy: IBM

Best price? Hardly.

Best products? Nope.

Latest technology? Negative.






It’s about the total solution.

Methods for planning new business applications.

Training management.

Providing explanations of increasing costs.

Aided with diagnosis and resolution of problems.

Upgrading & maintaining systems.


Providing the best overal result for client.






Culture & CompetenciesDe-centralized decision making.

All activities are aligned to customer needs.Deep customer knowledge.

Not cheapest offers or most innovative.Eco-system of partners for production & delivery.


Tailored / personalized service / products to fit needs.






Operational Excellence Example: Ikea

Luxurious show-room? No.

Best in class quality? Nope.

Helpful sales staff? Negative.






Operational Excellence Example: Ikea

Culture & Competencies

Cost focused.

Stresses standardization.

Predictability and efficiency are key.

Centralized decision making.

Rules based operations.






But aren’t these all really big companies?






Customer Intimacy: Trunk Club






Review & Break

Value Proposition

Hair on Fire Issue

Words You Own

Central Idea

Core Purpose

Brand Value Pyramid

Brand Promise

BHAG

Value Discipline

Hedgehog Concept

Disciplined Thought






Could be best at

Passionate about

Economic engine

Core Purpose BHAG Brand Value Pyramid Brand PromiseHedgehog Concept








































What could you be the best in the world at?

Hint: You might already doing it… but you can’t tell.








































Economic Engine: What’s your profit per X?






“What’s the one thing I can do such that by doing it everything else will be easier or unnecessary?”





https://www.youtube.com/watch?v=yGf6LNWY9AI



































Wheels Up.






What are you deeply passionate about?

Core Purpose up next… in the meantime, let’s take a 10 minute break.






Core Purpose: Simon Sinek









































Apple’s Why





https://www.youtube.com/watch?v=8rwsuXHA7RA



































Big Hairy Audacious Goal (BHAG)







A grand call to inspire action to greatness.

Your emotional mission statement.






"A true BHAG is clear and compelling, serves as unifying focal point of effort, and

acts as a clear catalyst for team spirit. It has a clear finish line, so the organization can

know when it has achieved the goal; people like to shoot for finish lines."

– Jim Collins










https://www.youtube.com/watch?v=kwFvJog2dMw



































“A computer on every desk and in every home running

Windows.”– Bill Gates, 1980






More from Jim Collins…

http://www.jimcollins.com/media_topics/building-greatness.html#audio=97

http://www.jimcollins.com/media_topics/flywheel.html#audio=93







http://www.jimcollins.com/media_topics/flywheel.html#audio=93


Four Types: Target Oriented Become a $125 billion company by year

2000. (Wal-Mart, 1990)

Become the dominant player in commercial aircraft and bring the world into the jet age.

(Boeing, 1950)






Four Types: Competitive

Crush Adidas. (Nike, 1960s)

Yamaha wo tsubusu! We will destroy Yamaha! (Honda, 1970s)






Four Types: Role Model

Become the Nike of the cycling industry. (Giro Sport Design, 1986)

Become as respected in 20 years as Hewlett-Packard is today. (Watkins-Johnson, 1996)






Four Types: Internal Transformation

Transform this company from a defense contractor into the best diversified high-technology company in

the world. (Rockwell, 1995)

Transform this company from a chemical manufacturer into one of the preeminent drug-making companies in the world. (Merck, 1930s)






Brand Value Pyramid







Meets desires.

Emotional benefits.Meets unrecognized needs.

Values & beliefs. Evangelism

Commitment

Satisfaction

Meets customers’ expectations.

Functional benefits & attributes.






• Product design • Technology • Engineering expertise • Agile Scrum

• Web & mobile architectures • Digital strategy & facilitation • ClickModel prototyping • On-budget / on-time delivery

• The safe choice • No surprises • 68% failure no more • In control

• Security • Trust • Dependability • Confidence

• Transparent • Accountable • Clarity • Indispensable

• Your unfair technology advantage. • You deserve to discover your unfair advantage. • You are capable of so much more than you think. • Your vision is your legacy - bring it to life.

Functional benefits

& attributes.

Emotional benefits.Values & beliefs.






“My project is completed on time and budget.”

Meets

Expectations “There weren’t any surprises in the course of my project.”

“I can experience the solution before I cut the big check to build it.”

“The process is free from risk and I completely trust my partner.”

“They understand and care about my business more than I thought possible.”

“The were efficient, accountable and transparent.”

Meets

Desires

“I see new possibilities for my organization as a result of our work together.”

“Astonish is like my unfair advantage. What can we work on next?”

“What I thought I needed was a web app, but what I got was more valuable: a partner.”

“Yep, that’s pretty much what I expected.”

Meets Unrecognized

Needs






Three Brand Value Questions:

What does it say about your

customer that they work with your company?







What is the singular thing that a customer can get from their relationship with you that

they can’t get anywhere else?







How do you make the customer a hero in his or her story?






Brand PromiseThe different, unique, uncommon way you

solve customer’s greatest need.







Pizza delivered in 30 minutes or less or it’s free.






RackSpace manages hosting solutions and when client’s systems go down, it’s never a good thing. So it promises to get hardware fixed in one hour or it’s free.

It also realizes that its customers hate to wait on hold so it promises to answer the phone in 3 rings or less, and to make sure that the customer can get their problem fixed within one transfer.






If your beverage is not made to your full enjoyment, we’ll replace it with one that does.






Style at a low cost.






3LFs: Low fares, lots of flights, lots of fun.






Peace of mind.






The Smart Way to PrototypeEnvision your custom software idea or website before

committing the resources to build it out in full.

& cost effectiveV

ClickModel℠ User Experience Prototyping






More important that you start than it is that you get it perfect.

Iterate






“Vision is just about picking which problems you want to work on.

Success means your problems get better.”

– Ari Weinzweig






How to work on strategy?






"As leaders. you don’t need to have any answers. Your job is to nail the question and

then figure out who to involve to correctly answer the question.”

– Verne Harnish






"Whether you want to live a certain thing should be the only criteria with which you decide whether to give it attention or not."

–Unknown






Abundance & scarcity vs. belief in oneself to adapt and survive.







Productive Paranoia

SMaC Recipe

Catalytic Mechanism

Disciplined Action

Reverse Engineer

Meeting Rhythm

Maybe






Reverse Engineering






Meeting Rhythm






Productive Paranoia






“Specific, Methodical and Consistent."

SMaC Recipe

In 1979, then CEO of Southwest Airlines, Howard Putnam was facing a massive shift in the competitive landscape: the de-regulation of the airline industry. Faced a tough question: “Does radical change in our environment call for inflicting radical change upon ourselves?






- Remain a short-haul carrier, under two-hour segments.- Utilize the 737 as our primary aircraft for ten to twelve years.- Continued high aircraft utilization and quick turns, ten minutes in most cases.- The passenger is our #1 product. Do not carry air freight or mail, only small packages which have high profitability and low handling costs.- Continued low fares and high frequency of service.Stay out of food services.- No interlining….costs in ticketing, tariffs and computers and our unique airports do not lend themselves to interlining.Retain Texas as our #1 priority and only go interstate if high-density short-haul markets are available to us

etc.






Catalytic Mechanism





What is Strategy? Strategy Day at EO Accelerator

Technology

Transcript of What is Strategy? Strategy Day at EO Accelerator