Year: 2014

Last week I covered why I’m not a fan of the “SWOT Analysis” – the four arbitrary lists of strengths, weaknesses, opportunities and threats that often pass for so-called strategy.

So what’s the alternative?

Think of three landscapes: 1) the industry landscape, 2) the macro landscape, and 3) the internal landscape. The industry landscape takes into account market segments and dynamics, customers and prospective customers, competitors and prospective competitors, and suppliers. The internal landscape reflects the state of your offerings, people, processes, structure, assets and financials. The macro landscape considers the social, technological, economic, environmental and political factors that can influence the other landscapes.

A three landscapes approach beats a SWOT analysis because: 1) it provides meaningful context for analysis, 2) the landscapes are researched, conclusions drawn and implications identified prior to the strategy meeting, and 3) the implications are then subject to validation, and relevant strategic options are identified, evaluated, prioritized and decided upon.

The result: context-driven strategy based on research, validation and prioritization.

Your thoughts?

Michael

Ask leaders about which tools they use for strategic planning and the most common reply is a “SWOT Analysis”. Which stands for strengths and weaknesses (internal), and opportunities and threats (external). And why wouldn’t every organization want to know about these?

The problem lies in how organizations come up with and utilize the information. Too often it’s simply the output of a brainstorming exercise. Everyone on the strategy team offers their opinion. (It’s amazing how “our people” is always identified as a strength.) And even if the exercise is data-driven, filling in the four quadrants doesn’t provide any context. Are your strengths truly strengths compared to your competitors? Are they relevant to the current and/or emerging needs of your business? Should you develop them or should you shore up your weaknesses? And what of opportunities and threats? Do all of them require action? Do any of them? What action? How would you know?

Too often the so-called SWOT analysis produces nothing more than lists of items. And then arbitrary action. That’s not strategy.

There’s a better way. That’s the topic of next week’s blog.

Your thoughts?

Michael

Most organizations have goals. Multiple goals. Too often what’s not clear is the relative priority among the goals. And which goal ultimately takes precedence. Worse, I often hear leaders say that every goal is a top priority.

When everything is a priority, nothing is a priority. In the mountaineering world, this could be fatal. The great guides I’ve climbed with have always been totally clear on the number one goal: To not take excessive risk. That trumps everything else.

I’ve been on a climb when the head guide ordered a member of our party to go down (escorted by another guide) because he was simply too slow. And if we didn’t summit and start to descend by a certain time the threat of avalanche would be heightened. When the climber vigorously protested, the guide threatened – forcefully and rightly – to turn the entire party around because he wasn’t going to subject everyone to undue risk. The climber went down.

Generally, the number two goal is to summit, and the number three goal is to have fun. This is an important distinction. Because if it comes down to a choice between summiting and suffering on the one hand (because your heart is hammering, your lungs are gasping and your fatigued legs feel like rubber), or not summiting and not suffering on the other, then be prepared to suffer. Goals are goals, and priorities are priorities. If everyone is truly committed, then suffering is simply the price you pay to achieve the goal. And when all is said and done, climbers will be thankful that the guide pushed them to achieve the summit, pain and all.

Application: Prioritize your organization’s goals. Then make sure your people know and understand that hierarchy. Create teaching scenarios of hypothetical situations that set up a potential conflict between goals (example: customer service vs. cost). Ask your people how they would respond and why.

Your thoughts?

Michael

With all the talk about analytics in business, you might think that the goal of collecting data is analysis – to describe what happened and explain why it happened.

Elite organizations realize the goal is not simply to analyze, but to anticipate and act. Meaning, to project what will happen and influence what they want to happen.

Consider the makers of Kleenex, Kimberly-Clark. They use a web-based, cold-and-flu prediction tool (called “Achoo”) that uses data from multiple sources – including vaccination rates and even bird migration patterns – to predict location-specific outbreaks of cold and flu. In order words, they analyze to anticipate.

Then they act. They direct their marketing and promotional efforts – such as coupons and samples – to those locations about to be affected. That drives sales and keeps Kleenex ahead of the competition.

Analyze, anticipate, and act. The purpose of analytics is to drive outcomes.

Your thoughts?

Michae

You may not have heard of him but you’ve heard of his product. General Mikhail Kalashnikov, a role model for opportunism and innovation, recently passed at the age of 94. His legacy lies in more than 75 million units of the automatic weapon found around the world: the AK-47.

As a wounded soldier in the Second World War, he would listen to his infantry comrades complain about their unreliable weapons. He became intrigued with the possibility of designing a more reliable weapon, something of obvious and great importance. Putting existing components into an exceptionally robust configuration, he designed a weapon that was easy to use, easy to repair and very reliable regardless of climate. In business terms, he identified the most crucial, unmet “value-drivers” for a “market segment.” Add that the AK-47 was easy to assemble, and it’s no surprise it inspired countless knockoffs.

Kalashnikov didn’t reap the big dollars from his efforts that a modern-day entrepreneur might. Yet he serves as a role model for seeing opportunity in the face of frustration, understanding the key value-drivers, and innovating a practical solution. Market-driven innovation at its finest.

Your thoughts?

Michael

The Seattle Seahawks won their first Super Bowl in dominant fashion on Sunday. And as the youngest Super Bowl winning team ever, they are early favorites to retain their title next season.

Unless, of course, they succumb to the greatest threat organizations face in the wake of success.

Complacency.

Seahawks coach, Pete Carroll, who also won a championship as a college coach at USC, is sensitive to the threat. Fearing complacency as the Seahawks regularly won throughout the season, Carroll continually instilled in his team “1-0 mentality”. Translation? Any win simply means there’s an opportunity to go 1-0 the following week. Winning doesn’t carry over to the next game.

Is Carroll unique? New England head coach Bill Belichick, who has won three Super Bowls and is notoriously dissatisfied, said, “If you sit back and spend too much time feeling good about what you did in the past, then you’re going to come up short the next turn at bat.”

Nick Saban, who has won four college football titles as a coach and is a certified perfectionist, is on exactly the same page. “Complacency is always an issue when you have success. It’s what we have to fight to overcome.”

Carroll, Belichick and Saban know what happens after the win and take action. Do you?

Your thoughts?

Michael