Bob Rinderle / Business & Beyond

Good Strategy, Bad Strategy

I was hooked on this book by Page 5.  Excerpts below:

"Good strategy is almost always simple and obvious and does not take a thick deck of PowerPoint slides to explain.  It does not pop out of some 'strategic management' tool, matrix, chart, triangle, or fill-in-the-blanks scheme.  Instead, a talented leader identifies the one or two critical issues in the situation - the pivot points that can multiply the effectiveness of effort - and then focuses and concentrates action and resources on them."

"Good strategy is the exception, not the rule.  And the problem is growing."

"Bad strategy tends to skip over pesky details such as problems.  It ignores the power of choice and focus, trying instead to accommodate a multitude of conflicting demands and interests.  Like a quarterback whose only advice to teammates is "Let's win," bad strategy covers up its failure to guide by embracing the language of broad goals, ambition, vision, and values."

Starbucks No. 3 Food Chain

According to Advertising Age, "Last week Starbucks blasted past Wendy's and Burger King to become the No. 3 restaurant chain, posting $9.07 billion in domestic restaurant sales last year, up 8.7% from 2009. For a company that's outspent on advertising anywhere from two to eight times by rivals and just a few years ago faced 600 store closings and negative sales, that's quite an achievement.

At the heart of that turnaround are menu and product innovations, and the ability to maintain steady price points—which tend to be higher than other chains—even through a recession.   

'It's more about just cultivating a brand than traditional advertising,' said Morningstar analyst RJ Hottovy. 'Once you've got a brand consumers' love, they're going to continue to visit the store. Plus, Starbucks has done its advertising more efficiently. It's been all over social media, mobile payments—stuff that elevates the image of brand."

 

Even Though It's Social, It Still Needs A Strategy

Social media doesn't start and end with the publishing vehicles; social is only one piece of an effective content, and customer engagement, strategy.

While it may seem obvious, in my job, I have to explain this on a regular basis.

 
Source: http://fjrodriguezg.tumblr.com/post/2101032155/social-media-iceberg-diagram 

Branding In The Digital Age

The Internet has upended how (we) engage with brands. It is transforming the economics of marketing and making obsolete many of the function's traditional strategies and structures. For marketers the old way of doing business is unsustainable.

The changes buffeting marketers in the digital era are not incremental, they are fundamental. Perception of a brand during the decision journey has always been important, but the phenomenal reach, speed, and interactivity of digital touch points makes close attention to the brand experience essential, and requires an executive-level steward.

From Branding In The Digital Age, by David C. Edelman; HBR December 2010

The Myth of Differentiation

It has become apparent that competitive differentiation is a myth.  Or to put it more precisely, in category after category, companies have gotten so collectively locked into a particular cadence of competition that they appear to have lost sight of their mandate - which is to create meaningful grooves of separation from one another.  Consequently, the harder they compete, the less differentiated they become.

From Different: Escaping The Competitive Herd, by Youngme Moon.

 

Barbarians At The Gate

Should have read this 20 years ago, but still a powerful story.  

Barbarians At The Gate reinforces my belief that regardless of a company's size, change only happens when the right combination of people - and not always the top people - align to act.  

And that in and of itself doesn't always guarantee that good things will transpire.

Still, it is impossible to overstate the inherent power of informal networks of influential people.

 

Money Drives Strategy

Money influences behavior.

Behavior informs strategy.

Therefore, money drives strategy.

Marketing Is A Skill

If companies do not move marketers into engineering roles, why do they move engineers into marketing roles? 

The historical long tail of crappy advertising and poorly conceived marketing programs provides voluminous proof that marketing in the hands of the wrong people often leads to bad things.

Marketing is a skill that delivers tangible financial benefits.

Stop Measuring Hours and Angst

Hard Work's Overrated, Maybe Detrimental.

That's the title of a great article by Caterina Fake in FastCompany about knowing what to work on and the importance of patterning (rather than relentlessly throwing hours against a project to see what sticks). 

Unfortunately, it is still too common for the C-suite to measure quantity over quality (anyone talk to you about billable hours, FTEs, and timesheets lately?). 

I guess hours and angst are still easier to understand than creativity and innovation. 

Customer Value Versus Shareholder Value

I've long railed against shareholder value as the driving economic principle for public companies. Obviously corporations are in business to make money, and shareholders deserve to reap the rewards of their investments.  But as the excellent Peter Drucker stated decades ago, profit is not the explanation, cause, or rationale for business strategy, but rather proof of its validity.

The purpose of business is to create a customer.  And to do this, companies must have something of value (and desire) to sell.  Who has better shareholder value - Apple or GM?  Who as more desirable products - Apple or GM? 

Given my bias against managing enterprise value according to quarterly profit goals, I was shocked and pleasantly surprised to read Shoshana Zuboff state the following in Businessweek:

"As a professor at the Harvard Business School, including 15 years teaching in the MBA program, I have come to believe that much of what my colleagues and I taught has caused real suffering, suppressed wealth creation, destabilized the world economy, and accelerated the demise of the 20th century capitalism in which the U.S. played the leading role....  Under the flag of shareholder value (a concept honed by HBS faculty and glorified in many of our courses), firms also turned to financialization....  a typical indicator of economic decline."