4 Strategic Tools for the StreetSavvy Business Executive

In my last blog we shared some power tools that StreetSavvy Business Executives can use to help find the path for profitable revenue growth. I used this information in a talk I gave at UCI Applied Innovation to 100 plus budding entrepreneurs and sitting executives.

Now, I want to provide 4 additional tools to help with the direction and management of strategic initiatives which will help StreetSavvy Business Executives find their true north and set the stage for executing their plans.

Scenario Planning and Visioning

Scenario planning and visioning is a tool that has less structure than some of the other tools in this compendium. Yet is a powerful tool to be used by executives, department heads, and teams to construct the vision of where that organization is heading and the outcomes to be achieved. I started using this tool in the 90s when I was heading marketing at a wireless company. Given the competition that was coming about due to changing regulations and changing technology and due to the increasing use of the internet, it was time to think about where we needed to be heading.

Our visioning exercise was used to determine not only where we wanted to go, but also to ensure there was alignment among the executives in carrying out the strategic and business plans.

To do this correctly, each executive or team member has to address different questions including some of the following questions. They do this by visualizing a future state as if they walked in the shoes of their customers, their board, or other constituents.

1. What does the company look like in the next five or 10 years?
2. What kind of products will it sell and how will they be sold?
3. What will the customers look like?
4. What competencies will you need to put in place?
5. Who will the competition be?
6. What messages would you want to get across to the board of directors, to an investment group and to your customers?

Scenario planning and visioning is a tool that has less structure than some of the other tools in this compendium. Yet is a powerful tool to be used by executives, department heads, and teams to construct the vision of where that organization is heading and the outcomes to be achieved. I started using this tool in the 90s when I was heading marketing at a wireless company. Given the competition that was coming about due to changing regulations and changing technology and due to the increasing use of the Internet, it was time to think about where we needed to be heading.

Our visioning exercise was used to determine not only where we wanted to go, but also to ensure there was alignment among the executives in carrying out the strategic and business plans.

To do this correctly, each executive or team member has to address different questions including some of the following questions. They do this by visualizing a future state as if they walked in the shoes of their customers, their board, or other constituents.

The best parts of this exercise are listening to the answers, debating the vision, and then coming to a singular purpose and vision.

Product Innovation Charter

A product innovation charter is a format used by companies to determine the company’s (or team’s) product management or development strategy. What risks and returns do they want to take? What type of innovation will they consider- a new-to-the-world product will have substantially more risk than a line extension. It is used for products, not processes and sets the charter, i.e. the conditions under which the company or team will operate in making decisions.

The format of the charter is straightforward and simple, yet the end result is very powerful.

                                              Product Innovation Charter

Background: What the reason for this charter? What problems are you trying to address?

Goals: What are the specific goals that can be met? SMART Goals: specific, measurable, actionable, responsible party, and time frame should be defined.

Objectives: What is the overall objective of the charter? Is it to increase dominance in one area or to play catchup? Is the goal to develop breakthrough products or provide a specified risk/return ratio?

Guidelines: How does this charter fit into the corporate strategy? How much money is funded by this charter? What are the decision making capabilities of the leaders of this charter?

Boundaries: What are the rules of implementing the charter? For example, is this an entirely internal team approach or should partners be considered? Are there certain companies that are off limits to partnerships? Is this for consumption in the US or the entire world?

Balanced Scorecard

The Balanced Scorecard can be construed as a complete management system as originally conceived by Kaplan and Norton in the mid 1990’s.   The original structure of the balanced scorecard pointed to four elements as shown in the following diagram where each of the elements supported the vision and strategy of the company. 

Over time, the balanced scorecard has evolved and in our interpretation it provides a structure for companies to use and modify according to the priorities and needs of the company. In some companies, there is less “learning” and more growth oriented actions. In other companies, especially in the Internet world, the focus may be on replicable processes, or maintaining a specialized workforce, or even implementing strategic initiatives to maintain an edge in the market.

Such thinking doesn’t detract from the structure and use of the tool, yet the tool can to be modified to accommodate different companies.

Analytic Hierarchical Process

The analytic hierarchy process (AHP) was developed by Thomas Saaty, a professor at the University of Pittsburgh in the 1970s at which time, as a mathematician and engineer I fell in love with the methodology and have adapted it to fit my needs in corporate America and in our consulting practice.

It is a structured technique for organizing and analyzing complex decisions such as funding different product development efforts, selecting a leader of a cross-functional team, or determining which investment or partnership makes the most sense. The “most sense” is based on a combination of mathematics and beliefs – some supported by data – of different people and teams evaluating several options. What I like about it is the fact that by expressing answers in mathematical terms, you almost take out the emotion of decisions and can better evaluate disparate options. For example, you can use it for the classic guns v. butter decisions.

The strength of the process is that it helps decision makers find solutions that best suit their goal and their understanding of the problem. It provides a rational framework for structuring a decision problem, for representing and quantifying its elements, for relating those elements to overall goals, and for evaluating alternative solutions.

The users of the AHP first decide on the elements upon which decisions are based and the comparative weights of those elements. That would be a one-tier hierarchy. But the power of the system extends when each of the primary elements has a subordinate structure. Let’s say financials was one criteria and that weight was 25% as shown below. A second level hierarchy could be developed based on cash flow, capital and margin.

To us, the important part of the exercise is to give the different team members or decision makers the opportunity to debate and determine the correct elements, the hierarchy and the weights. Then, once complete, each case can be analyzed and an ordinal ranking can be determined based on a score. It still enables flexibility by the team to make final adjustments. What it prevents, though, is one dominant player swaying the votes of the others. Sometimes, in organizations, that is easier said than done.

Here’s what a two level system looks like for a company that was analyzing different product development opportunities. It can be applied in any business or industry or functional area.

With these tools, the executive can determine the direction of the company, ensure the executive team is in alignment, determine priorities and execute the plan. Of course, we at C-Level Partners are glad to help. Call me at 949 4394503 or write to me at dfriedman@clevelpartners.net to see if you qualify for a complementary one hour discussion of your business issues.

5 tools for the StreetSavvy Business Executive to Grow a Business.

I just read an article in CBInsights regarding a post mortem of more than 200 companies that failed.  It made me think if there is a way to prevent failure or provide insight into potential failures and errors that could be prevented and corrected a priori. 

To that end, we have developed a series of 20 tools that can be used by the StreetSavvy Business Executive that can help diagnose problems and provide data upon which better decisions can be made.   Over the next several weeks, I will share 5 tools per week for our readers’ use. 

Let me reiterate the definition of a StreetSavvy Business Executive.  It is a person in charge, normally in the executive suite, that has responsibility for a program or function or department, and who doesn’t follow the crowd.  Their goal is to find opportunities- call them blue ocean or impulse events- which prevent their business entity from regressing to the mean of mediocrity.  Following the crowd is not in their DNA.  They want to create their own path to success and by so doing, distance themselves from the crowd.

There are many tools, constructs, and paradigms we, at C-Level Partners, use to find solutions to complex problems.  We are glad to share those with our readers in our blogs, seminars and other media.  To that end, we put together this collection of tools and a brief description that we use to help companies.  Here are the first five tools. Feel free to provide comments and “like” them and share with whomever you believe can use them.  And feel free to contact me at dfriedman@clevelpartners.net or call at 949 439-4503.

PRASE℠     

This is C-Level Partners basic way we analyze problems. It is like a super gap and it is a very disciplined approach to solving complex problems. This methodology is applicable in any situation where value creation is inhibited.

Problem definition (description of) the current state and why it is insufficient

Root cause identification (what is causing the problem or constraint to achieving the goal)

Analysis of the desired future state (what it will look like when a problem is fixed or constraint lifted)

Steps needed to develop specific prescriptions and priorities to get from “here” to “there” (people, process, technology and governance)

Engage in an action plan based on priorities, organization, delegation, and follow up to achieve your goal state)  

Side-by-Side Matrix. 

Market research comes in many forms, shapes and sizes.  There is one tool that can be utilized more in market research and that is the side by side matrix.  This enables the business executive to collect data on two or more dimensions to get a broader view of attributes important to a constituent.  Not all survey vehicles offer this type of system yet Survey Monkey to a degree and QuestionPro offer very good templates and tools for use in conducting this research.   When coupled with the Quad Maps (because they visually depict answers in two dimensions, the results can be very powerful.  From Question Pro (www.questionpro.com ) here’s the construct of the side-by-side matrix.

While these questions may be easy to frame, think about categorizing questions.  For example, we categorized questions as customer service and support, retail experience, web experience, product breadth, sales reps, and other categories.  Within each category we subdivided the questions to get some more granularity.  

Using this tool and plotting it on a “quad map” is ideal to visual what you can leverage and what strategic initiatives need to be put into place.

For one wireless company using this research, the company was able to realign its strategy and marketing budget.  The results showed the company what was important and for those activities that they performed well, the marketing plan was able to leverage those positive attributes.  For other activities that the customer deemed not important, the company reduced expenditures.  And for those activities that the customers said were important but where the company fell short, initiatives and corrective actions were put in place.   The system worked well and the implementation of the results helped put the company on a new path to growth and propel the company to market leader position. 

Quad Mapping

A quad map is a simple tool to determine what to leverage, where to focus, what to watch and what to ignore or spend fewer dollars on.  We normally couple the Quad Maps with information attained through the side-by-side market research.

Business executives can break down questions into functional areas such as customer service, product breadth, store design, pricing and other categories.  Customers, suppliers and even company employees can answer the questions of importance and performance using the side-by-side matrix mentioned above.  

Those areas that are important and for which performance is poor can be thought of as potential strategic imperatives that the company or entity needs to undertake to correct.  Those attributes that are important and for which the entity performs well should be leveraged and emphasized.  Those items that are not important for which companies perform well.

Spider Diagram

Another simple yet powerful tool for use in positioning and competitive analysis is called the Spider diagram, because when you look at the graphical plot it looks like a spider web.

Attributes are indicated on the spokes and the length of the spoke reflects the scale e.g. from 0-10 (highest)  

A critical assessment of your brand, in this case, vs. the competitive brands can provide information on where to focus because your brand is better and where you might need improvement.

It was interesting to see this system used in the 2016 NFL draft as positional players were compared by using spider diagrams.   

SWOT Analysis

SWOT stands for Strengths, Weaknesses, Opportunities and Threats. A SWOT analysis is a tool that can be used to help the business person make better strategic decisions and develop plans that will be effective against the competition.  It can be used as a complement to Spider Diagrams.

Normally Strengths and Weaknesses focus on internal attributes of the company e.g. competencies, resources, reputation, brand, customer service and similar items.  Opportunities and Threats normally focus on the external world although many companies can conceivably find both threats and opportunities internally.  Threats include competition, regulation, and social changes, changing workforces, governmental policies and similar items.  Opportunities are noted where the company can make inroads e.g. a new market, or where new competencies, alliances and technologies can be obtained to provide an advantage in the current markets, expand product lines or increase sales. 

Most SWOT analyses are broken down into a two-by-two matrix, with one box for each of the four components but can be extended to include a SWOT comparison for multiple competitors. 

Here are two templates that can be used.  This first one is for the company itself and the second one is for a company relative to its competition. 

Note that competition should be considered as existing competition i.e. direct competitors as well as indirect competitors and potential competitors.  

We hope these five tools are good additions to your toolkit and will help you get data upon which to make decisions and to make the complex problems a little easier to dissect and address.

6 Steps to Beat the Competition: Analysis and Discipline Pay Off

It is said that if you know your enemies and know yourself, you will not be imperiled in a hundred battles; if you do not know your enemies but do know yourself, you will win one and lose one; if you do not know your enemies nor yourself, you will be imperiled in every single battle.
                                    Sun Tzu- The Art of War

I am a believer in the Art of War, especially applied to business and marketing. When I talk to groups on business and marketing subjects I use this quote and it has guided me in the way I approach building businesses and helping companies grow. I have listened to numerous investment pitches at TechCoastAngels screenings (a real Shark Tank) and have heard too many times that the entrepreneur believes there is NO competition. There is always competition, i.e. another way to solve a problem or provide a service. Even when a company realizes that there is some semblance of competition, many executives believe they have more attributes, a better business model, and a stronger brand than reality leads them to accept.

Sadly, this problem extends way beyond the start up world. In 2008, Jim Keyes, CEO of Blockbuster said: “Neither Redbox nor Netflix are even on the radar screen in terms of competition.” While Redbox had its glory days and has now faded, Netflix continues to soar as they are able to take advantage of streaming media and they have evolved their business model. Blockbuster and its ubiquitous blue and yellow stores have faded into oblivion after ceasing operations in 2013. When I was at RCA (when it existed as a standalone company) one of the execs in the tube division beat his plan but unfortunately failed to recognize competition from semiconductors. He was fired. And let’s not forget other companies such as Digital Equipment Corporation, Wang, Motorola and Nokia in the tech field. Not only did they fail to understand the competition, their business strategies did not evolve. We are now seeing consumer companies such as Macy’s and Kohl’s which failed to recognize the competitive environment fast enough (can you say Amazon and online shopping) and are now closing many of their stores.

There is hope though, for most companies as they consider their competition, the environment and the competencies they need to put in place to execute a new business strategy. To that end, here are the six steps companies must take to gain and/or retain a competitive edge.

1. The first step to beat the competition is to recognize that there is competition! Competition comes from direct competitors, i.e. those offering the same type of product or service; indirect competitors; and even the do-it-yourselfers. Even if a competitor is small today, should technology or macroeconomic trends change, a small new company can become dominant. That is what happened to Blockbuster. Competition doesn’t have to come from the same players in the industry. Who would have thought Google and Apple, both, would be developing an autonomous car or at one time a smart phone. As we celebrate the 10^th anniversary of the iPhone, there was a time when dominant companies in the market such as Nokia and Motorola did not consider Apple a threat and frankly, they did not believe companies like LG and Samsung were threats either. Both Nokia and Motorola have lost their luster.

Keep alert and be paranoid. Use user panels talk to “lead users” who are early innovators of new products, set up Google Alerts on companies that are current competitors as well as those which have the right competencies to become competitors. Your product might be better and that message needs to be conveyed to your target audience. You can recognize the competition through the use of user panels, discussions with “lead users’ and even setting up Google Alerts.

2. The second step is to know the competition. A couple of months ago, I was watching a classic war movie called Patton. Patton was reading the works and biography of Rommel, his nemesis, competition and enemy. Rommel in turn was trying to learn through books and other sources, how Patton thinks and how he would fight. It’s classic Sun Tzu! Even without teams of analysts and staff there are a few tips in understanding and knowing your competition.

Executives can become the equivalent of Undercover Boss. When I was the top marketing executive for US Cellular, I personally visited both my stores and those of my competitors. It’s easy to do even in a business to business environment. Other tools that can be used include Customer Advisory Boards, user panels, cross-functional teams that meet regularly to discuss competition and the environment. At ATX Group (now Sirius Connected Car), every other Friday morning I hosted a cross functional group of executives to discuss new technology and competition. Certain execs were tasked with following specific competitors and sharing that information in Microsoft Exchange folders for our sales, marketing and technologists to use. Other tools include Spider diagrams, focus groups and market research including subscribing to the industry analysts that cover your industry. In the tech field those industry analysts include Gartner, Forrester, IDC and Ovum among others. If a public company is a competitor, read their 10-Ks; it’s amazing how much information is available in that document.

3. The third step is to know yourself. Some of the same tools used to understand the competition can be used to understand your own company. Spider diagrams, side by side market research matrices that can highlight those attributes that are important to your customers and for which you perform well or poorly can help set your company’s strategic imperatives. I am a huge fan of developing a SWOT analysis which covers strengths, weaknesses, opportunities and threats. To do SWOT well companies should seek out key thought leaders in their company, regardless of level and even use newly recruited employees who have a different perspective because of their recent outside experience. Doing mystery shopping even in a business to business company is also relatively easy. At a telecom company in New Jersey, one of my marketing managers set up a false company called The Fred Racciopi Cement Shoe Company of Central New Jersey (obviously we set this up tongue and cheek) and became a customer of each competitor and well as our own company. It’s amazing what we learned and through those learnings we adjusted our training program, branding, positioning and marketing material.

4. The fourth step is to develop and explain the factors that make you different. Customers buy from companies that provide a unique value for their needs. If the value is significant, relevant to the customer, sustainable and credible, the company will have a differentiable advantage. This enables executives to create a “moat” around their company and its products, protecting the company from competitive incursions. The strength of your differentiation is akin to the size of the moat. Even commodities have moats. Think about salt or rice, two very basic commodities. Do you believe that Morton’s salt is better than other salt and worth a 15% price premium? Or how about Mahatma rice vs Kroger-branded rice? What about chicken? What company said: It takes a tough man to make a tender chicken?” (The answer is Purdue Chicken.)

If you can differentiate these commodities, you can differentiate any company and its products. There are several ways upon which to differentiate. Intellectual property (IP) or Patents is an obvious one. Even IP may not be sustainable or even relevant to your target market. Other ways to differentiate are based on what Adrian Slywotsky, author of Profit Zone, calls strategic control points which are defined as some type of unique advantage for a company based on competency or partner relationship. All companies can find at least one. These could include their brand, their business partners, distribution partners, unique processes, innovation, low cost of manufacture, unique customer knowledge, access to certain resources be they commodities or people and similar items. A company has to find those strategic control points that are relevant to their markets and be consistent and credible in delivering on those elements.

5. The fifth step is to develop plans: Developing and executing a plan is critical to success. A written plan should include specific elements. By target market, a goal needs to be defined, a strategy clearly enunciated, and tactics developed with specific milestones, costs, and a person responsible for delivering the tactics. Our opinion is that a plan should have one specific leader who is accountable for the entire result. Individuals who report to this leader need to be designated for each tactic and milestone. C-Level Partners also believes that these plans need not be long winded and in fact the best plans have focus and clarity and might even be codified on one or two pages at maximum. I personally am in favor of one page plans with specific deliverables. I like using a method called RACI (responsible, accountable, consultative and informed) to ensure that the right people in a company are involved in the development and execution of the plan.

6. The sixth and final step is to monitor, measure, modify.  Each plan developed in step 6 should have a complementary set of metrics to track the success of the plan. Metrics vary depending on the plan and some of the metrics can include: average revenue per sale, total sales, return on investment, market share, win/loss ratio of business, aided and unaided awareness, average order quantity, SEO, the timeliness of performing the tactic, and other operational, business or product criteria. Each month these metrics should be added to a scorecard – preferably balanced – and reviewed with the operational or executive team. If a metric is not on target, then the executive responsible for the metric has to provide a corrective action plan. If the metric is very critical to the business strategy or to the overall goals of the plan, then a separate deep dive should be performed where the elements of the plan can be discussed in detail.

As an executive it is sometimes hard to see the competitor when you are mired in the day to day operations. You can always look to outsource part of these six steps or recruit internally some of the best and brightest less tenured people in the company. Successful companies couple strategy with competitive analysis to create and maintain an advantage. When I first converted from an engineer to a marketer, I cut my teeth on competitive analysis. It was the perfect start to figure out how to gain an advantage for the new products I was developing for my customers. I was fortunate to have the opportunity to help drive the strategic vision of my company at the same time. That integration is, in my opinion, critical to a company’s success.

Once you gain a competitive advantage, you have to stay ahead of the competition. That is a subject for a future blog, yet we at C-Level Partners believe that maintaining a competitive edge means companies have to continue to innovate, with technology, with their people, and through their processes. They must maintain contact with customers and open their ears and even seek out criticism. And they must strive for not only incremental improvements but also stretch for what we call the “art of the possible.”

As a technologist and business executive, I always keep in mind the title from Andy Grove’s book, “Only the Paranoid Survive.” Yet with discipline and a plan as outlined in these six steps we believe that companies will be able to develop a competitive edge and flourish in this hyper competitive environment.  

If you have comments or would like to see if you qualify for a complementary appraisal contact me at dfriedman@clevelpartners.net or call me on 949 4394503.

The 5 C's of Clairvoyant Companies

No one is a psychic at TechCoastAngels.  Yet, we believe there are keys to success for start-ups.  For the past f weeks, myself and 6 other angel investors from TechCoastAngels of Orange County have screened more than 120 entrepreneurs in preparation for the “finals” of our fast pitch competition at TCA’s recent Celebration of Entrepreneurship event held on March 10.  We listened to these entrepreneurs’ 60 second pitches which would be provoking enough to take a meeting with them and listen to their pitch decks.    

In the past, I have looked at pitches of Unicorns and through my work and consulting practice reviewed or developed business plans, marketing plans, competitive analyses, positioning statements, branding architectures, and product road maps.  So, in this blog, I want to put it all together and share what I see are the common themes that came out of the pitches, pitch decks, business, and marketing plans- at least from my perspective.   

The following principles, which I call the 5 C's of Clairvoyant Companies are equally applicable to start-ups and on-going companies, large and small.

1.  Conveying the story.   The first “C” relates to conveying a story of what problem(s) the company is solving and telling a succinct story to entice the listener to ask for more information.   If it is a start-up, the entrepreneur has to put the listener in the shoes of the person having the problem and convey the solutions.  In the pitch deck, or the business plan, the CEO provides the details on how he or she will execute on the plan and drive financial results.  Conveying the story clearly applies to all companies, particularly if the company wants to attract new customers and brand itself in the market as something special.  Just think about the stories being conveyed by Nike and Under Armour or your favorite consumer or business product.

2.  Customer Clarity.   The second “C” relates to the target customers.  Who is the ideal customer?  Can you describe them and how do you find them?   If you think about Airbnb, the customers are both the person wanting to rent his property for a short period of time, to the other customer, a person wanting to rent a room or house.   The marketing and business plan should clearly indicate the problem the customer is facing and the solution offered.  Additionally, the company needs to present a cogent case for their marketing tactics to drive awareness, adoption and use.  Without clarity on the customer and how to find them and motivate them to action, financial success will not be achieved.

3. Competencies of the Company.   This third “C” relates to the existing or needed competencies within the organization that can drive the financial results.  It also relates to the intellectual property (IP), the culture of the company, and the way the employees think and execute the plans that are required to support the business or product.    How do you acquire and sustain the competencies that are needed for success?  Do you hire software developers on your team to build the product or can you outsource that skill?   What is critical based on your strategy and your competition?  

A competitive analysis and environmental scan may lead to the conclusion that skill sets that were once required are no longer required and new skills must be added.  That may lead the company to a training program, a partnership, or replacement of existing resources with new ones.  Some competencies such as Intel focus on technology as the prime competency and they develop the next generation of product even as they roll out the current generation.  Others, such as Zappos, focus on the uniqueness of the customer experience and the culture of the company, both of which are hard to duplicate.  Competencies help provide a “competitive moat” which brings up the next “C.”

4. Competition.   This fourth “C” is pretty evident.  No company operates in a vacuum.  Both start-ups and on-going companies need to be aware of the existing and potential competition that exists.   A competitor in the future may not be apparent today but may have the competencies, technology, leadership and resources to compete in a new and growing market.   Five years ago would GM or Lexus have considered that Tesla would be a competitor or that Google would enter the realm of cars with their automated car program?  A few short years ago, who would have thought that Red would be the camera of choice and used in three of the 2016 Academy Award nominees for best film? 

With technology and apps changing so quickly, competition can change just as fast.  Technology is the new enabler helping young entrepreneurs compete with established companies and with each other.  Recall what Andy Grove, former Chairman of Intel said:  Only the Paranoid Survive.  Whether you are a start-up or an established company, be paranoid and keep your eyes open.

5. CEO vision and passion.    We at TechCoastAngels say that we have to like the horse (the business concept) but must LOVE the CEO (the jockey and her team.)  As we screened the candidates for our upcoming event, we looked for a CEO with passion and vision and who can relate to us, the investor.  We wanted to find someone who had a history of success, was decisive, yet approachable and coachable.      

Think back to the great leaders of businesses or coaches and CEOs of sports teams.   Who is your model for a CEO with vision and passion?  I personally thought Lee Iaccoca was great when he resurrected Chrysler.  Jack Welch turned GE into a world class company with his vision to be #1 or #2 in his markets.   Steve Jobs showed the world a new vision for technology. And Alan Mullaly took Ford after the great recession to a new level of respect and performance.   

I trust that our C-Level Partner blogs and the ideas will help executives of start-ups and on-going companies be successful and also be used by executives to help them guide their companies to business success.   C-Level Partners has been established to be a beacon for value creation.  My partners and I would be glad to continue the dialog on what makes a successful company and help you optimize your business value and achieve your business goals.  Feel free to reach me at dfriedman@prodigy.net or call me on 949 439-4503.  And if you enjoyed this blog please like it, repost, and retweet it.