Strategy Central

Why Do You Buy What We Sell (or make)?

Peter Drucker's classic question, "What business are you in?" is a classic because it's at the core of a fundamental understanding we all need to have about the "business" we are in.  Like the railroad industry of an earlier day not realizing that they're actually in the transportation business, sometimes we can miss the reality of the business we are in.

That ever happen to you?  I think it has to many of the organizations I've been part of...sometimes without anyone knowing it.  How can you figure out what business you're really in?  Asking "why customers buy your products or service can provide a more accurate and more expansive answer to the question, 'What business are we in? (p. 32, The Innovator's Guide to Growth).'"

Here's the thing.  Whether that happens formally or informally, we're kidding ourselves if we're not really drilling down to figure out if people are buying what we sell for the reasons we think they are.

Putting Your Money Where Your Mouth Is

What comes first?  Strategy or resource allocation?  For most of us, the question is a little bit moot...because we're in organizations that are already in business.  Whether the organization is 10 years old or 100, most of us come into the picture after the budgeting process is well established and defined.  What is more common is that after a while there is at least an attempt at a strategy change.  Maybe a big one, maybe a small tweak...but a strategy change designed to kick start organizational effectiveness is very common.  After all, if you realize that you're not heading in the right direction, the only thing that makes sense is a new strategy.  And that's where there can be a significant problem.

Problems often arise when a new strategy is laid on top of a preexisting budgeting process.  Legacy programs that expect to be funded can be tough to eliminate (or even decrease).  The temptation is to simply fund the new strategy and continue to fund the old.  Truth?  It rarely works cleanly.  Much more common in this compromise is that by sustaining the old the new strategy isn't quite funded sufficiently.

Sound familiar?  Here's a line from The Innovator's Guide to Growth: Putting Disruptive Innovation to Work  that grabbed my attention:

"Remember, it is not your strategy that determines how you allocate resources; rather it is how you allocate resources that determines your strategy.  In other words, the way in which you spend your time and money reflects your priorities.  Claiming that innovation is important is meaningless if you and your organization don't allocate appropriate resources to that end (p. 33)."

Moral of the story?  Don't kid yourself.  Budgets and resource allocation are the truest reflections of priorities.

News from Poolside in the Exile

After being roasted in Monopoly...I fired up the grill for burgers with the really good roasted poblano pepper. The pool makes it very So Cal even here in Rocklin.  Good times...

Day's End in Laguna

Rocklin?  In my heart I'm in So Cal...just north of Las Brisas in Laguna.

Quotebook: Conventional Wisdom

Conventional wisdom works in conventional circumstances, but it misleads when circumstances change.  Clayton Christensen

The Innovator's Guide to Growth

I don't know about you but I love discovering new work on the topic of innovation.  I recently picked up a copy of The Innovator's Guide to Growth: Putting Disruptive Innovation to Work and can see that this has great potential.  A followup to Clayton Christensen's  The Innovator's Dilemma, this volume was written by several of Christensen's colleagues with "deep experience helping dozens of companies move create innovation-driven growth." 

Ever been part of an organization that has had success in the past but seems incapable of moving on to a productive future?  I've written in the past about systematic abandonment or what Joseph Schumpeter called creative destruction.  Disruptive innovation is related in that organizations that have successful operations are often prevented from anticipating or recognizing the need to adapt because they're already succeeding.  An outsider can see that they're passing up some huge opportunities...but from within the organization, everything looks rosy.

I like where The Innovator's Guide to Growth is going.  Four sections:

• Identifying Opportunities
• Formulate and Shape (Disruptive) Ideas
• Build the Business
• Build Capabilities

Want to come along?  You can pick up your copy RIGHT HERE.  Also, you can take a look at Scott Anthony's blog right here.

Learning Doesn't End with Graduation

Are you a learner?  Early in my experience I heard someone say that you could tell when a person stopped learning by looking at the copyright dates in their library.  There's truth to that.  Once you stop learning you're toast.  On that note, I tripped across this great quote from Jeff Rosenberg, Senior VP, Product Management at Google:

Keep on challenging yourself, because learning doesn't end with graduation. In fact, in the real world, while the answers to the odd-numbered problems are not in the back of the textbook, the tests are all open book, and your success is inexorably determined by the lessons you glean from the free market. Learning, it turns out, is a lifelong major.

Want to read the whole post that this quote came from?  You can see it right here. Thanks to Polly LaBarre for the tip that led to the post.

Reaching Your Destination

What gets us to our destination?  Vision?  Mission?  Good intentions?  Actually...none of the above.  What gets us where we'd like to go is moving forward on a path that leads to there.  It's really two-fold.  Being on the right path...and moving forward.  I like what Andy Stanley says about the first part: "Path, not intent, determines destination."

I like what my friend Eric Swanson says about the second part: "You need to have a system that operationalizes your values.  Otherwise, they're really only sentiments."

Want to get to there?  It will take more than intention. 

Thanks to Steve Bradley for the link to the quote!

Winning by Changing the Game

Ever found yourself in an un-winnable situation?  Maybe you've tried to succeed at something only to realize that the game was basically rigged and only the house could win...unless you changed the rules?

Without a doubt one of the most helpful and provocative books I've read in a very long time was Mavericks at Work: Why the Most Original Minds in Business Win.  For me you can always tell how interesting it was based on the number of marked up pages.  Simply an amazing book.  If you haven't read it, you have totally missed out on a great read.

The authors, Bill Taylor and Polly LaBarre have a blog that is the source of some great stuff as well. In an article earlier this week Taylor wrote about how Pixar had succeeded by "changing the game in their field."  While virtually everyone else in their industry works on a contract basis and changes fluidly changes projects and teams, the Pixar version: "a tightknit company of long-term collaborators who stick together, learn from one another, and strive to improve with every production."

Now, that in itself is an important insight into our work...but that's not really the point today.  The point here is that Pixar is winning by changing the game.

Got some areas where you're just not able to win under the current rules?  You may need to change the game.  Want more?  You can order your copy of Mavericks at Work RIGHT HERE

News from the Exile

For a so cal boy this has been a good first week here in Rocklin. When we arrived on Wednesday the smoke from the fires was pretty heavy. I told everyone it smelled like the OC.
Tonight it's spaghetti, prepared by that famous chef, Eric. Got to keep him honest though. Sometimes he cuts corners on the seasoning (read, "forgets to add salt").
PS...Playing with news from the exile. Not sure about it, but it kind of works.