Is Strategy Purely An Exercising In Thinking?
Is strategy an analytical exercise where one collects useful data, crunches this data, finds where the opportunities lie, and then selects the most promising opportunity? Is it merely a matter of ‘scanning the landscape of opportunity’ and selecting the most suitable opportunity? Put differently, is the job of the strategist to select which table to play at?
It occurs to me that this is pretty much the view articulated by Michael Porter – the person who really put strategy on the corporate landscape. Arguably, it is also what Tony Hsieh is getting at when he writes the following in his book Delivering Happiness (bolding mine):
I noticed so many similarities between poker and business that I started making a list of the lessons I learned from playing poker that could also be applied to business:
Evaluating Market Opportunities
- Table selection is the most important decision you can make.
- It’s okay to switch tables if you discover it’s too hard to win at your table.
- If there are too many competitors (some irrational or inexperienced), even if you’re the best it’s a lot harder to win.
Is There More To Strategy Than Table Selection?
There might be. It may not be as simple at selecting the right table. Let’s get back to Tony Hsieh, he writes (bolding mine):
- Don’t play games that you don’t understand, even if you see lots of other people making money from them.
- Figure out the game when the stakes aren’t high.
This is great as far as it goes. As a strategist you can sit in your ‘war-room’ crunch the ‘big data’, create a map of the opportunity landscape. And then select the right table to play at based on the consideration of two factors: the opportunity potential at a specific table, and your competence in playing the game that is played at that table.
Is this all there is to the game of strategy making? Put differently, now that the table has been selected, can the strategist/s hand over the baton to those who excel at execution-implementation: playing the game that is played at the chosen table? For me the answer is “No”. Why?
I invite you to consider that what is so is always in flux: change/flow/becoming/birth-death-birth characterise the world in which we find ourselves. One of the central assertions of complexity science is that a small intervention at the right place at the right time can move a stable system over the change and into a radically different state. If you grasp this then you get that there is space to act, to shape the game so as to increase your likelihood of winning.
The Work of Strategy Includes The Work Involved in ‘Tilting The Table’
If the first part of strategy can be likened to ‘selecting the right table’, then I say the second and vital part of strategy involves the work that is involved in ’tilting the table’. What do I mean by ’tilting the table’? I mean acting on the world – orchestrating the elements of a situation – so as to generate the desired outcome. Notice, here we are in the realms of implementation (execution).
So what levers are available to the strategist who seeks to ’tilt the table’? Let’s answer that question by imagining a scenario. Let’s assume that as the strategist you have selected the digital table to play at. How might you go about ’tilting the table’ so as to increase the odds of success? I can think of the following levers:
- Actions that destabilise the existing power structure in your organisation e.g. making people changes and shifting the balance of power between business units, functions, products etc;
- Actions you take to ‘de-stabilise’ your key competitor/s e.g. luring away their key people;
- Who you choose to lead the digital transformation programme;
- Governance structure and rules of engagement;
- Resources (money, people, information, tools) that you make available to the digital transformation programme;
- The timescale you set for the shift to digital to occur and the associated metrics for gauging movement along the digital path; and
- Actions you take to make the shift toward digital necessary and attractive e.g. making promotion dependent on digital skills-expertise-projects, and funding digital education-training.
You get the idea. The levers that you can identify are limited only by your imagination, your creativity. And some will have more leverage than others.
As a strategist, is your work finished once you have done that which you can to ’tilt the table’ in favour of your team, your organisation? It occurs to me that the answer, again, is no.
Strategy Involves An Ongoing Attunement-Adjustment to The Facts On The Ground
Given the dynamic nature of the world in which we live and in which the game of business is played out, it occurs to me that strategy making cannot be a one-off exercise. It occurs to me that effective strategy, in a dynamic context, is alive. What do I mean by that? What is the core characteristic of living organisms? They are attuned to their environment. Why? Because attainment is essential for timely adjustment to occur; adjustment promotes survival.
What does this mean for the strategist? Here are the words of Tony Hsieh in Delivering Happiness (bolding is mine):
- You need to adjust your style of play throughout the night as the dynamics of the game change. Be flexible.
I leave you with the following thought: the effective strategist is one who not only has experience of the arena but is in the arena where the game is being played. And it is this involvement and mastery of the game, along with reflection and creativity, that allows him/her to be effective in strategising. I get that this is unconventional.
Thanks for listening, I invite you to share your thoughts-experience on the matter.
What Is Transformation?
For the purposes of this conversation, when I speak ‘transformation’ I am pointing at a radical shift in one’s way of being – as in one’s way of showing up and travelling in this world. If you are Christian, and know your Bible then think of the transformation (often called conversion) of Saul to Paul. What was intrinsic to this transformation? Was it not a letting go, a complete letting go, and embracing the unknown?
What Has Transformation To Do With Customer-Centric Business?
What has this conversation to do with all things Customer and especially customer-centric business? Everything. As I have said many times before a shift to showing up and doing business in an authentically customer-centric way requires a transformation: personal (Tops, Middles, Bottoms) and business (policies, practices, processes, tools).
a. What is the access to transformation?
What is the access to transformation at the individual (personal), and business (organisational) level? Allow me to share the following with you:
In some Asian countries there is a very effective trap for catching monkeys. A slot is made in the bottom of a coconut, just big enough for the monkey to slide its hand in., but not big enough for the hand to be withdrawn when it is clenched. Then you put something sweet in the coconut, attach it to a tree, and wait for the monkey to come along. When the monkey slides its hand in and grabs the food, it gets caught. What keeps the monkey trapped? It is only the force of desire and attachment. All the monkey has to do is to let go of the sweet, open its hand, slip out, and go free - but only a rare monkey will do that.
- Joseph Goldstein, A Heart Full Of Peace, Best Buddhist Writing 2008
OK, this Buddhism stuff shows up for you as ‘other worldly’ – unrealistic. So allow me to make it real for you.
b. The Transformation of Zappos Occurred in March 2003
Listen to Tony Hsieh talk about the early days of Zappos when the leadership team was struggling to find funding to keep Zappos going – the cash had run out (bolding is my work):
A month later, we still weren’t profitable. We still couldn’t raise funding.
But we had a decision to make.
How serious were we about this idea of making the Zappos brand be about the very best customer service? We had discussed the idea internally with our employees, and everyone was excited about the potential new direction.
But was it all talk? Or were we committed?
We hadn’t actually changed the way we did anything at Zappos yet. We did a lot of talking, but we weren’t putting our money where our mouths were And our employees knew it…..
For 2003, we were projecting sales to double, with about 25 percent of our overall sales coming from our drop ship business. The drop ship business was easy money. We didn’t have to carry inventory so we didn’t have any inventory risk or cash-flow problems with that part of the business. But we had plenty of customer service challenges.
The inventory feeds ….. from our vendors for our drop ship business were 95 percent accurate at best …. On top of that, the brands did not ship as quickly or accurately as our own WHISKY warehouse, which meant we had plenty of unhappy and disappointed customers. But it was easy money.
We all knew deep down inside that we would have to give up the drop ship business sooner or later if we were serious about building the Zappos brand to be about the very best customer service. We also knew that the bigger we grew, the more reliant we would be on the cash from drop shipping. There would never be a good time to walk away……
So we made what was both the easiest and hardest decision we ever had to make up until that point. In March 2003, with the flip of a switch, we turned off that part of the business and removed all of the drop ship products from our web site.
We took a deep breath and hoped for the best…..
We had to deal with our first test of our new direction right away. With a drop in revenue, cash was even tighter than before.
Now we had to figure out how to make next week’s payroll.
- Tony Hsieh, Delivering Happiness
Not easy is it? Which kind of explains why many organisations which talk about customer focus, customer obsession, customer-centricity are playing at the periphery: making process changes, buying-implementing technology etc. Which CEO or leadership team looks forward to taking a deep breath and hoping for the best?
If you are serious about cultivating genuine-meaningful loyalty between yourself and your customers then you have to open up your clenched fist. And let go of all the policies-practices-products-people that generate bad profits – profits made at the expense of your customers.
As Tony Hsieh says there is NEVER a good time to do this. So the best time to do that which goes with showing up and travelling the authentic customer-centric path is NOW! Why now? Get this, everything that ever happens, happens NOW. I know that this is not how it shows up for you, or me. And look into this, deeply, and you will see the truth of it. All action occurs in the present, NOW.
Here is where it gets interesting. There cannot be an organisational transformation unless it is preceded by individual/personal transformation; this individual/personal transformation has to start with the Tops – it is called leadership.
What is the subtitle of Tony Hsieh’s Delivering Happiness book? “A path to profits, passion, and purpose”. It occurs to me that the many with whom I speak show an avid interest in profits – increasing profits. Few show any interest in any purpose other than ego: self enrichment in its many disguised. Passion? Passion for great customer service, passion for great Customer Experience, passion for the genuine well-being of customers as fellow human beings? If you come across it then please share it with me.
giffgaff: Wow! What A Delightful Experience.
Youngest, daughter, has ‘lost’ her mobile phone. So she logged me into her giffgaff account on the website. I clicked the “Help” tab. Then I clicked “Lost & Stolen”. Then I chose “Lost Both My Phone and SIM”. At this point I was expecting to be told that the phone and SIM had been blocked. And a new SIM would be with me in a couple of days. That would have been a good enough experience: got the job done in a couple of minutes.
That is not what happened. Once I selected the “Lost Both My Phone and SIM” option I was informed that the phone and sim were now blocked. AND I was informed that I could get a replacement SIM activated immediately instead of waiting for one to arrive in a couple of days. How so? By getting hold of and activating an existing giffgaff SIM – one that had not been activated to date. How is that possible? giffgaff, as a matter of course, sends extra SIMs to members. Why? So that they can give them to those who they think would benefit from being members of giffgaff.
As a result of this capability, I was able to hand over a fully working mobile phone on the giffgaff network to my daughter in less than five minutes – start to finish! That was my desired, real, outcome. And arriving at this desired outcome in five minutes as opposed to several days left me delighted; I am a protective parent!
What is unconcealed here? The starting point for customer-centricity is authentic care for one’s customers. When this is in place then the folks in the organisation will exercise thoughtfulness. In so doing, these folks will make it easy and enriching for customers to do business with that organisation. And in the process the organisation will both generate customer loyalty and reduce waste – doing stuff that costs money but does not create value for customers from the customer point of view.
What can I say? I love the folks at giffgaff. I love how thoughtful and smart they are. I love how easy they make life for me. I’d happily recommend giffgaff and have done so many times!
RAC: Regulation of Call-Centre Agent Behaviour Is What Matters, Not The Customer Experience
Youngest son bought a car and in the process he was about to buy breakdown insurance. I told him that he didn’t need to do that as I’d put him on my existing breakdown policy with the RAC. I rang the RAC expecting a brief conversation of the following kind:
Me: I’d like to put my son Marco on my existing breakdown policy. Here is the policy number. What is the cost?
Call-centre agent: The cost is £x. Does that work for you?
Me: Yes, here is my credit card number.
Call-centre agent: That’s done for you. We’ll send out a membership card to your son in the next couple of days.
Me: Thank you.
How did the conversation actually go? It took some time. I found myself frustrated. I found myself raising my voice. I found myself angry. Why? Once the helpful young man had verified who I was he proceeded to ask me stupid questions. What made these questions stupid? He already had the answers to these questions. He was asking about the services that my son would need. And I told him those on the existing policy: roadside recovery, home recovery, onward travel, and European travel.
So why did this friendly professional (sounding) call-centre agent ask me questions to which he already had the answers? Because he had to: the ‘designers’ of the call-centre operation had come up with a script and he had to follow it to the letter so that he would be in compliance with the script. After all the phone call was being recorded and the quality folks would be listening in to ensure compliance with the script.
What a waste! What a waste of my, the customer’s, time. What a waste of the intelligence of the call-centre agent. What a waste of valuable call-centre resource: the time of the call-centre agent. What a waste of an opportunity to deliver a great customer experience and generate goodwill. What a waste!
What is unconcealed here? There is a conflict between the way organisations are designed to operate (regulate the behaviour of the folks in the organisation so as to facilitate command and control) and the flexibility (of response) that has to be in place in order for the customer facing folks to respond intelligently to this particular customer, at this particular time, as regards this particular context.
Sainsburys Bank: A Good Experience Turns Ugly
Eldest, son, asked for help in signing up for a suitable credit cards. I did the research and identified several providers. In the process I found three providers which appealed to me. I signed up for each of these providers – one of these being Sainsburys Bank. All three providers made it easy to sign-up. All three did the background checks on me, verified me as sound credit risk, approved me as customers and gave me a credit limit. Two of them, at the end of the process, invited-encouraged me to setup an online account with them so that I could manage my account online.
Several days later I got the paperwork through from all three providers. Two providers sent me confirmation paperwork, terms and conditions, and the passwords/codes I’d need to use the credit cards. One provider – Sainsburys Bank – didn’t. What did Sainsburys Bank send me? It send me a bunch of unappealing (black and white) paperwork to read and sign! This struck me as such a disconnect! How antiquated in comparison to the other two providers! What a great way to foul up a great digital experience! The whole point of digital is that stuff can be done there and then, in real-time.
What is unconcealed here? Some folks just don’t get digital. Some folks just don’t get mobile. Some folks don’t get social. Some folks just don’t get how to use the various customer interaction channels intelligently. More importantly, some folks don’t get customers. A customer who chooses to interact with you through digital channels is looking for a digital experience. A customer who chooses to ring in to the call-centre is looking to talk with an intelligent-friendly human being – not navigate a frustrating-inhuman IVR. You get the idea.
It occurs to me that established organisations have a long and difficult path ahead of them if they are to compete on the quality of the Customer Experience. On the Customer Experience path the advantage lies with the younger, greenfield, organisations which do not have to deal with the legacy of relational and technical debt. And that is food for a future conversation. Thanks for listening.
What Customer Experience Paths Are Organisations Taking?
It occurs to me that under the Customer Experience umbrella one can pursue several distinctive paths. What might these paths be?
One there is the lets suck less path. This almost always involves looking at way of reducing customer effort at specific touchpoints e.g. call-centre, or specific customer interactions e.g. when buying something. Arguably some, perhaps even most, of the effort that the UK government has put into its digital services programme is about sucking less, reducing customer effort, and in the process decreasing costs.
Two, there is the data-technology path. Let’s make use of the latest technologies (internet, social, mobile, mobile apps, kiosks, marketing platforms..) to do interesting/sexy stuff. And in the process collect-harness data on the end consumers – who have to date been unidentifiable. Take a look at just about any high profile B2C brand. For me, several automotive brands come to mind immediately. This is the path pushed by the technology vendors and the more IT oriented consultancies.
Three, there is the customer journey / business integration path. By this I mean lets glue up the organisation – business units (online, offline), interaction channels and business processes – so as to provide a harmonious (as a result of the integration) customer experience. What is in it for us? Higher revenues (customer stick around more, attract new customers through word of mouth, and existing customers buy more) and reduced operating costs. A great example of this is the John Lewis Partnership in the UK.
Is this all there is? Making that which is, work better? And using the latest shiny technology to collect data on customers, potential customers, and push out marketing messages? Is this the extent of the possibility of Customer Experience?
What Is The Truest / Fullest Expression of Customer Experience?
Bring new light to what life might be.
- Hugh MacLeod
I say that the true-fullest possibility that is inherent in Customer Experience is that of bringing new light to what life might be. Think Amazon. Have the folks at Amazon not brought new light what the experience of searching for, finding, reviewing and purchasing products might be? Have they not set the benchmark for what constitutes an online store and the associated experience?
Think Apple. Some say Apple is phone company now given that this is where the bulk of revenues, profits and growth is at for Apple. How did it get that way? Did not the folks at Apple ‘bring new light to what life might be’ with a touchscreen intuitive (to use) phone? And is it not that possibility that has been pursued consistently such that few of us would now consider being apart from our smartphones?
Think First Direct. Did the folks there not bring new light to what telephone and online banking might be?
Think The John Lewis Partnership. Did the folks there not bring new light to what life might be for the folks that work in the business and those who are served by those who work in the business? The genuine partnership model were they are no employees. Only partners, who partner with one another to deliver great service to customers.
Think giffgaff. Have the folks at giffgaff not brought life to what life might be like for customers of mobile phone networks: life as a community? The experience of membership, of community, of being in it together, of participation, of loyalty, of honest dealing between network and its customers?
It occurs to me that the folks that were at the helm of these companies were pursuing a vision of what life might be. Not just in the pursuit of making the numbers. They chose to tread the bold path rather the safer one of incrementalism or following the latest fashion. They led in the truest sense of leading: the invented a possibility, they enrolled people into that possibility and got busy giving birth to the unborn: what life might be.
I am finding myself becoming more and more dissatisfied with Customer Experience as practiced. Why? Because what calls me is the possibility of ‘bringing new light to what life might be': honouring, enriching, elevating, the life of my fellow human beings. Perhaps my interest is in innovation rather than Customer Experience. Or perhaps my interest is in innovation in the form of the total customer experience : Customer Experience Innovation. What about you?