Strategy And Purpose: Is It Really What You Say It Is?

Let’s say that you want to grasp an organisation’s strategy – say customer strategy or customer experience strategy. By strategy I mean the organisation’s manner of ‘showing up and travelling’. How would you go about determining that?

Who would you go and ask? How many people would you ask? Would you seek out the Board? The CEO? The Marketing Director? The Sales Director? The Customer Services Director? The Operations Director? The Chief Customer Officer? The Chief Digital Officer?

What would you look at/for? Would you seek out and review the latest published accounts?  The strategic plan?  Mission and values statements? The brand values and guidelines? The marketing strategy? The statements that the CEO / Finance Director has made to the financial press?

You’d be wasting your time. Just like I did in my early days in consulting. Nowadays, I pay little attention to any of these aspects. What do I direct my attention towards?  That which really matters. That which truly speaks without speaking. That which does not lie. What am I pointing at?  I invite you to listen to a man that knows – really knows:

A strategy – whether in companies or in life – is created through hundreds of everyday decisions about how you spend your time, energy, and money. With every moment of your time, every decision about how you spend your time, and your money, you are making a statement about what really matters to you. You can talk all you want about having a clear strategy and purpose for your life, but ultimately this means nothing if you are not investing the resources you have in a way that is consistent with your strategy. In the end, a strategy is nothing but good intentions unless it’s effectively implemented.

How do you make sure that you are implementing the strategy you truly want to implement? Watch where your resources flow – the resource allocation process…… You might think you are a charitable person, but how often do you really give your time or money to a cause … that you care about?  If you family matters most to you, when you think about all the choices you have made with your time in a week, does your family seem to come out on top? Because if the decisions you make about where to invest your blood, sweat, and tears are not consistent with the person you aspire to be, you’ll never become that person.

– Clayton M. Christensen, How Will You Measure Your Life?

Bringing about this consistency is not easy. It is not easy at the individual level. It is not easy at the family level. It is not easy at the team level. It is not easy at the department level. It is not easy at the company level.  Which is why so few of us are in a state of integrity: between what we say, what we believe/value, and how we actually show up and operate in life.  This means that the world is for the taking by the bold: those who are investing their blood, sweat, and tears consistent with the persons/organisation they aspire to be. And a future they aspire to create.

It occurs to me that the core challenge of leadership is not that of vision creation. Nor that of communicating vision. I say it is the political challenge that goes with changing the allocation of resources – and dealing with the blowback from the folks impacted by the changes.

And finally, I dedicate this conversation to a friend. He knows who he is.  I wish him the very best with the game that he his playing this year!

Is this the access to profitable revenues, loyal customers and enduring success? (Part I)

Being a physics graduate I value an insightful theory that opens up new domains of enquiry and provides access to breakthroughs in performance.  Now and then I come across a business author who nails it, who provide such a theory.  It occurs to me that Clayton Christensen nails the essence of the customer-centric approach to doing business. And it just happens to be at the core of my consulting work.  Let’s start.

Do you have a deep understanding of what problems customers are trying to solve?

Let’s start with a truth that is so neglected. When I say neglected, I am not saying that you have not heard this truth.  I am clear that many of you will have heard of it – most likely it is a platitude.  And that is the very reason that this truth is not taken to heart, not lived, not given life in the world of business.  What truth?  This is what Clayton Christensen says in his marvellous book How Will You Measure Your Life?(bolding is my work):

“Many products fail because companies develop them from the wrong perspective.  Companies focus too much on what they want to sell their customers, rather than what those customers really need. What’s missing is empathy: a deep understanding of what problems customers are trying to solve.  The same is true of our relationships: we go into them thinking about what we want rather than what is important to the other person.  Changing your perspective is a powerful way to deepen your relationships.”

Why does this passage speak to me? It is my experience. Time after time in my consulting work I am struck by the truth of this understanding.  A lack of empathy and understanding for the customer as a human being who becomes a customer of the organisation in order to ‘hire’ that organisation – through its people and ‘products’ – to get a job that matters, done.

What can we learn from IKEA?

IKEA is an incredibly successful discount furniture retailer.  It has been in business for over 40 years, it has global revenues in excess of 25 billion euros and Ingvar Kamprad (the owner) is one of the richest men in the world.  The success of IKEA is not based on secret formulas, intellectual property, nor barriers to entry. So why is it that nobody has successfully copied IKEA?  This is what Clayton Christensen says (bolding is my work):

IKEA’s entire business model – the shopping experience, the layout of the store, the design of the products and the way they are packaged – is very different from the standard furniture store.  Most retailers are organised around a customer segment, or a type of product….

IKEA has taken a totally different approach. Rather than organising themselves around the characterisation of particular customers or products, IKEA is structured around a job that customers periodically need to get done.

The “job to be done” as a source of innovation, growth and competitive success?

Let’s continue listening to the wisdom of Clayton Christensen:

Through my research on innovation ….. my colleagues and I have developed a theory about this approach to marketing and product development, which we call the “job to be done”. The insight behind this way of thinking is that what causes us to buy a product or service is that we actually hire products to do jobs for us.

We don’t go through life conforming to particular demographic segments: nobody buys a product because he is an eighteen to thirty five year old white male getting a college degree. That may be correlated with a decision to buy this product instead of that one, but it doesn’t cause us to buy anything. Instead, periodically we find that some job has arisen in our lives that we need to do, and we then find some way to get it done.  If a company has developed a product or service to do the job well, we buy, or “hire” it, to do the job.

The mechanism that causes us to buy a product is “I have a job I need to get done, and this is going to help me do it.

So if you are going to segment your customers then segment them by the jobs that they “hire” you for. Here, I want to point out that you can use this “jobs to be done” approach for all customer touchpoints.  For example, what jobs do your customers hire your call-centre for?  What jobs do they hire your website for?  What do they hire your facebook page for?

Back to what we can learn from IKEA? 

Having set out his theory, Clayton Christensen returns to IKEA and explains the cause of its success as follows:

IKEA doesn’t focus on selling a particular type of furniture to any particular demographically defined group of consumers. Rather, it focuses on a job that many consumers confront quite often as they establish themselves and their families in new surroundings: I’ve got to get this place furnished tomorrow, because the next day I have to show up at work. Competitors can copy IKEA’s products. Competitors can even copy IKEA’s layout. But what nobody has done is copy the way IKEA has integrated its products and its layout.

This thoughtful combination allows shoppers to quickly get everything done at once….. In fact, because IKEA does the job so well, many of its customers have developed an intense loyalty to its products.

What is the lesson according to Clayton Christensen?

He sums it up well and find me in total agreement:

When a company understands the jobs that arise in people’s lives, and then develops products and the accompanying experiences required in purchasing and using the product to do the job perfectly, it causes customers to instinctively “pull” the product into their lives whenever the job arises. But when a company simply makes a product that other companies also can make – and is a product that can do lots of jobs but none of them well – it will find that customers are rarely loyal to one product versus another. They will switch in a heartbeat when an alternative goes on sale. 

I will continue the conversation around the ‘jobs to be done’ approach of doing business and creating superior value – for the customers and your business – in the next post in this series.

A skeptical look at 2012 and best practices

Skeptic does not mean him who doubts, but him who investigates or researches as opposed to him who asserts and thinks that he has found. [Miguel de Unamuno, “Essays and Soliloquies,” 1924]

What shows up for me when I reflect back on 2012?  It occurs to me that most of what is written on all things business – including customer – is driven by the need of people and organisations to sell something: a product, a service, a solution, themselves.   Put differently, it is marketing.  The job of marketing is not ‘truth’ nor ‘usefulness’.  No, the job of marketing is to bypass the mind and pull the heart strings so as to move the human being to act in accordance with the wishes of the marketer.  And as such that which is written – including every post that I write – should be questioned.  More accurately, it should be tested to determine if it is science or merely philosophy masquerading as science.

I say that the area that needs the most urgent and critical examination into that which is merely philosophy masquerading as science is  in the areas of customer theory (CRM, Customer Experience, loyalty) and best practices.   

Why go to the trouble to question, research, investigate and test stuff out for ourselves?  Because there is a world of difference between genuinely useful theory (‘good theory’ the term used by Clayton Christensen) and that which masquerades as useful theory.  What do I mean?  I’ll let Clayton Christensen speak on the matter:

“Consider, for example, the history of mankind’s attempts to fly.  Early researchers observed strong correlations between being able to fly and having feathers and wings.  Stories of men attempting to fly by strapping on wings date back hundreds of years.  They were replicating what they believed allowed birds to soar: wings and feathers. 

Possessing these attributes had a high correlation ….. with the ability to fly, but when humans attempted to follow what they believed were “best practices” of the most successful fliers by strapping on wings, then jumping off cathedrals and flapping hard … they failed.  The mistake was that although feathers and wings were correlated with flying, the would-be-aviators did not understand the fundamental causal mechanism … that enabled certain creatures to fly.  

The real breakthrough in human flight did not come from crafting better wings or using more feathers.  It was brought about by Dutch-Swiss mathematician Daniel Bernouelli and his book Hydrodynamica, a study of fluid mechanics…. he outlined …. a theory that, when applied to flight, explained the concept of lift.  We had gone from correlation (wings and feathers) to causality (lift).  Modern flight can be traced directly back to the development and adoption of this theory.”

I say that most of what is pushed as “best practice” in business – including the areas of CRM, CXP, customer loyalty – is merely anecdote and correlation.  And putting in place these ‘best practices’ and expecting to win the game of business is about as sane as strapping on feathers and wings and expecting to fly! I say that you should adopt/live the best practice of deeply questioning best practices.

If you disagree with me then please share your perspective.  I am particularly interested in anyone who thinks they have found the equivalent of lift (causal mechanism) for business success, for engendering customer loyalty.  Please know that I am open to being proved wrong, to be shown the error of my ways – and I mean that genuinely.  Or as Clayton Christensen puts it:

“But even the breakthrough understanding of the cause of flight still wasn’t enough to make flight perfectly reliable.  When an airplane crashed, researchers then had to ask, “What was it about the circumstances of that particular attempt to fly that led to failure? Wind? Fog? The angle of the aircraft?” Researchers could then define what rules pilots needed to follow in order to succeed in each different circumstance.  That’s a hallmark of good theory: it dispenses its advice in “if-then” statements.”

And finally, I recommend Clayton’s book How Will You Measure Your Life.  It is a great read. And if embraced it will make a contribution to your life, your business.