In our last blog, we argued that great strategies stem from impossible questions, typically a long-term one (e.g., Tesla’s how to create an electric vehicle the every-day consumer can afford?) and a near-term one (e.g., today Tesla’s might be how to establish the capacity to manufacture at scale?).
Today, we’ll review the second step in the IDEAS framework, “Dissect”. This is a step that is often overlooked by strategists and business owners. The Dissect phase teaches the 8Ps framework created by Kaihan Krippendorff.
DISSECT for true distinction
Most industries fall into a pattern, returning by habit to the same set of leverage points. Retailers fret over merchandising, store location, and store layout, overlooking opportunities for creating true differentiation through people, say, or processes. Technology companies fall into the pattern of focusing on customer needs, great products, and people. Real estate brokerage is all about generating leads, recruiting agents, and managing your brand.
Incumbents call these areas of focus “key success factors” (KSFs), an idea introduced in 1961 by D. Ronald Daniel of McKinsey. The idea was that success in any business demands understanding and performing on a few things that must go well for a business like yours to succeed.
Our research shows that such a focus on KSFs may deliver average performance but is unlikely to deliver greatness. To truly outperform your peers, it helps to understand the leverage points your competitors care about (their KSFs) and deliver on those, but then ALSO deliver on leverage points they overlook.
In the retail world, Urban Outfitters has logged long stretches of outperformance by innovating along a leverage point others under-appreciate: people. Their strategy centers on hiring artists with natural aesthetic leanings, and giving them remarkable freedom to shape the interiors of stores. Zara has done the same by leveraging processes, specifically a distribution model that allows them to replenish store inventory in weeks rather than months.
So, how do you think through and strategically select the leverage points that will kick you into high-gear so you overtake your competition and lead the pack?
At Outthinker, we have our clients seek ideas across eight dimensions, which we call the “8Ps”: positioning, pricing, promotion, placement, product, processes, physical experience, and people.
In future posts we will go into each of these eight in more detail, but here we’ll provide a quick list:
- Positioning: Knowing who your customer is (and is not) and developing a brand that is distinctively positioned in their minds as meeting a unique need. Think of this as your branding strategy.
- Pricing: Not only whether you are priced high or low, but the basis on which you choose to price your offer (e.g., membership fees, usage frees, freemium models).
- Promotion: How you communicate with prospective, existing, and past customers. Think of this as sales, marketing, and PR.
- Placement: How you deliver your value proposition, including store locations, online/off-line, distribution partnerships and paths. Think of this as your channel strategy.
- Product: The attributes your product or service delivers on. Don’t think just about the core product but all the ancillary services around the core (accepting payment, providing information, customer service, etc.).
- Process: Think of this as your operations, including the core processes you implement to create and deliver value (taking in inputs, adding value to them, storing them, delivering them) but also the back-office processes like accounting, compliance, performance management, etc.
- Physical experience: The customer experience which, at its most fundamental level, means what the customer sees, smells, hears, tastes, or feels when they interact with your brand or product/service. This includes what they hear when they call customer service, feel when they open the packaging, or hear when they walk into the door.
- People: Who you hire, what your organizational structures and norms look like, your cultural norms, and your incentive structures. This leverage point has been growing in importance among outperforming companies over the last ten years.
For each of these 8Ps, ask yourself:
- Is this something my competitors are focused on (e.g., because they view it as a KSF)?
- Is it something they are overlooking?
- Is it a strength for us today?
- Is it a weakness?
This will help you choose which dimension to focus on right now to begin unlocking disruptive growth.
TWO WAYS TO APPROACH THE 8Ps
A frequent question during the Dissect phase is “Is there a proper way to approach using the 8Ps?”. The answer depends on the size of your business, strategic priorities, and for corporate event planners, the audience composition.
During the Dissect phase, the 8Ps framework can be used in two different ways.
- If your goal is to come up with a unique and “disruptive” strategy that drives significant growth (or hyper-growth), disrupts an industry, or creates a unique competitive advantage, the 8Ps are used to help you tactically choose leverage points to focus on that will distinguish your business strategy and create a disruptive business model. The 8Ps are used in this way most frequently by corporate strategy and innovation teams, executive teams, BUs, and entrepreneurs looking to disrupt. For corporate events and conferences, this is popular for events that are about disruptive innovation, growth and hyper-growth, agile mindset, and/or strategic thinking.
- If your goal is to come up with a well-thought-through strategy that can be your strategic roadmap – a practical list of prioritized tasks, initiatives, and steps for your business to focus on, the 8Ps are used to help you create a pool of ideas and options (or deepen an existing pool) through creative ideation, tactically filter and prioritize those ideas, and build them into one’s own strategic roadmap. The 8Ps are versatile in that they can be applied through any single or combination of strategic lenses- be it cost cutting, adding new products, rethinking pricing, increasing profitability, improving processes, focusing on operations, attracting talent, focusing on your member and customer experience, finding new markets, exploring partnerships, or how we distribute.
Who are the 8Ps for?
Entrepreneurs, small business owners, founders, and CEOs use the 8Ps as frequently as they are by mid-market and Fortune 500-sized organizations. It is used by entrepreneurs, business owners, founders, CEOs, corporate strategy and innovation teams, executive teams, and functional units that want to be the disruptor, grow quickly, increase innovation, and develop a competitive advantage. It is a great organizational level “Hackathon” methodology that gives people space to think innovatively, build connections, contribute, and understand the company strategy, which all leads to increased innovation and agile thinking across the organization.
If you are a company or association putting on an event with an audience of business owners, members, franchises, or teams, we find usage #2 of the 8Ps framework ideal. Perfect for the audience that wants an extra dose of “practical” and “walking away with something”. There is a free full workbook or 1-pager available on the tools page where participants can apply what they learn in real-time (or their next day at work) so they leave with a list of valuable ideas and actions to explore and take back to their business. On average 95% of people that go through the process have at least three valuable ideas they are going to work on.