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 – our proven process for designing a breakthrough strategy – and the step most strategic efforts overlook: “Dissect” your business and choose uncommon leverage points to focus on.
We’ll also share an invitation to a special no-cost Outthinker webinar that reviews the IDEAS framework and allows participants to ask questions (see below). If you are in New York, you can also join us for a free workshop hosted by L’Oreal by clicking here.
DISSECT for true distinction
Most industries fall into a pattern, returning by habit to the same set of leverage points. Retailers fret over merchandizing, 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.
INVITATION TO SPECIAL EVENT WITH OUTTHINKER
On August 29, from 7-8 AM ET, you are cordially invited to a breakthrough webinar that will review the Outthinker process, with 30 minutes of Q & A. There is no cost associated with this webinar. Today is the last day to register.
In the webinar, Outthinker outlines the five mistakes teams often make that tend to kill off the most exciting strategic possibilities. Based on years of research and my book Outthink the Competition: How a New Generation of Strategists Sees Options Others Ignore, this discussion will cover a way to counter each mistake, called the IDEAS framework (Imagine, Dissect, Expand, Analyze, Sell).
This highly interactive program is for participants who want an introduction or review of this powerful approach to finding new strategic options and pursuing new innovation ideas with their clients.
Participants will review this world-class approach to landing innovative ideas in a company and a toolset that will enable them to identify the most relevant barriers that they need to focus on now to advance an idea in an organization.
If you have any questions about this course or any of our Outthinker programs, we’d love to talk with you. Please feel free to call my associate, Soyini, at 404-643-7643.