Good Execution – Strategy – a new possibility

The three processes—people, strategy, and operations— remain the building blocks and heart of good execution. But as the economic, political, and business environments change, the ways in which they are carried out also change.”

Larry Bossidy, Ram Charan, Charles Burck

Change vs. Inertia

Change or not change, that’s the constant tug of war an organization faces. Change being only constant, and our love of inertia (why to change), leads to this war within each organization. A successful company becomes successful, by knowing customer better than its competition, but then same company faces competition to safeguard its turf due to its ‘belief’ that they know customer! Customers are more prone to change, and they have fewer option to avoid it, and the organization which constantly tap such changes in customer’s expectations make it sustain and bloom constantly!

Recently I read book “Execution: The Discipline of Getting Things Done”

⁉️ The Question

With such challenges, the book help answer following three questions, these aspects not only enable a faster change but also help us being more dynamic and adaptive to constantly changing environment.

1. How can executives effectively bridge the gap between high-level strategic decisions and the day-to-day choices made by employees at the front lines of the organization?
2. In what ways can traditional strategic planning methods be reimagined to foster more creativity and innovation within a business?
3. What role does fear of change play in preventing organizations from adopting new strategies, and how can this fear be mitigated to encourage more effective decision-making?

The thing is not always what we assume it is. Often, we get in our own way when solving problems with a new way of thinking, because we’re afraid it won’t yield better results than the tried-and-true methods of yesterday! We need a framework for thinking through the most common problems with a new lens on what might work to bring about the most effective, long-term solution

👂Where is the competition, who is listening?

In business, where competition is between products rather than companies, the line of sight between a CEO’s decisions and whether a customer will buy a product at any given time is much less clear. The individual outcomes of customers’ decisions are far from easy for executives seating in head office, removed from the front line, to predict and control.

If the judge of the value of any product or service is the customer who chooses to buy, not the provider, then it is the provider’s (Company’s) people at the front line, in front of the customer, who are best placed to determine what the customer values. It is up to the rest of the company to help the people in the front lines, where the revenues come in, to satisfy those customer needs. The lower level, in effect, is the customer of the level above it. And like a customer, it should expect to get more value from those services than it pays to get them.

Companies should build Cumulative advantage as the layer on its initial competitive advantage by making its product or service an ever more instinctively comfortable choice for the customer. Focus on helping customer make easy choice over making the product a habit.

🎲 Customers are beyond Rationality

The common belief about competitive advantage is that successful companies choose a position, focus on certain consumers, and design activities to serve them better. The aim is to get customers to buy again by matching the value offered to their needs. By creating unique and personalized experiences, the company can maintain a competitive edge. This way of thinking assumes that consumers make careful and logical decisions. Although emotions may play a role in buying, many times these decisions come from a conscious thought process. A good strategy understands and responds to this thought process. However, research in behavioural psychology suggests that buying decisions aren’t always made consciously. Our brains work more like machines that fill in gaps: they take incomplete information and quickly complete it using past experiences. This fast thinking, known as intuition, includes thoughts and feelings that come to mind quickly and strongly influence our actions. It’s not just what we remember that shapes our quick judgments but also how easy and fast we can remember it. When we decide based on what “feels right,” it usually means our thinking process was smooth and effortless. Hence, one reason people often choose the leading product is simply that it is the easiest option available, as it stands out in the shopping environment.

😶 Customer Loyalty – Never take it for granted!

If consumers are slaves of habit, it’s hard to argue that they are “loyal” customers in the sense that they consciously attach themselves to a brand on the assumption that it meets rational or emotional needs. In fact, customers are much more fickle than many marketers assume: often the brands that are believed to depend on loyal customers achieve the lowest loyalty scores. So why do fringe brands like local competition survive? The answer, perhaps perversely, is that with big-brand loyalty rates at 50 percent, just enough customers will buy small brands from time to time to keep the latter in business. But the small brands can’t overcome the familiarity barrier, and although entirely new brands do enter categories and become leaders, it is extremely rare for an established fringe brand to successfully take on an established leader.

🫀Strategy not for faint hearted

Strategic planning often gets bogged down in numbers and analysis. This creates a sense of scientific rigor, but it can also lead to a lack of creativity. Many managers find that the annual planning process is time-consuming and doesn’t produce truly innovative strategies.

To break this pattern, we need to shift our thinking. As the saying goes, “In strategy, what counts is what would have to be true—not what is true.” Developing a winning strategy is like creating and testing scientific hypotheses. It involves imagining a new reality where our ideas would work and then figuring out what needs to change to make that happen. This creative process is just as important as the analytical one.

Few steps one can follow for such strategy building: A Possibility Based Approach

1. Move from Issue to Choice: Conventional strategy-making tends to focus on problems or issues, such as declining profits or market share. As long as this is the case, the organization will fall into the trap of investigating data related to the issues rather than exploring and testing possible solutions.
2. Generate Strategic Possibilities: Constructing strategic possibilities, especially ones that are genuinely new, is the ultimate creative act in business. To generate such creative options, you need a clear idea of what constitutes a possibility. You also need an imaginative yet grounded team and a robust process for managing debate.
3. Specify the Conditions for Success: The purpose of this step is to specify what must be true for each possibility to be a terrific choice. Note that this step is not intended for arguing about what is true. It is not intended to explore or assess the soundness of the logic behind the various possibilities or to consider data that may or may not support the logic—that comes later.
4. Identify the Barriers to Choice: Now it’s time to cast a critical eye on the conditions. The task is to assess which ones you believe are least likely to hold true. They will define the barriers to choosing that possibility.
5. Design Tests for the Barrier Conditions : Once you’ve identified and ordered the key barrier conditions, the group must test each one to see whether it holds true. The test might involve surveying a thousand customers or speaking to a single supplier. It might entail crunching thousands of numbers or avoiding any quantifiers at all. The only requirement is that the entire group believe that the test is valid and can form the basis for rejecting the possibility in question or generating commitment to it.
6. Conduct the Tests: Typically, at this step you bring in people from outside the strategy team—consultants or experts in relevant functional or geographic units who can help fine-tune and conduct the tests you have prioritized.
7. Make the Choice: In traditional strategy-making, finally choosing a strategy can be difficult and acrimonious. The decision makers usually go off-site and try to frame their binders of much-discussed market research as strategic options. With the stakes high and the logic for each option never clearly articulated, such meetings often end up as negotiations between powerful executives with strong preconceptions. And once the meetings are concluded, those who are skeptical of the decision begin to undermine it. With the possibilities-based approach, the choice-making step becomes simple, even anticlimactic. The group needs only to review the analytical test results and choose the possibility that faces the fewest serious barriers.

Summary 🔖

It’s a new model, introduced in the ongoing dialogue about the existing frameworks we rely upon to enhance the effectiveness of our strategies. The essence of this discourse revolves around a fundamental truth: you are the master of your models. It’s vital to understand that if you find yourself constantly attributing failures to your model while simultaneously striving to harness its potential, then, inadvertently, you have granted it a monopoly over your thought processes. This situation creates a paradox where the model, rather than serving you, becomes an oppressive force, dictating your decisions and stifling creativity.

Imagine this scenario: you enter into an agreement with a model, believing it has the keys to success. You attempt to optimize your connection with it, tweaking here and there, but the results remain disappointing. Each setback chips away at your confidence, leading to a self-blame spiral. You question your abilities, thinking you simply have not mastered the model’s intricacies. This is a dangerous mindset; it breeds dependency and diminishes your agency.

In contrast, if you adopt an empowered position and hold your model accountable for its outputs, you take the reins of your intellectual journey. You evaluate its effectiveness in delivering the promised results consistently. When you find it lacking, instead of forcing it to work for you, you make the courageous decision to discard it and seek out better alternatives. It’s an exercise in discernment and strategic thinking—embracing flexibility and adaptability rather than a rigid adherence to a failing system. If a model does not meet your needs or align with your goals, there’s no shame in letting it go. After all, your primary objective is to cultivate strategies that genuinely foster growth and drive success, not to be shackled by ineffective tools. Embrace the autonomy of ownership over your models, ensuring they serve your aspirations effectively rather than the other way around.