Connecting the Dots to Win.
Since 2015, I’ve focused on helping CEOs and C-suite leaders as a board director, advisor, and mentor.?Through my work on both public and private boards, as a management advisor, and in roles such as executive-in-residence for a PE firm and a start-up incubator, I’ve gained valuable insights from working with leaders across industries and at different business life-cycle stages on one of the most challenging executive responsibilities: charting a winning strategy.
Identifying the strategy that positions a company to win is complex because there’s no surefire formula.?Sometimes, it comes in a flash of inspiration; other times, it requires hours or even days of deep thought, debate, and iteration.? The strategy might come from one individual or demand a collective effort.? In today’s dynamic marketplace, the challenge is even greater due to factors like:
If there’s one conclusion I can draw without hesitation, it’s that successful companies have the ability to “connect the dots” strategically and operationally across all aspects of their business.
What is “connecting the dots”?
You may recall the “Nine Dots” puzzle, where the objective is to connect all nine dots using four continuous lines without lifting your pen.? The puzzle can’t be solved unless you think outside the box—literally.
Charting a winning strategy requires the same approach. ?Thriving companies constantly reevaluate their place in the market, free from legacy thinking or organizational inertia.? They go outside the square. ?Operationally, they align their functions to deliver a seamless customer experience. ?Unfortunately, many companies—some even known for their strategic smarts—remain trapped inside the box.
Two examples of dot-connecting failures.
Nike:
Recently, Nike has struggled, largely due to its heavy focus on direct-to-consumer (DTC) sales. Doubling down on DTC wasn’t the problem—sidelining its wholesale business by delisting large accounts was. ?A $50 billion business needs a broad distribution network to meet the diverse needs of its customer base, something its stores and digital presence alone couldn’t achieve. ?By underestimating the importance of specific consumer segments who shop at retailers Nike exited, it failed to connect the dots.
Another misstep was the shift from a sports-category model to a gender-based structure. Product innovation focused on enhancing athletic performance—central to the category model—gives companies a competitive edge. But with the gender-based approach, Nike lost ground to competitors like On and Hoka. ?Compounding the issue were layoffs that resulted in the loss of valuable product knowledge.
Starbucks: Howard Schultz envisioned Starbucks as the “third place” between work and home, where customers could enjoy great coffee and linger without pressure. ?But recently, Starbucks has struggled with declining employee morale and poor business results, ultimately leading to a CEO change.?
The root issue? ?Over-reliance on its mobile app. ?While it was a strong driver of sales, it created operational bottlenecks during peak hours, increasing customer wait times and frustrating employees. ?The store experience that had once defined Starbucks was lost in the process.
In both cases, the decisions to focus on DTC or mobile sales weren’t inherently wrong. ?The failure was in not connecting the dots operationally and missing key opportunities to optimize both customer and employee experiences.
Why is “connecting the dots” so important.?
In today’s marketplace, where meaningful experiences are the key to success, a company’s ability to connect the dots is essential. ?Joseph Pine and James H. Gilmore coined the term "experience economy" in 1998, and since then, rapid changes—digital transformation, the Great Recession, the pandemic, and now AI—have only heightened the need to create experiences that resonate.
Business theory once held that companies needed to master one of the four Ps—Product, Price, Place, or Promotion. ?Today’s experience economy requires two additional Ps - People and Processes. ?Companies that seek to thrive must seamlessly integrate all six Ps to create experiences that consumers find valuable.
At Nike, the failure to connect Product, Place, and People hurt its success, while at Starbucks, the breakdown was in connecting People and Processes, which ultimately affected the Product.
Characteristics of companies that fail to connect the dots.
How can companies get better at connecting the dots?
Create a curious culture. As a CEO, cultivating a curious culture that fosters open and constructive conversations at all levels is crucial. ?A curious culture encourages asking great questions, which leads to great answers. In?A More Beautiful Question, Warren Berger writes, “one of the most powerful forces for igniting change in business is a simple, underappreciated tool that can help identify and solve problems, come up with game-changing ideas, and pursue fresh opportunities. ?So why are we often reluctant to ask why?”
Mastering the skill of asking the right questions is essential for critical thinking and connecting the dots.
Build a holistic understanding of the marketplace and your customers. Understanding what’s happening in the marketplace and knowing what customers expect is a key capability. ?This involves tracking macro and micro industry trends, demographic shifts, customer usage patterns, competitive dynamics, and sales channel performance. The goal is to gather data from every vantage point to get a 360o view of the business.
Primary research is valuable but can be expensive. ?Companies often overlook more cost-effective sources, such as customer feedback. ?Sam Walton famously spent much of his time visiting stores to talk with managers, frontline employees, and customers. How often do today’s CEOs and C-suite leaders do the same?
Customer service can go beyond handling inquiries—it can be a valuable channel for gathering insights. ?User reviews and social media are also rich sources of direct feedback.
Jason Green of The Cambridge Group shared a recent case study:
“We recently used consumer reviews, web-scraping, and a new AI interface to pinpoint an emerging issue for a retailer. ?The granular, near real-time data provided the insights needed to find the right solution, leading to soaring reviews and sales. ?The client acknowledged that if they had relied on traditional approaches, they wouldn’t have identified or solved the issue for at least 6–12 months.”
Use data as the lubricant. Data can help break down silos and foster open discussions across the organization. Ideally, one leader, such as the CFO, should be responsible for establishing a disciplined, company-wide data strategy. ?Aligning specific KPIs at the C-suite level and building the annual operating plan from the ground up ensures shared accountability and ownership.
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Companies often take a top-down approach to annual planning. ?The CEO and CFO set growth targets, and operators create plans to hit them. ?However, zero-based, bottom-up planning is just as important. ?I often request a customer-based plan. ?Every business has two growth paths: acquiring new customers or driving more sales from existing ones. ?A zero-based customer plan provides clarity on sales and marketing strategies and tactics. Including the supply chain functions ensures cross-functional alignment.?????????????????????
Be a balanced right-brain and left-brain operator. Embracing data analytics doesn’t mean becoming data-dependent. ?Companies that thrive have leaders who appreciate data but aren’t beholden to it. ?Balanced right-brain and left-brain thinking enables decision-making when intuition is required, or when data isn’t available. ?A culture that allows for calculated risks—and doesn’t penalize decisions that don’t work out—is essential.
Finding perfectly balanced talent is difficult, but organizations can foster a mix of right- and left-brain thinkers, creating environments where both mindsets intermingle and co-create.
Nail the business processes. Effective business processes are one of the most overlooked but essential components of success. ?Many companies falter due to operational failures. Beyond the Starbucks example mentioned earlier, recent issues at Southwest Airlines and Boeing highlight the importance of seamless processes and accountability.
Processes aren’t just about manufacturing or technology; there’s significant value in reengineering how work gets done across the organization. ?Every company, big or small, legacy or start-up, faces bottlenecks. ?These inefficiencies often show up in financials or employee complaints, but leaders rarely elevate process improvements to “must-do” status because ROI is hard to quantify. ?When financial performance forces action, leaders often opt for drastic measures like layoffs, even though process reengineering might offer a more effective solution without damaging morale.
I’ve also seen companies so proud of their rich history that they become entrenched in legacy strategies and processes, resisting change. ?Southwest Airlines is a recent example.
People do matter. A curious culture requires engaged employees. ?Most CEOs agree that creating an engaged workforce is crucial, and many have adopted tools to improve engagement. ?However, the link between engagement and business outcomes is often overlooked. ?If CEOs and CFOs can draw concrete correlations between engagement and business results, investing in capabilities—such as business process reengineering—that boost both satisfaction and productivity becomes an easier decision.
?Here are some examples of how employee engagement ties to business KPIs:
Increased understanding of how engagement links to tangible business results strengthens company culture.
The greatest dot-connector?
In my opinion, Steve Jobs was one of the best dot-connectors of our era. ?Under his leadership, Apple created an unparalleled, integrated ecosystem of hardware, software, user experience, digital apps, digital distribution, proprietary content, and omnichannel retail. ?He was the first to understand the importance of a user-friendly interface with the Mac in an industry focused on technical specs. ?He revolutionized the mobile phone industry with the iPhone’s app-based experience, created a best-in-class retail store experience, and transformed the digital music industry with the iPod and iTunes. Jobs always thought outside the box to achieve these innovations.?
Which companies are great dot-connectors??
Identifying great dot-connecting companies requires more than public data—it needs an insider’s perspective. ?However, we can glean examples of dot-connecting behavior by observing specific aspects of a company’s approach to its 6 Ps. ?While this may not provide conclusive evidence that a company is a complete dot-connector, it offers a solid starting point.
Netflix: Netflix is an excellent example of a company that has repeatedly stepped outside the box strategically. ?Netflix has continuously reinvented itself by accurately predicting changes in consumer media consumption and adapting to new digital experiences. ?It leveraged viewership data to recognize the critical importance of content ownership.
Starting as a DVD rental-by-mail service, Netflix transformed into a dominant streaming platform by offering the largest video catalog. ?Later, it became the first streaming service to prioritize original content, fundamentally altering the streaming landscape. ?Its investment in proprietary shows and movies cemented Netflix’s position as a major player in Hollywood production.
Netflix continues to evolve. ?In 2022, it introduced a lower-priced membership tier with ads, tapping into new customer segments and creating additional revenue streams in response to growing competition and market saturation.
Dyson: My first experience with Dyson was at a hotel in Tokyo that provided Dyson hair dryers. Curious about the product, given its $400 price tag, I used it and was immediately impressed. ?After just one use, my wife and I were convinced, and we ordered one as soon as we returned home.
Why was I willing to spend four times more than my previous dryer? ?Dyson delivers an exceptional price-value equation across several dimensions:
While this doesn’t tell the full story of Dyson’s ability to connect the dots, they excel in Product, Price, and Process.?
Lifestyle Activewear Brand: Dan LeBlanc , CEO of Daasity, a data analytics platform, highlights one of its clients—a “unicorn” lifestyle activewear brand—as a strong example of leveraging data analytics to create a unified shopping experience.?
This brand started as a pure DTC operator but has since evolved into an omnichannel powerhouse, with its own retail stores and wholesale accounts. ?Understanding that driving repeat purchases is essential for sustaining hypergrowth, the brand strategically invested in data analytics to integrate across all channels, providing a holistic view of its business.
Powered by Shopify for e-commerce, they opted to use Shopify POS for their retail stores. This setup allowed them to track both in-store and digital purchases in real time, giving them better insight into the impact of their marketing efforts. ?This data-driven approach helps create unique in-store experiences (e.g., gifts with purchase, promotions) and leverages in-store data to enhance email personalization.?
Marketing personalization is a critical strategy for this brand. ?To achieve better precision in its messaging, the company developed a proprietary segmentation model that combines the traditional RFP methodology with product purchase and buyer behavior modeling.
The brand also uses Daasity to integrate sales data from all its channels, including wholesale accounts, providing a comprehensive 360-degree view of the business.
In summary:
The ability to connect the dots—strategically, operationally, and culturally—is what separates companies that merely survive from those that thrive in today’s fast-changing marketplace. ??Leaders must be willing to step outside conventional thinking, reassess their assumptions, and embrace cross-functional collaboration to unlock the full potential of their organizations. ?This means fostering a curious culture, leveraging data, and designing processes that align every facet of the business to deliver cohesive, meaningful experiences for customers and employees alike.
Ultimately, companies that succeed in connecting the dots are not only agile but also forward-thinking. ?They anticipate market shifts, evolve with changing customer expectations, and remain competitive by integrating all aspects of their operations seamlessly. ?In an era where experience is king and innovation is a constant, these companies are best positioned to not only survive but to define the future of their industries.
Healthcare Executive, CEO, Chair and Board Member
4 个月Chris, our team recognize this challenge more than most. Moving from a traditional go-to-market to a dot driven multifactorial approach is driven, for us, by deep thought, debate and iteration. Ironically, for such a data driven strategy it's not a straight line and algorithmic, its more logical incrementalism a "day at a time" and there is no box. Respecting the past whilst forging the future has never been so inspiring and challenging. In all of this endeavor, we appreciate your guidance and help.
CEO, CTO, CPO - AI Transformation & AI/ML Expert, Lecturer
5 个月Chris, it's always a thrill to collaborate with that awesome brain filled with deep expertise across organizations of yours. Your insights always energize us to balance technology with the broader contexts of people, process and org culture. Themes that resonated with what is top of mind for me these days, that we have discussed include: - Connecting all aspects of operations, from data systems to strategic decision-making, ensuring technology and business strategies work in harmony. - Fostering a data-driven culture that embraces advanced analytics and encourages curiosity at all levels of the organization. - Viewing transformation as an ongoing process, continually evolving capabilities and strategies to maintain competitiveness in a changing market. These ideas are crucial for driving *practical* and *lasting* transformations for our clients and ecosystem in the AI era. Looking forward to our next thought-provoking chat and collab!
Executive President - Quest Global Services
5 个月names from the past delivering a great POV ( which I do agree with). We are in a Zeitgeist moment. technology and access to data are no longer the roadblock. it is us. Love it, break the frame of reference. great seeing this.
Assistant Professor of Marketing @ University of Mississippi | Founder/CEO Creative Commerce Consultancy | MBA - Delta Mu Delta Honor Society Pi Sigma Epsilon - Faculty Advisor Ole Miss
5 个月Well done Chris! Great Insights and examples. I enjoyed the read.