Strategy to Profits – My 5 Advice

To develop a successful strategy, one that brings more sustainable profits than competitors can obtain, you must define the purpose of the company, namely what core value the organization generates for its customers – what you really do for them. Thence, identify and optimize the activities that are the most important vehicles to deliver that value, while not allowing the implied missions to surpass the main mission in importance. These are the things I will elaborate upon in this article. I will discuss Mission Creep, the importance of a Core Value, Strategy development, Communicating strategy and Revisiting strategy.?

My work has led me to participate in plenty of corporate strategy planning sessions, partly led work streams and partly contributed in various ways. It has taken a considerable amount of my time. A good rule of thumb is that a medium to large size company spends between three and six months on its’ strategy development process, usually every second or third year. It normally involves anywhere from eight to fifteen people in the core strategy development team. In addition, several others are involved, working in specific workstreams, providing various insights, or as reference group members. It is a rough, yet fair, assumption that, for a medium to large company, between 5,000 and 10,000 manhours are spent on strategy development. Well spent hours? Worth it? Remember that the vast majority of people involved in strategy work are some of the best-paid ones.?

Two real-world examples: Medical device company. 10 senior executives in the core strategy team, and another 20 working on various work streams. In total, 5 months for strategy. The hours they spent in total on strategy amounted to 569.230 Euro (580 kUSD) in salary costs alone. Another company had 15 senior staff in the Core team and another 35 staff on various tasks. The total cost, including a one-week off-site meeting, amounted to approximately 990.000 Euros (1 mUSD). Neither one developed a strategy that changed anything for the customer and only marginally for the company itself.?

It is amazing how many companies, at least in my experience, still fail to develop a strategy that is truly meaningful, and actionable, delivering the results one would expect.?

I hope my learnings and thoughts will help someone or, at the very least, provide some food for thought.?

#1 Mission Creep

Before getting into the discussion about defining a Core Value and developing a corresponding Strategy, let me point out the importance of keeping the “right” objective in mind.?

The term “Mission Creep” was, albeit the concept already well-known and experienced many times over, revealed in a new shape to me by former Swedish special operation group (SOG) operator,?Jesper Berlin. Jesper makes?a good introduction to the topic?of main versus implied missions, and?mission creep, on?YouTube.?

In short, he suggests that supporting activities or processes – implied missions – far too often steal or are granted a higher degree of importance than the main mission. In the corporate world, this is evident during the annual budget process in many companies.?

Same thing with the infamous strategy sessions. For half a year, many senior managers work on developing the next three to five years’ strategy. Certainly, that is not all they do but quite a few hours are spent on this endeavor. It is not uncommon that companies also bring in external consultants from any of the big consultancies “because they have advanced models”. The model, the approach, and the process have become the critical parts of the strategy work.?They have become more important than reaching the main objective. The strategy development process has turned into a mission creeper.

The processes related to developments of budget and strategy, are indeed at risk of being mission creepers when their guardians place higher importance on these processes than what is, or should be, the company’s primary mission – serving its customers with an expected and well-defined customer value.

I suggest?the best way to limit mission creep is to be aware of its existence. Always stay on course to your main mission objective, delivering customer value. For example, “Budget season” can be replaced by a 12-month rolling forecast. The half-year bi-annual strategy sessions can be replaced with continuous revisits, every month or so (see #5 Refining Strategy). There will be many more projects and initiatives in your company that will inevitably try to become more important than the main mission, (travel cost initiatives, IT-initiatives, ERP system replacement, etc.). Look out for them. Respect them and recognize their importance – but never, ever, let them surpass your main mission in importance. Stay on course!

#2 Defining the Core Value

Strategy, as you will see, serves no purpose without a Core Value, and should never be a goal in itself. Strategy should always be about how to deliver the Core Value most effectively and sustainably.

Perhaps it is not so strange. If you don’t know what the specific value is that you deliver – how could you possibly focus on it? And, I am sure you agree, plenty of companies haven’t a good grip on what customer value they?really?market and sell.?

Why do some customers like the company? More than other vendors? If we go out of business tomorrow – what will those customers lose? Certainly not the tangible products or services that are offered – they are, in 99% of all cases, replaceable. If there is nothing more to offer than the tangible products – then you may not be around for much longer. If there is – better figure it out so you don’t lose sight of it.

In 1927, Assar Gabrielsson and Gustaf Larson, stated “Cars are driven by people. The guiding principle behind everything we make at Volvo, therefore, is and must remain, safety.” The two gentlemen were the founders of Volvo.?Volvo – Safety. I dare say you too would also make this connection. Even today, 95 years later,?they state?“We make cars for people who care about other people. So when it comes to safety, we think just as much about your surroundings as we do about you and your passengers.” Truly, Volvo understands its Core Value and its meaning. They deliver and communicate their Core Value to themselves and their customers (and to analysts, sub-contractors, and resellers). They deliver Safety.?

Knowing that, the development of a strategy becomes infinitely easier. With a clear main mission, it’s about exploring various paths leading to delivering more of that value, or the same amount at a lesser cost. The main mission stands firm and the process of establishing various routes, or supporting initiatives (implied missions), does not allow deviation from the main mission fulfilment.?

Another example is?Reuters. Already in 1850, Paul Julius Reuter found an ingenious way to speed the delivery of global financial information to market participants. His new technology was the carrier pigeon. The company Reuter founded survives to this day, although the pigeons have given way to a series of technological innovations, beginning with the telegraph and now with the Internet. Reuters continues to serve the enduring need for rapid information about financial markets, albeit with a very different set of activities today than it used more than 150 years ago. Example found in?“Understanding Michael Porter: The Essential Guide to Competition and Strategy”?by Joan Magretta

If you don’t yet have such clarity of what value you deliver – what do you do? You can choose between two paths:

(1) either you pick a core value that you instinctively “know” is the right one, without involving any customers or other external parties. Steve Jobs could do it with Apple. Perhaps you too? On the other hand – what are the risks if you miscalculated? In Apple’s case, they were on the brink of bankruptcy and there was clearly the need for something radical and fast to stay afloat, or possibly even grow. You may, and probably should, consider banking your career or company on your gut feeling to be just a bit too risky.?

(2) The other path is a bit more cumbersome but if you do it right you are much more likely to secure sustainable profits. You set out to discover what your customers appreciate about you and why they do so. You seek to understand what the real issues are that you help them solve, directly or indirectly, partly or fully. You set out to uncover your own Core Value.

The main mission of any commercial enterprise, its primary objective, is to deliver one or more defined values to its customers. Success depends on if the total perceived customer value is equal to or more than the cost for the customer to acquire it. The larger the spread, the higher the chance of success. Thus, understanding what your company really does – the value you deliver – the Core Value – and to whom it is relevant, is essential.?

The key to understanding the value delivered is, in one word, curiosity. Have your most curious person manage the work to interview customers and look at trends. Importantly, they shouldn’t just ask what the customer likes about the company; they should use their curiosity to obtain a thorough understanding of the customers’ real pain points,?regardless of whether those relate to your company or not. This is important. Unless you understand those real needs, you will never understand how relevant your offerings are.?

Curiosity gets people excited. Curiosity leads to new ideas, new jobs, new industries.

Anne Sweeney

According to Clayton Christensen, in his book?The Innovator’s Solution: Creating and Sustaining Successful Growth, you can identify jobs to be done (JTBD) (pain-points, unmet needs), by completing the following statements related to outstanding tasks:

“Help me…”

“Help me avoid…”

“I need to…”

You may, as an example, have a broad portfolio of quality slings for patient lifts – those slings used to attach a patient to a lift to move them e.g., from a bed to a chair, instead of having nurses lift them manually. Now, if the customer already has a good supplier that supplies them with all the slings they need, you may consider it a lost opportunity. Apparently, their needs have been satisfied already. It is not something they think about a lot and thus your offer will not be very relevant. Or is there another way?

I did encounter exactly this issue once. Still, being curious as always, I asked a nurse to show me a few rooms and how they worked. I had a little time to spare, after all. We had a nice conversation walking from one ward to another. It turned out that, although they had good quality slings, sometimes, the nurse told me, they didn’t get the correct slings back after having sent them for disinfection and washing.?This was a nuisance that took valuable time from them, having to search through the hospital for the correct ones.

Slings are quite specific. Some are used for children, some for obese persons, tall ones, short ones, different ones for various amputations and so forth. If you don’t have the right mix, this may cause you to not be able to use the patient lift.?

A week or so later, I returned and presented a solution in which we offered to manage all collection, washing, repairs, replacements, disinfections and returning, with a guarantee that each room should be equipped with a pre-defined mix, always.??They would not purchase nor own any slings; instead, we designed it as a service. We would manage all their sling needs and, during a 12-month agreement, we would use our company’s slings (obviously) and see to it that they always had clean and functioning slings of the correct mix in the correct room. Whether a sling needed repair or replacement would not be their concern anymore; they would just purchase the service of always having the right sling, ready to use, at the right place.?

This was a novel approach, at that time. By offering it as a service with monthly fixed payments, we moved expenditures from CAPEX to OPEX. We also removed several issues from them, like not having the right slings, not having to spend time checking if slings needed repairs, not having to decide on new sling purchases, and so forth. All things that took time away from focusing on?their?main mission, their Job To Be Done, caring for patients. We got the deal. Why? We were able to use the existing product portfolio but marketed and sold the value they needed, resonating with an existing pain-point, and to a price that was less than what they perceived the total value to be. You don’t always need new products to address needs, you need to sell them differently, create a new business model and explain the value in the context of their needs. Always ask yourself:?How can I help my customer/distributor do better business??How can I make it easier for them to focus on their main mission? How can I help them focus on their Job To Be Done?

Now, would this value, in the sling case, constitute a Core Value? Well, if (1) enough customers have the same need and that need is (2) financially sustainable over a foreseeable time and (3) the Value can be applied to your overall offer, and (4) it gives you a competitive edge over current competition that not easily can be replicated, then perhaps yes. I rather think it is a bit too narrow and easy to copy but if it solves a clear customer need for enough people, why not? Perhaps it constitutes a building block of a Core Value related to e.g., customer cost control or time savings???If not – keep speaking to your best customers who like you the most until you understand why they like you, over any other partner or vendor. Discover what their Job To Be Done really is and what they feel is preventing them to focus on it.

I have had many discussions with people that insist that we also need to speak with the customers that?don’t like us, so we understand where we fail to deliver. I humbly disagree. At this stage. Let me explain why.

Imagine asking people that dislike you,?why?they dislike you. You are likely to get quite a few things thrown at you that they disapprove of. Some will be valid, some not. What are you going to do? Change all those things and become something that as few as possible dislike? The chances are that those that really like you will now find that the person they liked, perhaps for the very qualities that others disliked, has turned into something quite different and beige.?You have become rather unexceptional at the best.

If you instead speak with people that like you and find out why they like you, you will be able to focus on becoming even stronger in those areas and expose more customers to that behavior. This will likely result in those that do like you now experiencing those positive traits even more and some that didn’t like you already also are exposed to those. A positive spin that will lead to higher customer retention and acquisition.?

There’s a reason why some customers like you. It could be because of a certain behavior you extend to them, the way you treat them. By looking at why some customers like you more than others, these strengths (that you extend to them) will become visible, and the value it provides them apparent. This is a more positive approach and likely an easier path to making more friends or customers – and retaining existing ones. You may have raised children (or dogs even) – then you know that the more you encourage the positive things they do, the less they will do the negative ones. Would you agree that there’s a good chance that the customers that?don’t?like you are treated differently? Do you service them differently? Do you visit them less frequently?

Just, please don’t even try to be liked by all, it will result in irrelevance to most. Be extremely relevant to those that benefit from the Core Value you deliver. Like strong personalities, strong company brands provoke both positive and negative emotions, whereas weak ones leave people untouched.

Find out what it is that makes your good customer like you and prefer you over competitors. Find your Core Customer Value.?

Note: After understanding your strengths and having defined your Core Value, you should certainly look at where you come across less positive. Perhaps there’s a specific thing that prevents you from even better customer experiences, like far too long service times, inadequate guarantees, lacking one specific feature, or anything else. Some customers may even like you but because of that weakness, they feel unable to purchase or purchase more. Importantly, I am not advocating turning away from your weaknesses, but to focus on the strengths first, thence make sure there are no blind spots preventing additional growth.

#3 Design the strategy

Developing a strategy is not an objective per se – it is about describing a path to reach the main mission’s objective, to create a certain value for your customers. If you realize that a strategy is a path on a map to reach the objective in the least cumbersome way, faster than competitors, and yield more profits than them, you have the right approach. In her book?Understanding Michael Porter: The Essential Guide to Competition and Strategy, Joan Magretta wrote "Strategy asks a more complicated question. How can we make more money than our rivals, how can we generate superior returns, and then, how can we sustain that advantage over time?” I think this is correct.

Strategy should never be about merely making more revenues. It is all about profits. Sustainable profits.?A good strategy is defined by our ability to?provide customer value enabling us to get more profit than our rivals, and that our competitive advantage remains sustainable over time.?If you have defined your Core Value and determined that there is a sustainable market for it and that you indeed can deliver it at a lower cost than its’ perceived value (what the customer are willing to pay), you should rest assured that profits will follow, and the revenues too.

Some time ago, I took part in a strategy session where there was close to unison agreement that the objective of the entire strategy should be to double the annual revenues. Then, we designed several so-called strategic initiatives, 10 or so as I recall it, to cut costs, increase efficiencies and fix a number of various internal issues. Not once did we even seriously consider having the customer and meeting their needs as the strategy’s centerpiece. It was, indeed, proclaimed that we should strive for a customer-centric strategy, but actions never followed those words. Did we believe the customer would be excited about us aiming at doubling our revenues? Would they gladly help us to achieve this? What was in it for them? I still don’t have a clue. I, for one, could certainly have raised my voice more and worked to have everyone agree to what value we brought our customers, but I failed to create any sort of consensus of both the core value as such or the importance of understanding it and formulating it. My learning from this is that the CEO, and the CEO’s direct reports, must understand and buy into defining and understanding the company’s core customer value, prior to initiating any strategy work.

Lewis Carroll put it aptly in?Alice's Adventures in Wonderland?when Alice meets the Cheshire Cat:?

"Alice: Would you tell me, please, which way I ought to go from here?

The Cheshire Cat: That depends a good deal on where you want to get to.

Alice: I don't much care where.

The Cheshire Cat: Then it doesn't much matter which way you go."

If you don’t know what specific core customer value you deliver – how could you possibly focus on it? If you have no clear objective – how could you possibly create a path (strategy) to reach it?

Once you have defined your Core Value, you need to maximize its potential. Using Porter’s value chain will guide you through this part. It works by breaking an organization's activities down into strategically relevant pieces so that you can see a fuller picture of the cost drivers, value drivers, and sources of differentiation.?

You will have to look at all activities performed by your company. Supporting as well as primary activities. Which activities contribute most to delivering the Core value? Those are the activities you primarily need to focus on. The others should get fewer resources or perhaps even be outsourced, if possible, in a financially justifiable manner. Describing in detail which activities to focus on, what to do to enhance them and from which other parts of the company you will pick the resources (I assume your budget isn’t unlimited) is what constitutes your strategy.

Joan Magretta writes:??

A distinctive value proposition is essential for strategy. But strategy is more than marketing. If your value proposition doesn’t require a specifically tailored value chain to deliver it, it will have no strategic relevance

Exchange “value proposition” with “Core Value” and you have the essence of my thinking.

The more you adjust and enhance your value chain, the harder it will be to replicate, and you will create a more sustainable competitive edge. A product or service may be copied tomorrow but a complex value chain to deliver a certain value is so much harder to copy. It takes time and resources, making it hard or financially unjustifiable to most others.?

If e.g., part of your Core Value is related to providing a premium customer experience, you will have to look at all customer touchpoints. Your website must convey that premium feel, in its design, user interface, and navigation. Physical products must, apart from being designed to feel and look premium, be packaged in a premium manner. One obvious example is the quality of the boxes that Apple devices are packaged in. On the other hand, if you are more about providing value for money, you will stay away from such fancy packaging and also let the packaging spell out that you don’t add unnecessary costs where they don’t bring the value you have set out to deliver.?

How do you answer calls at the switchboard, how do you respond to emails, and how does your Instagram flow come across? How are you perceived in any and all customer touchpoints, from digital and physical interaction to deliveries, product interaction and invoicing? Focus on how those interactions make a difference to your value delivery.

Spanish fashion house Zara has a good grip on its value chain.?Zara’s strategy is to offer cutting-edge fashion at affordable prices by following fashion trends and identifying which styles are “hot” and speedily getting the latest styles into stores.?

Speed is why most of their factories are based in Spain, their home market. That’s why they own their transport trucks. That’s why they put on price labels, press and put clothes on hangers before they’re on the trucks. The store staff can then merely take the clothes straight from the delivery truck to their store and start selling within minutes. Other clothes manufacturers send their clothes in boxes where the store staff must unpack, print and put on price tags, iron them and put them on hangers, which all leads to longer times before the customer can make their purchase.

Zara produces around 12,000 styles per year (compared to the retail average of 3,000), which means that fresh fashion trends reach the stores quickly. A typical Zara customer visits the store 17 times a year compared to the average of 3 times per year.?By reducing the manufactured quantity of each style, Zara creates artificial scarcity and lowers the risk of having stock it cannot sell. Scarcity in fashion increases desirability, which means shoppers need to buy quickly as the item may not be available next week. Lower quantities also mean there is not much to be disposed of when the season ends; Zara only discounts 18% of its stock in sales, which is half the industry average.

Zara spends relatively little on advertising (0.3% of revenue) compared with traditional retailers (3-5%). Instead, they reach their target market by locating their stores in prime locations. They too don’t have unlimited budgets, so they chose location as a main contributor to delivering value and took resources away from parts they deemed delivering less of that value. It’s not just what you should do – it’s at least equally important to state what you will not do.

Zara understands that strategy is a description of how to focus on optimizing the value chain to deliver a pre-identified value to its customers, over and over again.?

Above, I have outlined how the Core Value (and the corresponding Vision and Mission) is linked to Strategy.

When developing strategies, it seems inevitable to also formulate what is usually known as Strategic Objectives or Strategic Goals. Such should be defined but never be viewed as static. Remember that the main purpose of your organization is to deliver a certain value to your customers, not achieve certain objectives.

Jeroen Kraaijenbrink?writes in Forbes?that: “One can wonder why?the goals of the founder, the CEO, the board or the organization at large would be more important than everything else. Assuming this is the case is quite an egocentric starting point. Why, for example, would goals like being market leader, a 10 % increase in profit, doubling in size or Steve Job's "putting a ding in the universe" really matter? They merely reflect the formulator's wish to achieve something. More important, it seems to me, is the question?of?which value an organization creates, for whom and how. While that could of course be turned into an attractive goal as well, it is not the goal that is the starting point here, but what the organization can mean for others.”

The objectives you define as important activities that you need to perform to enhance your ability to deliver customer value should never be more than three at a time. With ten or more objectives and several sub-objectives, you will not be able to stay focused. Start with the three most important activities and do them well. Thence, pick the next three ones and perform them equally well. While continuously refining your strategy (see #5 Refining Strategy below) you may find some of those objectives obsolete or at least in need of changing. As long as your change delivers the Core Value more or better, don’t be afraid to change the objectives or re-prioritize them.?

#4 Communicating the Core Value and Strategy

When you have developed your Strategy to deliver your Core Value sustainably, it is time to start its implementation. You should now know which specific activities to focus on and which should receive less weight. However, you know this, and the core strategy team knows it. Perhaps a few more but certainly not everyone. The vast majority have heard bits and pieces by now but do not have the full picture. Like with any change management it will be essential to communicate, to enable as smooth an implementation as possible.?

Simon Sinek wrote the book “Start with Why”. He writes “Great businesses know why they’re doing what they’re doing—and they use that mission as their guiding principle” and elaborates around his three main bullet points, his Golden Circle:

The WHY: This is the vision of your company. It’s the motivation behind your service or product. It’s the mission that you stand for.?In this context, it is the Core Value.

The HOW:?The HOW are the practical steps you need to take to achieve your WHY. The HOW is the practical, operational knowledge that brings the vision to life.?You may think of this as your Strategy.

The WHAT: The WHAT is the tangible product or service you’re offering.?I would always frame these in the context of being vehicles to deliver the core value. They are not important per se but only as value drivers. Any future products can then be added if they deliver the value better or more but not if they deviate from delivering the defined value.

These three all come together logically and outline the communication, the story. you need to communicate:

The communication needs to be made relevant for all departments and teams and even individuals. What does it mean for me? I work in finance – why do I need to change anything? What will I do differently tomorrow? Will I even have a job tomorrow? It all boils down to that any change is intimately reflected upon as a negative event. You need three positive points for every negative one to create an equilibrium with individual staff members. Insecurity is dangerous.?I, the individual, need to understand how I fit in and add value. If I don’t come to work tomorrow – how will that affect the total machinery of delivering the Core Value??

Even during the stone age, leaders became leaders because of their ability to provide direction and security, both equally important. Remove the security and people will leave. Thus, intense communication on the why and how in particular, made relevant to a department or even individual level, is crucial.?

And remember that the?number one error with communication is the belief it has happened. You will need to repeat, clarify, check, and repeat again until you are sick of it. In a dialogue rather than a monologue. There’s a reason why schoolteachers and commanding officers in the armed forces always ask questions to everyone after they’ve given an order or information. It is to make sure the information has been understood and specifically, understood as intended. Communicate and check that the recipient(s) understood it the way you meant for it to be understood. Over and over again. You cannot over-communicate; you can however communicate too little.?

Thence, importantly, the ones you have had your communication with, needs to do the same with their respective teams. Cascading. Cascading is important in larger organizations where the mere number of employees makes it very hard to perform a dialogue between top management and all staff. A team larger than ten members will not be effective or aligned. This is how it has been since the dawn of homo sapiens; groups have formed that can be led by one person and they have invariably never been larger than approximately ten people. Larger teams must be split up to preserve efficiency and two-way communications. Thus, the need for cascading in larger organizations. A CEO can inform over email or the intranet to everyone in the company, but it won’t be a dialogue. It won’t be communication but information.?

As important as cascading is, equally important is the reverse, to allow communication to be visible to the originator. Leaders check that the information has been understood the way it was intended to be understood. And they ask questions to validate this understanding and, if needed, clarify and re-check. The information recipients may also have questions. These usually concern seeking clarifications of the information or seeking better understanding of the rationale behind any decisions. Obviously, the more work that goes into any communication package and the more crisp and clear it is, with good rationales (the Why), the better it will be received and understood. However, you must secure a working channel to, so to speak reverse-cascade the information, meaning ensuring that the comments and questions from the organizations also reach the origin of the information. Even if the questions were answered satisfactory already, the questions (and answers) should always be relayed to the information origin. This will help to clarify something that obviously was not clear enough from the start, also to other teams that may have the same question or have concluded differently than intended. Communicate, Check, Clarify, Check again.

Then, there’s the world outside of your company, the customers, the analysts, the owners, the key opinion leaders, the influencers, the end users, the subcontractors, the distributors, and so forth. You will want them to see the company in the light of its Core Value, and its value propositions. Volvo will want anyone that regards their family’s safety to choose a Volvo car over any other brand. They also will want other companies to approach them with new safety innovations they can incorporate. Tesla wants all that think sustainable energy is the most important subject to choose their cars. BMW wants all those that think of driving as fun and exciting – the ultimate driving machine – to choose their vehicles. In essence, this would be called corporate brand communication.?

Internally and externally, the company should be aligned around one Core Value and that needs to be evident in operational evidence, communication, HR policies, incentive programs and everything else within the company’s sphere of influence.

#5 Refining Strategy

Defining your Core Value and developing your corresponding Strategy takes a bit of time and constitutes focused and hard work. However, once done, you shouldn’t need to plan for the next strategy work sessions in another two to three years. Instead, I propose that you revisit your strategy, how efficiently you deliver your Core Value and how accurate the target group description is and their needs, at least every quarter, preferably every month.?

Behaviors change, and external factors (raw material availability and prices, competitors, inflation, regulations, even wars which remove some markets) change and play into the complete picture, so you need to stay abreast of what is going on and analyze how those changes affect you.

Sudden tax increases or inflation could bring down consumer purchasing power and you need to see if there are ways to mitigate this loss of revenues. The more value you provide that would be very hard to obtain elsewhere, the lesser the impact of such changes.?

So, monthly or every quarter, look at the numbers and see if you seem to be on the right track. Have at least one person constantly looking at global trends and a system to continuously measure customer experience and employee experience. Combine this with recurring interviews with your most important customers to make sure the pain-points and needs you address are the same and commands the same priority. The world is constantly evolving, and we are not building Soviet five-year plans that remain the same regardless of what goes on around us.?

There will be times when you need to act swiftly. Those are the times you mostly need to have the ability to keep the main mission in focus and not allow the plan or strategy, the path to reach the objective, to become the important part.?

A couple of years ago, I was responsible for launching a new innovative medical device. The launch was scheduled for April the following year. All activities were on track. One morning though, in early September, 7-8 months before the scheduled launch date, I was met in the office by utter chaos. As part of the launch plan, we had to demonstrate the device already now, for several key opinion leaders. Those that lived far away in the world could access these training and demonstration sessions online, on a secure web site where those physicians could log on. That September morning, it had been discovered that the website was anything but locked and secure. It was fully open to anyone that could find it. Also, it had shown that most visitors had come from the vicinity of one of our fiercest competitors. Until then, we had kept a very tight control of all information. We wanted this to come as a surprise to both customers and certainly competitors.?

Now, my staff told me, the competitors reps would start sawing seeds of doubt whether our therapy was safe, reliable and anything else that would make customers doubt its effectiveness. We were, to most present, doomed before we had started.?

I remembered from my military service to always have the objective, the main mission, in focus. If the map to guide us to a certain place was inaccurate, if the enemy did an unexpected move, or if someone in the team became ill or hurt, we did not renegotiate the objective – we found a different way to reach it. Same in business. If competitors launch an unexpected product or lower their prices substantially, if new inventions make your products obsolete, if your main customer or vendor goes out of business – keep your eyes on the objective (to deliver the Core Value) and adjust your strategy accordingly.?

Here, I started to think and discuss with my leadership team what we could do differently while remaining on course to launch our device with the same effect as we had previously intended. We couldn’t start selling and shipping it earlier, as we had supply chain and production moving ahead on their own schedule that couldn’t really be changed. Instead, we decided to launch it without having the product. In less than week, we had a new launch plan (strategy) where we immediately started by communicating heavily on the identified problem (unmet need). From there, we communicated and discussed possible therapy solutions and, in the end, in January, we started communicating about our specific solution to the issue and performed also physical launch events at congresses.?

Instead of letting competitors saw seeds of doubt, we managed to swiftly control the narrative and out-communicate competition. We owned the information. We raised the awareness of the issue, then discussed various solutions (current ones being a bit inadequate), and finally presented our solution (completely resonating with the issue).?

We launched it, several months before we could start selling, and simply told customers that it would start selling in April, as we already had planned. Doing so, we created anticipation. Customers now asked our reps if they couldn’t purchase a bit earlier than the official sales start. The launch became more successful than forecasted and the approach became a model for future product launches. We kept the main mission, to launch the product successfully, in focus, without allowing external circumstances affect more than the path to reach the main objective.

Most changes in your environment are continuous, and usually in small increments. Therefore, it is important to always stay informed about market and customer changes so that you will be able to act in time and not be on the defensive. There are, however, Black Swan events that, by their definition, cannot be predicted and their impact may be extreme. I would urge you to read?The Black Swan: The Impact of the Highly Improbable?by Nassim Taleb. A truly mind-boggling book that is highly relevant and interesting. If you don’t have the time to read it, just remember that resilience is the only vaccine that could possibly mitigate such events. You didn’t predict the?Covid-19 pandemic, did you? Or?Russia’s invasion of Ukraine?and the impact that would have on energy and food supplies? Or a?freight ship blocking the Suez Canal, causing disruption in delivering food, fuel and manufactured goods to Europe? But you can predict that something, yet unidentified, will happen and build some resilience into your organization (pretty much like always having a battery-operated radio at home, in cases of a power outage).

Back to basics. I repeat – The world is constantly evolving. It is certainly a?VUCA?world we live in. We must evolve with it to stay relevant. Hence, stay constantly vigorous and, above all – curious, about what goes on in the world, in your industry, in your own company, in other industries, and certainly with your customers. Analyze what effect those insights will have, their likelihood and impact, and thence adjust your strategy, mission and vision. Work with the various most likely scenarios, plan and prepare for each one. What will we do if XX happens? If you stay on course to deliver your Core Value to your customers, optimize your value chain to deliver that value and continuously revisit your strategy as well as do your scenario planning, you create a purpose-driven organization with an agile mindset, delivering recognized customer value and reap the profits.

Thank you

This is a long article.?Henry David Thoreau?said,?“Not that the story need be long, but it will take a long while to make it short.”?I did not exercise enough brevity in my writing. This, I need to learn. For those that made it to the end – a Big Thank You!?

I like to throw ideas at people and see what responses I receive. Sometimes they point out something that I simply didn’t see, possibly disproving my conclusions. Sometimes we disagree on parts and the discussion that follows leads to a much better result. Very rarely do people agree completely and when they do, I usually believe they haven’t really tried to understand or weren’t interested enough. So, whatever thoughts, questions, or comments you may have – I welcome them! They will help me and perhaps you too.?

Please share and discuss!?

Kind regards,

Pontus