Jim Collins takeaways, Strategy mistakes, Hybrid Retail Customer Journey & DAO
21st November 2021 Evolution Partners Newsletter
“Building a visionary company requires 1% vision and 99% alignment.” – Jim Collins
Hope you’re Thriving!
I’ve had a great week, with three workshop strategic planning days and an event with Jim Collins to review his Flywheel concept.
Let’s jump into it!
Top 5 Jim Collins takeaways
I’ve been following Jim’s work and using his tools for twenty years, and I’ve seen him speak many times. This week, he mainly talked about the flywheel concept, and he began saying that most flywheels he gets to see aren’t flywheels at all but simply a series of business actions arranged into a circle. There is no logic to the building of momentum.
Here are five other takeaways from Jim Collins this week.
- Companies disrupt the world by turning their flywheel, not by blowing up their flywheel.
- The point of a spinning flywheel is not to siphon money off to make a bunch of people rich. The point is to make it go faster and further, and that actualises your purpose even further.
- A great flywheel without great people does not turn.
- Alignment follows from results. As you begin to gain results, people align behind it. The right people want to be part of something that works.
- You construct a culture by making a series of really great people decisions.
And that last point hit home for me because the decision that many firms are failing at is a great onboarding process. Or in other words, onboarding is the key to a great culture.
Michael Porters 7 common strategy mistakes
Another decision that many firms fail at is how to avoid making a mistake with their strategy. A strategy isn’t simply setting a goal. Instead, a strategy demonstrates how you will create a unique and valuable position in the market that is different to your competition.
This week on the podcast, Kevin and I discussed the seven common strategy mistakes from Michael Porter and how we’ve seen companies make these mistakes. Then we discuss how you can avoid making these mistakes. It’s a great episode that is highly valuable for those looking to build a strategy.
In the podcast, we talk about the new book from Joan Magretta, which contains the strategy mistakes called What is Strategy?: An Illustrated Guide to Michael Porter. It’s an easy to read, illustrated guide that any executive can read in around an hour. What I loved about the book is just how simply the author has explained the concepts.
Here’s the link to the podcast episode The seven common strategy mistakes from Michael Porter.
You may also enjoy the previous episode, which was a prelude to this week’s episode, 83 Why strategy should focus on producing more profit – not market share.
Here’s a description of the 7 Common Strategy mistakes
- COMPETING TO BE BEST
Going down the same path as everybody else and thinking that somehow you can achieve better results.
- SUBSTITUTING EXECUTION FOR STRATEGY
A special case of competing to be best.
It’s a tough race to win with companies benchmarking each other and “experts” promoting the latest best practices.
You absolutely cannot afford bad execution, but even good execution is not a replacement for strategy.
- CONFUSING MARKETING WITH STRATEGY
Focusing on customers and their needs but missing the need for a tailored value chain.
- CHASING THE WRONG GOALS
Making good use of capital is your job. Not making current shareholders happy.
Financial analysts & the media encourage zero-sum competition by pushing everyone to look like the current market favourite.
- OVERESTIMATING STRENGTHS
A real strength has to be something the company can do better than any of its rivals.
And “better” because you’ve chosen a different configuration of activities or technologies.
- GETTING THE DEFINITION OF THE BUSINESS WRONG
Often teams define industries too broadly.
An industry shares the same buyers, same suppliers, same entry barriers, same substitutes and the same rivalry.
- GETTING THE GEOGRAPHIC SCOPE WRONG
Usually defining industries as global when they are national or regional.
Use the value chain to define business scope. Wherever you require a largely separate value chain to compete, you have crossed a defining boundary.
Hybrid Retail Customer Journey
Ticking at least 3 of the boxes from the strategy mistakes above is retailers who believe there is a competition for online versus bricks and mortar. Rather than looking at competitors, retailers should look at the customer need. And this week, I found an interesting article that reinforces the importance of the customer need relative to the retail customer experience.
Here are a few highlights from the article’s report
– 74% of consumers expect a hybrid customer journey (interacting with the brand both online and in-store)
– Less than 18% of US consumers prefer to research and buy products exclusively online
– 66% of consumers are more likely to purchase something online if they can return it to a local store
As Nick Hedges, who helped author the report, said, “Our report shows that as economies re-open, consumers are much less likely to distinguish between online and offline, and instead prefer a customer journey that blends physical and digital experiences in a non-linear fashion,”
Read more here 74% of Consumers Expect A Hybrid Customer Journey
DAO bids for the US constitution
This week Kenneth Griffin, founder and CEO of multinational hedge fund Citadel, bought a rare first copy of the US constitution for USD 43.2m, the highest amount ever paid for a book or document. Outbid at the Sotheby’s auction was a bidder representing 17,437 unknown, unconnected individuals who had crowdfunded the most amount of money ever at USD 47m. And they raised that within 72 hours. They intended to loan the document to museums, which ironically is precisely what Griffin is planning to do. The point here is that there was no leadership, no centralised leadership; it was a Decentralised Autonomous Organisation or DAO.
What’s interesting about this story beyond the obvious is that the US news network ABC is running it in the entertainment section of their website, alongside an article stating that ‘Adele has launched her 4th album’.
Thinking that web3 and DAO’s are entertainment could indeed prove to be a strategy mistake for ABC.
Read the ABC article here Rare first printing of US Constitution sells for record $43M
This week on The Growth Whisperers podcast
Are you confident that your planning won’t end up one of the dreaded strategy mistakes?
This week Kevin and Brad discuss the Seven Strategy Mistakes from Michael Porter and how leadership teams regularly make these common strategy mistakes.
Michael Porter is one of the greatest strategy thinkers from the last century and has developed a simple checklist we can all use to ensure our strategy won’t be a mistake.
Listen to The Growth Whisperers
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