How to Think Like a Strategist

The „Playing to Win” Framework and Other Tools

Message as a Six Word Story + Motto(Instead of an Executive Summary)

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Great Products Require Great Strategy Choices

http://www.sixwordmemoirs.com/

Iwapo unataka kwenda haraka, nenda peke yako.If you want to go quickly, go alone.

Iwapo mnataka kwenda mbali, nendeni pamoja.If you want to go far, go together.

Allagedly African proverb, transtated back from English to Swahili

Who Can Think Strategically?

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You will understand the question better later on:

Why You Should Think Stratigically#organization, #leadership_style, #creative_collaboration

Playing to Win 4https://vimeo.com/109611584

SpotifyTED + BCG:

How should a CEO lead?

https://labs.spotify.com/2014/03/27/spotify-engineering-culture-part-1/

The Design Principle Requires Strategy Choices

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How to Reach the Centre from Almost There:• Tweak the business model*• Look for better technical solution• Enhance design

https://www.ideo.com/about/

Competition Risk Scarce

resources

Choose Where to Play How to Win

Based ontested hypotheses

* http://www.businessmodelgeneration.com/

Disclaimer #1: Nothing in this Presentation was Invented by Me

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Disclaimer #2: Strategy Frameworks Go Only So Far as The 2 Circles

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How to draw an owl (Seth Godin)The problem with most business and leadership advice is that it's a little like this.The two circles aren't the point. Getting the two circles right is a good idea, but lots of people manage that part. No, the difficult part is learning to see what an owl looks like. Drawing an owl involves thousands of small decisions, each based on the answer to just one question, "what does the owl look like?" If you can't see it (in your mind, not with your eyes), you can't draw it.There are hundreds of thousands of bullet points and rules of thumb about how to lead people, how to start and run a company, how to market, how to sell and how to do work that matters. Most of them involve drawing two circles. (HT to Stefano for the owl).Before any of these step by step approaches work, it helps a lot to learn to see. When someone does this job well, what does it look like? When you've created a relationship that works, what does it feel like?Incubator programs and coaching work their best not when they teach people which circles to draw, but when they engage in interactive learning after you've gone ahead and drawn your circle. The iterative process of drawing and erasing and drawing some more is how we learn to see the world.

Disclaimer #3: No Checklist, a ToolboxVersion #1 for Marketing people

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You don’t have to use all these tools all the time.Use them like tools in IDEOs Design Thinking Toolkit:

https://www.ideo.com/work/human-centered-design-toolkit/

Disclaimer #3: No Checklist, a ToolboxVersion #2 for IT people

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You don’t have to use all these tools all the time.Use them like importable modules are used in programming languages, eg.:

Python’s basic toolset doesn’t contain the value of pi = 3.14...

From the „math” module you can import pi with limited precision

If you need more digits (say 1000), you can use a module designed for arbitrary precision floating point calculations

The 3 Levels of Thinking Strategically

Strategy in General

Business Strategy

Product Strategy

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Strategy in General

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An Emotionally Inspiring -- and Logically Somewhat Vague Approach

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https://www.ted.com/talks/simon_sinek_how_great_leaders_inspire_action

What is this approach very good for? What is it not so good for?(Hints: #leadership, #inspire_action, #feelings)

Neocortex WHAT Rational, analytical thinking Language [ Kahneman: slow thinking System 2]

Limbic brain WHY and HOW Feelings ‒ trust, loyalty Behavior No capacity for language [ Kahneman: fast thinking System 1]

See also: Why-How Laddering

https://dschool.stanford.edu/wp-content/themes/dschool/method-cards/why-how-laddering.pdf

Related: 5 Things You Didn't Know About Apple's '1984' Super Bowl Ad (Like How It Almost Didn't Air)

Strategy is a Stage of Thinking & Learning

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Source of claritiy: one border crossing at each step Optional step #0: all logical possibilities for Do next

http://www.amazon.com/Getting-It-Done-Youre-Charge/dp/0887309585

The 4 Stages of the Thinking Process

Learning = Thinking + Doing

Sometimes we start here – which can be OK, if we proceed to the next cycle.

If you start here, you need to reverse engineer you strategy = test its underlying hypotheses

Problem solving in „Getting to Yes”

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Data

Diagnosis Direction

Do next

Future

Rea

l Wor

ldTh

eory

Now

http://www.williamury.com/books/getting-to-yes/

Problem solving in „Getting to Yes”

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Data

Diagnosis Direction

Do next

Future

Rea

l Wor

ldTh

eory

Now

Learning = thinking + doing + thinking + …

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http://www.amazon.com/Getting-It-Done-Youre-Charge/dp/0887309585

A viable strategy requires correct diagnosis:a simplistic textbook example

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Diagnosis => Direction = ?

Data: the extent of fire damage ~ # of firefighters on the scene

Fire damage vs firefighters – diagnosis Aor B?

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Data

Diagnosis Direction

Do next

Future

Rea

l Wor

ldTh

eory

Fire damage ~ # of FFs on the scene

Now Diagnosis A: # of FFs =>

severity of damage Diagnosis B: severity of fire

=> # of FFs & damage

Direction A: send less FFs Direction B: BAU

Do next A: next time no FFs

Do next B: BAU

Fire damage vs firefighters – diagnosis Aor B?

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Data

Diagnosis Direction

Do next

Future

Rea

l Wor

ldTh

eory

Fire damage ~ # of FFs on the scene

Now Diagnosis A: # of FFs =>

severity of damage Diagnosis B: severity of fire

=> # of FFs & damage

Direction A: send less FFs Direction B: BAU

Do next A: next time no FFs

Do next B: BAU

Food for Thought

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1) Compare the 4D matrix with the Lean Cycle framework:

2) What dimension would make sense to add (in addition to Time = now vs future, Reality = real world vs theory) when we wnat to think about strategy?

Business Strategy

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Steve Jobs Discussing „Where to Play” and „How to Win” with Professional Workstations

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https://www.youtube.com/watch?v=HNfRgSlhIW0

A Specific Business Strategy Framework: Direction Playing to Win

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Where to Play and How to Win

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Choices also indicate options not to be chosen Consistent horizontally

and vertically Based on tested

hypotheses Embrace inherent risk of

business

http://www.amazon.com/Playing-Win-Strategy-Really-Works-ebook/dp/B00AJVJ1HI/

The „Heart” of Strategy

Where to Play and How to Win

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http://www.amazon.com/Playing-Win-Strategy-Really-Works-ebook/dp/B00AJVJ1HI/

The „Heart” of StrategySometimes overlooked. Famous mgmt systems include eg. :

P&G’s codified Brand Building Framework

Toyota Production System

Apple’s DRI system

Holacracy

Revenues Costs

Message to employees, investors,competition

Products + Infrastructure + Mktg / sales machine + Analytics + ...

Leadership style + Strategy creation + Collaboration + KPIs + Decision making + Talent mgmt + Incentives + ...

A Canvas for Strategy Workshops

Playing to Win 26http://matthewemay.com/introducing-the-play-to-win-strategy-canvas-2-0/

The Big Lie of Strategic Planning #1

[Strategic planning] may be an excellent way to cope with fear of the unknown, but fear and discomfort are an essential part of strategy making. In fact, if you are entirely comfortable with your strategy, there’s a strong chance it isn’t very good. You’re probably stuck in one or more of the traps I’ll discuss in this article. You need to be uncomfortable and apprehensive: True strategy is about placing bets and making hard choices. The objective is not to eliminate risk but to increase the odds of success.

Comfort Trap 1: Strategic Planning

The subtle slide from strategy to planning occurs because planning is a thoroughly doable and comfortable exercise.

Comfort Trap 2: Cost-Based Thinking

[T]he predictability of costs is fundamentally different from the predictability of revenue. Planning can’t and won’t make revenue magically appear, and the effort you spend creating revenue plans is a distraction from the strategist’s much harder job: finding ways to acquire and keep customers.

Comfort Trap 3: Self-Referential Strategy Frameworks

[The resource-based view (RBV) of the firm] holds that the key to a firm’s competitive advantage is the possession of valuable, rare, inimitable, and non-substitutable capabilities. [...] The problem, of course, is that capabilities themselves don’t compel a customer to buy. Only those that produce a superior value equation for a particular set of customers can do that.

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https://hbr.org/2014/01/the-big-lie-of-strategic-planning

The Big Lie of Strategic Planning #2

Escaping the Traps

Rule 1: Keep the strategy statement simple.

Two choices determine success: the where-to-play decision (which specific customers to target) and the how-to-win decision (how to create a compelling value proposition for those customers).

Rule 2: Recognize that strategy is not about perfection.

[G]iven that strategy is primarily about revenue rather than cost, perfection is an impossible standard. At its very best, therefore, strategy shortens the odds of a company’s bets.

Rule 3: Make the logic explicit.

The only sure way to improve the hit rate of your strategic choices is to test the logic of your thinking: For your choices to make sense, what do you need to believe about customers, about the evolution of your industry, about competition, about your capabilities? It is critical to write down the answers to those questions, because the human mind naturally rewrites history and will declare the world to have unfolded largely as was planned rather than recall how strategic bets were actually made and why. If the logic is recorded and then compared to real events, managers will be able to see quickly when and how the strategy is not producing the desired outcome and will be able to make necessary adjustments.

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https://hbr.org/2014/01/the-big-lie-of-strategic-planning

6 of the Most Common Strategy Traps

• The do-it-all strategy: failing to make choices, and making everything a priority. Remember, strategy is choice.

• The Don Quixote strategy: attacking competitive “walled cities” or taking on the strongest competitor first, head-to-head. Remember, where to play is your choice. Pick somewhere you can have a chance to win.

• The Waterloo strategy: starting wars on multiple fronts with multiple competitors at the same time. No company can do everything well. If you try to do so, you will do everything weakly.

• The something-for-everyone strategy: attempting to capture all consumer or channel or geographic or category segments at once. Remember, to create real value, you have to choose to serve some constituents really well and not worry about the others.

• The dreams-that-never-come-true strategy: developing high-level aspirations and mission statements that never get translated into concrete where-to-play and how-to-win choices, core capabilities, and management systems. Remember that aspirations are not strategy. Strategy is the answer to all five questions in the choice cascade.

• The program-of-the-month strategy: settling for generic industry strategies, in which all competitors are chasing the same customers, geographies, and segments in the same way. The choice cascade and activity system that supports these choices should be distinctive. The more your choices look like those of your competitors, the less likely you will ever win.

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Where to Play: Citizens of 2 Worlds Extremistan vs Mediocristan

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MODERATE EXTREME

How to achieve Win – Win?

https://www.facebook.com/events/927274840643068/http://magyarnarancs.hu/egotripp/maga-itt-a-tanctanar-81841

riskSmart to take

Telcos vs

Travels Inside MediocristanThe Strange Country of Extremistan

Zappos Founder about Poker Learnings

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[Where to Play]

Table selection is the most important decision you can make. It's okay to switch tables if you discover it's too hard to win at your table. If there are too many competitors (some irrational or inexperienced), even if

you're the best it's a lot harder to win. Don't play games that you don't understand, even if you see lots of other people

making money from them. Figure out the game when the stakes aren't high.

[How to Win]

Act weak when strong, act strong when weak. Know when to bluff. Remember that it's a long-term game. You will win or lose individual hands or

sessions, but it's what happens in the long term that matters. You need to adjust your style of play throughout the night as the dynamics of

the game change. Be flexible. Differentiate yourself. Do the opposite of what the rest of the table is doing. Hope is not a good plan. Don't let yourself go "on tilt." It's much more cost-effective to take a break, walk

around, or leave the game for the night.

http://deliveringhappiness.com/what-poker-taught-tony-hsieh-about-business/

Your Strategy Needs a Stretegy

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The exploration versus exploitation trade-off is at the heart of all business strategy.

https://www.bcgperspectives.com/yourstrategyneedsastrategy

Where to Play and How to Win, an Alternate Approach: Stakeholder Analysis

Identify which stakeholders you depend on for success

• Customers

• Supplyers

• Employees

• Shareholders

• Etc

Recognize what you want from your stakeholders

• Sales and revenue growth from customers

• Productivity and innovation from employees

• Quality goods and services at the right price from suppliers

Recognize what your stakeholders want from you =

strategic factors (example: what ship operators want

from a port)

• Port capability (suitability for a ship’s size and freight)

• Freight availability (to pick up on the return leg)

• Congestion (speed of unloading and turnaround time in the port)

• Location (which affects “steaming time,” or time between destinations)

• Price (port charges for docking and remaining moored)

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https://hbr.org/2014/11/a-list-of-goals-is-not-a-strategy

Product Strategy

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Is Your Product a „Vitamin” or „Painkiller?”

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http://www.entrepreneur.com/article/230736

Is Your Product a „Vitamin” or „Painkiller?”

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http://www.entrepreneur.com/article/230736

PRO: Pains are usually common and easy to identify

CON: once pain has gone, noroom for further value creation

CON: Imagination needed to comprehend benefits

PRO: infinite room for value creation

Usually Both, in Varying Degree

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http://www.entrepreneur.com/article/230736

Also looks good Also gives peace of mind

Product = Combination of Vitamin and Painkiller Features

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http://blog.strategyzer.com/posts/2015/2/19/5-common-mistakes-to-avoid-when-using-the-value-proposition-canvas

Outside of our control

Common mistake: Creating your Customer Profile through the lens of your value proposition

Within our control

Different Kinds of Benefits

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Painkillers

Vitamins

How to Win = How to Change Customer Behavior More Successfully than Competition

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http://www.behaviormodel.org/

How to Change Customer Behavior More Successfully than Competition

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http://www.behaviormodel.org/

Challenge SeekersHigh

Extreme

Sales Sweet Spot

Low Extreme

Comfort Zone Seekers

How to Change Customer Behavior More Successfully than Competition

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http://www.behaviormodel.org/

???

??? Trigger = ???

How to Change Customer Behavior More Successfully than Competition

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http://www.behaviormodel.org/

Brand ?Value Prop?Content?

CEX ?Education?

Trigger = MarComm?

Discount ? -

How to Change Customer Behavior More Successfully than Competition

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http://www.behaviormodel.org/

Brand ?Value Prop?Content?

CEX ?Education?

Trigger = MarComm?

Discount ? -BJ Fogg:

ROI(Changing Ability) >> ROI(Changing Motivation)

You should make it easy for customers to do WHAT THEY ALREADY WANT TO DO

Nir Eyal (Hooked)

External vs Internal Triggers

Hook your users via

INTERNAL TRIGGERS, VARIABLE REWARD and INVESTMENT

How to Change Customer Behavior More Successfully than Competition

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http://www.behaviormodel.org/

6 Simplicity Factors:

Time

Money

Physical Effort

Brain Cycles

Social Deviance

Non-routine

Core Motivators

+ Pleasure / - Pain

+ Hope / - Fear

+ Social Acceptance / - Rejection

See Job-to-be-done, Purpose Brands by Clayton Christensen

http://www.wsj.com/articles/SB113323520565808847

The Hooked Model to Implement Internal Triggers, Reward and Investment

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http://www.nirandfar.com/hooked

VITAMIN PAINKILLER

Product vs Brand

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Brand image is not always under your control

Deep Dive Material

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3 vs 4 Step Thinking / Learning Cycle

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http://theleanstartup.com/principles

3 vs 4 Step Thinking / Learning Cycle

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Diagnosis Direction

http://theleanstartup.com/principles

Do Next

Why-How Laddering

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https://dschool.stanford.edu/wp-content/themes/dschool/method-cards/why-how-laddering.pdf

Mediocristan vs Extemistan

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Mediocristan vs Extremistan

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„A strategy that only works if competitors continue to do exactly what they are already doing is a dangerous strategy indeed.”

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Playing to Win: Making Stratey Choices

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https://hbr.org/2012/09/bringing-science-to-the-art-of-strategy

Questions for Reverse-Engineering (Step #3)

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Reverse Engineering Example from P&G

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The First Question to Ask of Any Strategy

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So do a little test of your strategy before committing to it. Ask:

Is the opposite stupid on its face? Have most of my competitors made the same choice as

me?

If the answers are “yes,” you have more work to do to have a smart strategy rather than just a non-stupid one.

https://hbr.org/2015/05/the-first-question-to-ask-of-any-strategy

Example #1: Procter & Gamble

What is our winning aspiration?• For Oil of Olay, it was to become a leading skin care brand again.

Where will we play?• The Oil of Olay brand stayed with its mass market retailers (e.g., Target and Wal-Mart) rather

than the prestige stores (e.g., Macy’s). But it positioned itself as a "masstige" product — higher end (and higher priced) than the traditional mass market beauty product.

How will we win? • Among Oil of Olay’s winning strategies was producing a better anti-aging skin care product — a

product at the right price (e.g., not too low) that would entice the prestige customer base.

What capabilities must be in place?• Oil of Olay, for example, was able to leverage P&G’s strengths in consumer understanding and

brand building.

What management systems are required?• Oil of Olay was also able to leverage P&G’s systems as well as its channel and partner systems.

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Example #2: Vodafone Group

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How to Win: Worry-Free data usage with Red plans Monthly fee = stable revenue stream, fixed

customers pay typically monthly fee Broad coverage, a reliable connection,

increasing speeds and data capacity, content, payment services

Capabilities: Project Spring: network development Service Design International brand India: more small-scale shops than

competitors

Mgmt System: The Vodafone Way, Code of Conduct

http://www.vodafone.com/content/annualreport/annualreport15/assets/pdf/full_annual_report_2015.pdf

Strategy Under Uncertainty: Strategic Postures

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https://hbr.org/1997/11/strategy-under-uncertainty

Players and strategies in the TIME industry

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Strategic Choices in Converging Industries TIME = Telco, Info tech, Media, Entertainment

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The Strategy Map (from Business Model Generation)

63Playing to Win

Product vs Market Strategy for Telcos

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https://www.tmforum.org/tm-forum-frameworx/browse-clickable-model/

https://workflowy.com/s/2sJTXT54lA

Product vs Market Strategy for Telcos

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Decision Commit

Product vs Market Strategy for Telcos

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Product & Offer Portfolio Planning processes develop strategies for products at the portfolio level. The decision is made as to which product types the enterprise wants or needs to offer, and how it plans to enter or grow in these sectors. This will be done based on multiple inputs: including Enterprise Strategies, Market Research and Market Analysis.

Business (as opposed to Technical) Strategy Domains

Strategic & Enterprise Planning

•The Strategic & Enterprise Planning process grouping focuses on the processes required to develop the strategies and plans for the service provider enterprise.

•This process grouping includes the discipline of Strategic Planning that determines the business and focus of the enterprise, including which markets the enterprise will address, what financial requirements must be met, what acquisitions may enhance the enterprise's financial or market position, etc.

•Enterprise Planning develops and coordinates the overall plan for the business working with all key units of the enterprise. These processes drive the mission and vision of the enterprise.

Market Strategy & Policy

•Market Strategy & Policy processes enable the development of a strategic view of an enterprise’s existing and desired market-place, activities and aims.

•Market segmentation and analysis is performed, to determine an enterprise’s target and addressable markets, along with the development of marketing strategies for each market segment or set of target customers.

•The decision is made as to which markets the enterprise wants or needs to be in, and how it plans to enter or grow in these markets and market segments.

•This will be achieved through multiple inputs: including Enterprise Strategies, Market Research, Market Analysis.

Product & Offer Portfolio Planning

•Product & Offer Portfolio Planning processes develop strategies for products at the portfolio level.

•The decision is made as to which product types the enterprise wants or needs to offer, and how it plans to enter or grow in these sectors.

•This will be done based on multiple inputs: including Enterprise Strategies, Market Research and Market Analysis

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