strategy

Is Execution Where Good Strategies Go to Die?

Execution is an odd word. On the one hand, it means “the carrying out of a plan or course of action.” On the other, it means, “the carrying out of a death sentence.” When leaders “execute a strategy,” they usually mean the former—putting an idea into action. But those efforts all too often end up meaning the latter. Execution is often where strategies go to die.

So what determines whether execution brings life or death to your strategy? It’s not what you think. It’s howyou think. The mental models that inform strategy are usually different from those that determine implementation. To close the strategy-execution gap, leaders have to close several other, smaller gaps.

First, the thinking styles of the people who create strategy are often different from those of the people who implement it. In my work analyzing the thinking styles of leaders in organizations, I’ve found that strategy is usually developed by people who have a big-picture orientation, while execution is often done by those with a detail orientation. Furthermore, strategy is usually done by people who are focused on ideas and connections, while implementation is done by those who focus on process and action.

This difference in thinking styles creates a problem when strategy turns into execution. Those who create the strategy are often thinking about the destination, particularly the opportunity and intended outcomes. Meanwhile, those responsible for implementation are thinking about the realities of what it will take to get there. When the strategy is presented, they naturally begin to ask questions about risks and roadblocks—a natural consequence of having a detail-oriented thinking style. But to strategists focused on the big picture, this seems like resistance: “Don’t they see the brilliance of the strategy?” So they get defensive and begin working on overcoming the “resistance.” In turn, this makes the implementers feel suspicious: “I was just trying to understand it better. Why are they being so defensive?”

Right from the start, the relationship is adversarial rather than collaborative, not because of a problem with the strategy but because of a difference in thinking styles. The solution is for strategists to expect different kinds of questions from the implementers than from their fellow strategists. Understand that this can just as easily be a sign of engagement as a sign of opposition. Realize that it takes all kinds of thinking styles to turn a vision into a reality: big-picture and detail, ideas and actions, processes and relationships. If you want to change other people’s behaviors, you have to shift their thinking. You also may have to engage in a bit of unlearning yourself.

The second gap is a result of the connection between participation and ownership. In a phenomenon dubbed “the Ikea effect,” researchers found that people preferred things they helped make to things that were preassembled, even if their creations were of lower quality. What applies to furniture also applies to strategy. Often stakeholders are kept out of the strategy process out of concern that they will slow things down or compromise the quality of the outcome. But this is a shortsighted view. By involving stakeholders earlier, you give them a sense of ownership that speeds things up when it comes time for execution. Furthermore, the evidence suggests that diversity will actually improve the quality of the strategy. And it’s far more likely the strategy will stick to its flight plan, because those responsible for its execution will have a stake in defending it.

The third gap between strategy and execution is in the narrative around the strategy. The strategy itself may be sound, but what matters for execution isn’t what is said but what is heard. Strategy is inherently about creating something new or getting somewhere new. But the way humans are wired, it’s difficult to process something that is completely unrelated to what we already know. A good narrative helps people move from the past to the future. Steve Jobs’s genius in announcing the iPhone was explaining it as three devices: a touchscreen iPod, a new kind of phone, and an internet communicator. He built a conceptual “horseless carriage”—a bridge between the old and the new.

The lack of narrative is particularly a problem in the relationship between sales and marketing. Too often, marketing puts out a new advertising campaign, a new value proposition, or new messaging for the sales team with the expectation that the sales teams will just start using the new language, almost as if they were changing the content on a web page. This behavior is a result of the underlying mental models of sales and marketing. Marketers see the world as campaigns, messages, channels, and audiences. Salespeople see the world as prospects and products, offers and opportunities. To a marketer, sales is a channel for reaching their audience. But salespeople wants to be treated as customers, not channels.

Here the “Ikea Effect” can be particularly helpful. Too often, salespeople aren’t involved in marketing conversations about messaging and sales enablement strategies. When I conduct workshops with marketing and leadership teams on the design of strategic narratives, I’m often asked, “Should we include the sales teams?” The question itself reveals the mental model at work. Inevitably, the sales leaders make vital contributions to the conversation. In addition, the deployment of the narrative into the field goes far more smoothly, both because the sales leaders have a sense of ownership and because the strategy is framed in a way the sales teams will best understand it.

The fourth gap between strategy and execution is in measurement and metrics. This, too, is a reflection of mental models. You only measure what you can see. And your mental models determine what is visible or invisible. I consistently see measurement as an afterthought in strategy development. The assumption is that financial measures like cost and revenue are sufficient metrics to measure progress. But that would be like a coach only tracking points on the scoreboard. You need metrics that tell you how well your game plan is being executed—metrics that all of your players can organize around. If you’re a basketball coach, those metrics might be focused on rebounds, turnovers, or assists. If you’re managing a new product launch, those metrics might be free trial sign-ups, preorders, or product reviews.

The mismatch between metrics and strategy is common in the digital transformation efforts of many companies. Their strategies are designed to create network efforts through platform-based business models or to leverage advanced technologies like AI or the internet of things. These companies expect the organization to execute exponentially, but their mental models—and therefore metrics—are still incremental. In the beginning of a disruptive innovation, the thing to measure is not ROI.

As an example, from the beginning Amazon was primarily concerned with the number of online reviews per product, the number of affiliates selling on the platform, and the number of Prime members joining the program. Meanwhile, other retailers were still focused on year-over-year same-store sales, treating their e-commerce operations as a “digital store.” Their mental model constrained their metrics, which in turn distorted their behavior.

Focus your metrics instead on learning and the creation of network effects. How many experiments are you able to run per week or even per day? How well are you connecting the various forms of capital across your business? How rapidly is your ecosystem growing? How easily can people share data across the enterprise? These are much better indicators of whether you are truly aligning strategy and execution for digital disruption.

Execution doesn’t have to be the place good strategies go to die. As you are developing your strategy, take into account the thinking styles and mental models of the people who will be responsible for its execution. Involve them to generate a sense of ownership and to tap into their collective wisdom. Craft a narrative that connects the past to the future. And design metrics that focus attention and motivate behavior around what will really make the strategy successful.


Originally appeared on Harvard Business Review. Reproduced with permission from the author.

How to Build a Strategic Narrative

It’s a common refrain in executive suites these days: “We need a new narrative.”

It’s not enough any more to say “we make widgets.” With changes happening so quickly from so many directions – competition, regulation, technology, talent, customer behavior – it’s easy for one’s story to become generic or outdated.

You want a story that inspires employees, excites partners, attracts customers, and engages influencers. A story that is concise but comprehensive. Specific but with room to grow. One that defines the company’s vision, communicates the strategy, and embodies the culture.

The natural step is to give the assignment to an agency. Most branding firms will come back with a tagline and positioning statement. Most advertising agencies with creative treatments and marketing campaigns. Most PR firms with messaging and communication plans. These are useful tactics but aren’t the kind of strategic narrative you are looking for.

A strategic narrative is a special kind of story. It says who you are as a company. Where you’ve been, where you are, and where you are going. How you believe value is created and what you value in relationships. It explains why you exist and what makes you unique.

This doesn’t come out of the usual competitive landscape, customer interviews, and whiteboard sessions. It takes a different approach and a shift in thinking led by the leadership team.

Human context

The first step is to understand the context of the narrative. Research shows that our brains think of companies not as objects but as people. Every time someone engages with your brand, they are asking you: “So tell me about your yourself.”

Consider the scenario of a job interview. You have the candidate’s resume, but what really matters can’t be put on paper. You want to know what inspires them, what they are like to work with, and whether they can be counted on. You want to get a sense for them as a person.

It may sound a bit strange at first, but the same is true for your company. The context of the narrative must be a human, not an institutional, relationship. People want to get a sense for your company as if it were a person. Human relationships require reciprocity and authenticity. The narrative should say who you are, not just what you do.

Shared purpose

The cornerstone of a strategic narrative is a shared purpose. This shared purpose is the outcome that you and your customer are working toward together. It’s more than a value proposition of what you deliver to them. Or a mission of what you do for the world. It’s the journey that you are on with them. By having a shared purpose, the relationship shifts from consumer to co-creator.

One function of the strategic narrative is to explain how the purpose will be fulfilled. As an example, between 2008 and 2015, IBM organized its marketing under the shared purpose of “Building a Smarter Planet.” In a series of papers and talks, then CEO Sam Palmisano laid out a detailed explanation of how things were becoming more “instrumented, interconnected, and intelligent.” By infusing intelligence into systems and processes, the world would become smarter.

The second function of the narrative is to explain the roles necessary to fulfill the shared purpose. By analogy, consider a potluck meal in which everyone is responsible for bringing a different dish. I bring the entrée, you bring the salad, and someone else the dessert. Similarly, the shared purpose is the potluck and the narrative explains who brings what to the party.

As an example, Nike has a mission “to bring inspiration and innovation to every athlete in the world.” What makes this a shared purpose is that Nike actively encourages people to inspire each other. Nike’s “Just Do It” slogan is a key part of its narrative. In addition to being part of the inspiration in the mission, it also helps define the respective roles. In effect, Nike is saying “We’ll bring the shoes, the equipment and the clothing; you bring your drive, your discipline and your competitive spirit.” It’s a narrative that goes far beyond the products Nike sells.

Brand DNA

People don’t fundamentally change, and neither do companies. When they are founded, a kind of DNA is created that persists for the life of the company. A strategic narrative must align with this brand DNA or it will be perceived as inauthentic.

It’s not a coincidence that the mantra of IBM’s founder, Tom Watson, was THINK; IBM’s last marketing strategy was based on the idea of a Smarter Planet; and its current strategy is based on the idea of Cognitive Business. Thinking is the DNA of IBM’s brand.

To find your brand DNA, go back to the original vision and ethos of your founder(s). Walmart’s value proposition is everyday low prices. It’s by no means unique among retailers. But Walmart’s shared purpose is not about lowering prices, but raising the quality of life. When he founded the company, Sam Walton said, “If we work together, we’ll lower the cost of living for everyone.” Other retailers can match Walmart’s strategy, but not its narrative.

Losing the narrative

Most companies don’t have a powerful narrative. They are missing the human connection, lack a shared purpose, or are out of alignment with their brand DNA. But the opposite can also be true. Some companies have a powerful narrative and then lose it. Starbucks is one such cautionary tale.

At the core of Starbucks narrative is the idea of a “third place.” Before becoming the CEO, Howard Schultz traveled through Europe and realized that in every country there was a third place between home and work where people gathered for conversation and community over a beverage. He envisioned Starbucks as a third place for America. The concept of third place powered years of exponential growth for Starbucks until Schultz stepped away from direct management of the business in 2000. Financial performance suffered until his return in 2008.

In his book Onward, Schultz reveals that Starbucks lost its narrative while he was away. Schultz writes: “Starbucks’ coffee is exceptional, yes, but emotional connection is our true value proposition. Starbucks is not a coffee company that serves people. It is a people company that serves coffee.”

It is no coincidence that market leading companies like IBM, Nike, Walmart, and Starbucks have powerful narratives. By creating a context of human connection, collaborating around a shared purpose, and connecting with the company’s DNA, you too can create a narrative that energizes your executives, inspires employees, excites partners, and attracts customers.


Mark Bonchek is the Founder and CEO (Chief Epiphany Officer) of Shift Thinking. He works with leaders and organizations to update their thinking for a digital age. Sign up for the Causeit, Inc. newsletter and follow Mark on Twitter at @MarkBonchek.


Originally appeared on Harvard Business Review. Reproduced with permission from the author.

How to Discover Your Company’s DNA

The term “company DNA” is sometimes used as a shorthand for an organization’s culture and strategy — a metaphor for what makes it unique.  But there may be more to the metaphor. Understanding your company’s DNA can help you know what you can and can’t do, and how to achieve agility and authenticity in a changing world.

We know from biology that DNA contains the instructions an organism needs to develop, function, and reproduce. It is formed at conception and does not change. However, the same DNA can express itself in different ways based on one’s environment. It’s the reason identical twins have different fingerprints. In this process, called “expression,” the instructions in the DNA are turned into proteins and other cellular products.

Does biology inform business? It’s happened before. The language of ecosystems redefined our understanding of competition by viewing markets has habitats. Our understanding of organisms might lead to similar insights about organizations.

  • For example, DNA is formed at conception. Is that the case for companies too? Is a company’s uniqueness set by the founders’ vision and values?
  • Second, DNA does not change over the life of an organism. Is that true for a company? If so, does it limit the degree to which it can adapt and evolve?
  • Third, DNA expresses itself differently based on its environment. Might a company have the same DNA for its lifetime, but be able to innovate by expressing that DNA into new business models, organizational designs, and offerings?

These questions will clearly take a lot more research than this article. But the following stories suggest further exploration is warranted.

Consider Pokemon Go, the viral sensation of Summer 2016 and the most popular smartphone game in history. You probably know about the millions of people who gathered in public spaces trying to “catch” Pokemon characters with their phones. What you may not know is the origin of Pokemon.

The founder of Pokemon, Satoshi Tajiri, grew up outside Tokyo. His childhood hobby was collecting insects. The other children even called him “Dr. Bug.” As urban expansion paved over fields and forests, Satoshi’s insects disappeared. When Satoshi later developed an interest in video games, he saw a way to recreate his childhood experience of catching and collecting elusive creatures. For many years, this vision was played out on desktop computers. With Pokemon Go, Satoshi’s original vision remarkably came to life in the outdoor environments where it was first conceived. One might say that the company DNA of Pokemon is “collecting creatures.”

Interestingly, Pokemon Go was produced by a company called Niantic, whose founder, John Hanke, created the company that became Google Earth. The DNA of Niantic might be described as “mapping places.” Put “collecting creatures” and “mapping places” together, and you have Pokemon Go. Conversely, it would be hard to imagine Mojang (creators of Minecraft) or LEGO, both of whom have a DNA of “building worlds,” having created Pokemon Go.

If we continue with the idea that DNA is set at the conception of the company, does it actually create a limit on the ability to adapt and evolve?  The examples below seem to suggest that a company must stay true to its DNA, but has a lot of room to express that DNA in new ways whether in external strategy or internal management.

To illustrate this, consider the paths of two competitors: IBM and HP. Both struggled in the 1990s, but one re-embraced its founder’s vision and values while the other rejected them.

The leader who defined IBM as we know it was Thomas J. Watson. It was his vision to move beyond “office appliances” and create the International Business Machines Corporation. His mantra was THINK. It was more than a slogan. It was a way of doing business and a credo for the company. Watson’s vision was to use thinking to create machines, and to use machines to enable thinking.

IBM had a near death experience in the early 1990s due a series of bad business decisions. But in the wake of that crisis, IBM returned to its DNA of “think.” IBM’s game-changing laptop was the ThinkPad. One of its most successful marketing campaigns was “Let’s Build a Smarter Planet.” And its current focus is on Cognitive Business, led by the machine learning technology called Watson.

IBM’s competitor, HP, was founded in 1939 by Bill Hewlett and Dave Packard in a one-car garage in Palo Alto. The “HP Garage” is recognized by many as the birthplace of Silicon Valley. (The garage is such a symbol of the entrepreneurial spirit that other tech companies have invented stories about how they too were started in a garage.)

As they outgrew the garage, Hewlett and Packard sought to maintain that entrepreneurial spirit on a larger scale. This became the “HP Way,” one of the first examples of empowering employees, decentralizing the organization, and tying pay to performance. Jim Collins has written of Hewlett and Packard that “their greatest product was the Hewlett-Packard Company and their greatest idea was The HP Way.”

Starting in the late 1990s, a series of CEOs saw the HP Way as a liability rather than an asset. They abandoned the HP Way and replaced decentralized entrepreneurship with centralized control. The mindset of the garage was not only abandoned, it was destroyed. When HP merged with Compaq in 2002, Bill Hewlett’s son Walter protested that “the fundamental mistake … was the perceived need to do something with scale instead of succeeding the way HP has in the past.” Only recently with CEO Meg Whitman, has HP begun to re-embrace the HP way.  In 2012 she announced to all the employees a re-expression as “The HP Way Now.”

This story suggests that there may be a limit on corporate malleability. Strategy must be aligned to the company’s own DNA as well as the marketplace.  Transplanted organs are rejected if there isn’t a genetic compatibility between donor and recipient. Similarly, one can’t simply transplant a best practice from another company. It needs to be consistent with the DNA of the company.

At first glance, this seems to pose a problem. In today’s markets, it’s more important than ever to adapt and evolve.  If companies are limited by their DNA, is it possible to change in a way that keeps them competitive?

In biology, there is a difference between genotype and phenotype.  The genotype is the underlying DNA or instruction set for a physical trait, also called a phenotype.  Sometimes the genotype determines the phenotype regardless of the environment, as in the case of hair color. But sometimes there is a range of how the DNA can be expressed, what’s called “phenotypic plasticity.” For example, when baby newts sense the presence of predators as they are growing, they develop bigger heads and tails, which increase their chance of survival.

In business, some companies display this same type of plasticity, finding ways of responding to new environments by expressing their DNA in new ways. Pokemon Go is an example of expressing the underlying DNA of “collecting” in a new environment on the smartphone. Similarly, IBM has gone through multiple iterations of taking the underlying DNA of “thinking machines” and expressing it across mainframes, PCs, cloud, and now artificial intelligence.

Today, GE is looking to make a similar transformation, re-expressing Edison’s DNA of “invention” into the new market for the Industrial Internet, less focused on manufacturing and finance and more on software and analytics.

How do you discover your own company’s DNA? Start digging around in the company archives, talking to early employees and reading the corporate history. Look to the original vision and values of the founders. How did they see the world? What problem were they out to solve? What was their core insight about human behavior and the creation of value?

Once you’ve found the DNA, map it to the company’s past and current business.  Where is there stronger or weaker alignment? Finally, as you consider future strategies, how can you increase your “competitive plasticity” — the ability to express your DNA in new ways that create unique value and sustainable advantage.

It’s not a coincidence that the origin of the word company is “companion”, corporation is “body”, and organization is “organ.” Just as we talk about human development as a combination of nature and nature, perhaps the growth of organizations follows a similar path.  As leaders we spend most of our time thinking about how to nurture and shape our companies.  It’s time we also paid attention to their intrinsic nature and how we can cultivate their full expression.


Mark Bonchek is the Founder and CEO (Chief Epiphany Officer) of Shift Thinking. He works with leaders and organizations to update their thinking for a digital age. Sign up for the Causeit, Inc. newsletter and follow Mark on Twitter at @MarkBonchek.


Originally appeared on Harvard Business Review. Reproduced with permission from the author.

Three Elements of a Successful Platform Strategy

We typically think of companies competing over products — the proverbial “build a better mousetrap.” But in today’s networked age, competition is increasingly over platforms. Build a better platform, and you will have a decided advantage over the competition.

In construction, a platform is something that lifts you up and on which others can stand. The same is true in business. By building a digital platform, other businesses can easily connect their business with yours, build products and services on top of it, and co-create value. This ability to “plug-and-play” is a defining characteristic of Platform Thinking.

Consider the market for smartphones. Nokia and Blackberry today are a shadow of their former glory. Their technology and products lag Apple and the Android ecosystem. But the triumph of Apple and Android is not from features and functions. It is from the app store on which external developers create value. Microsoft has gotten excellent reviews for the technology in its new phones, but it is the ability to create a successful platform that will determine its ultimate success.

The use of platform thinking extends beyond the tech sector. Retailers are shifting from distribution channels selling products, to engagement platforms co-creating value. Online retailers like eBay, Etsy, and Amazon led the way, and now traditional retailers are following.

JC Penney has made platform thinking a pillar of its reinvention strategy. Its stores are featuring more and more “boutiques” managed by others. It is no coincidence that JC Penney’s CEO, Ron Johnson, was previously at Apple. Johnson has said, “All those boutiques are the apps. What J.C. Penney is creating is a new interface.” While JC Penney’s pricing strategy has been controversial, analysts have been very positive about the in-store platform.

Nike is also shifting from products to platforms. Building on the success of its Digital Sport products, Nike recently launched its Nike+ Accelerator to help companies build on the Nike+ platform. Nike’s announcement reflects platform thinking. “We are looking for people who want to create companies that build upon the success of [Nike+] to make the world more active.”

The rise of platforms is being driven by three transformative technologies: cloud, social, and mobile. The cloud enables a global infrastructure for production, allowing anyone to create content and applications for a global audience. Social networks connect people globally and maintain their identity online. Mobile allows connection to this global infrastructure anytime, anywhere. The result is a globally accessible network of entrepreneurs, workers, and consumers who are available to create businesses, contribute content, and purchase goods and services.

Readers will recognize a number of intellectual foundations to platform thinking. These range from Geoffrey Moore’s ecosystems to John Hagel and John Seely Brown’s focus on “pull.” Where traditional ecosystems push, these new platforms pull. Platforms also rely on the power of network effects — as they attract more users, they become more valuable to those users. And there’s a growing academic literature that explores the unique quality of value creation on what are called “multi-sided platforms.”

In our view, the success of a platform strategy is determined by three factors:

  1. Connection: how easily others can plug into the platform to share and transact
  2. Gravity: how well the platform attracts participants, both producers and consumers
  3. Flow: how well the platform fosters the exchange and co-creation of value

Successful platforms achieve these goals with three building blocks:

  1. The Toolbox creates connection by making it easy for others to plug into the platform. This infrastructure enables interactions between participants. For example, Apple provides developers with the OS and underlying code libraries; YouTube provides hosting infrastructure to creators; Wikipedia provides writers with the tools to collaborate on an article; and JC Penney provides stores to its boutique partners.
  2. The Magnet creates pull that attracts participants to the platform with a kind of social gravity. For transaction platforms, both producers and consumers must be present to achieve critical mass. Apple needed to attract both developers and users. Similarly, eBay needed both buyers and sellers. Platform builders must pay attention to the design of incentives, reputation systems, and pricing models. They must also leverage social media to harness the network effect for rapid growth.
  3. The Matchmaker fosters the flow of value by making connections between producers and consumers. Data is at the heart of successful matchmaking, and distinguishes platforms from other business models. The Matchmaker captures rich data about the participants and leverages that data to facilitate connections between producers and consumers. For example, Google matches the supply and demand of online content, while marketplaces like eBay match buyers to relevant products.

Not all platforms place the same emphasis on all three building blocks. Amazon Web Services has focused on building the Toolbox. Meanwhile, eBay and AirBnB have focused more on the Magnet and Matchmaker role. Facebook has focused on the Toolbox and Magnet, and is actively building its Matchmaker ability.

In the future, we will see more and more companies shifting from products to platforms. Even those in the extermination business may worry less about building better mousetraps, and more on building mousecatching platforms. For example, imagine a smart mousetrap with sensors that wirelessly communicate to a cloud-based MouseCatcher service. Homeowners and exterminators could monitor the status of the trap on their smartphones, receiving a text message when it is out of bait or needs checking. Smart traps already exist. But the shift from products to platforms would focus on building the service (the Trapp Store?) that enables anyone with a smart trap to connect and communicate.

Every business today is faced with the fundamental question that underlies Platform Thinking: How do I enable others to create value? Building a better mousetrap still might not have the world beat a path to your door. But the right platform might just do the trick


Mark Bonchek is the Founder and CEO (Chief Epiphany Officer) of Shift Thinking. He works with leaders and organizations to update their thinking for a digital age. Sign up for the Causeit, Inc. newsletter and follow Mark on Twitter at @MarkBonchek.

Sangeet Paul Choudary is a Singapore-based entrepreneur and author of the blog Platform Thinking.


Originally appeared on Harvard Business Review. Reproduced with permission from the author.

Focus on Keeping Up with Your Customers, Not Your Competitors

Every company these days seems to be either contemplating or pursuing digital transformation. Most cite the need to keep up with disruptive and well-established competitors. But perhaps this focus is too narrow. We believe the greatest challenge to companies today is not keeping up with their competitors, but with their own customers.

One reason is that individuals are transforming to digital faster than organizations. Think for a moment about people as tiny enterprises. They’ve redesigned their core processes in the area of procurement (online shopping), talent acquisition (marketplaces), collaboration (social networking), market research (peer reviews), finance (mobile payments) and travel (room and ride sharing). Have you reinvented your core processes to the same degree?

Customers’ expectations are also more liquid and no longer based on industry boundaries. Customers – whether consumers or business buyers – don’t compare your customer service to that of your competitors, but to the best customer service they receive from anywhere. The same is true for their expectations of your web site, mobile app, loyalty program, branding, and even social responsibility.

So how can you keep up with your customers? You have to start thinking like them.

Customers don’t think in or; they think in and. You have to transcend trade-offs.

The adage used to be that you could pick any two combinations of “cheap, good, or fast.” But today’s customer doesn’t want to make tradeoffs. They want it cheap, good, and fast. As leaders, we are accustomed to thinking of business being about making tough decisions between competing objectives. But we need to think more like our customers. Instead of focusing on how to make tradeoffs, we need to focus on how to transcendthem.

Some of the tradeoffs that are most suited to digital transcendence are:

  • Big and small: Combine the speed, agility and creativity of being small with the scope, scale and influence associated with being big.
  • Complex and simple: Manage the systems and processes to run a global business while creating simple and elegant experiences for customers.
  • Global and personal: Achieve universal consistency and reach around the world while delivering relevant, tailored interactions to every customer.

Customers want to be empowered, not controlled. You have to act with empathy.

Business used to be about getting customers to do what you wanted them to do. But customers don’t accept this any more. They don’t like to be told what to do. They want relationships based on reciprocity, transparency and authenticity. If you want to keep up with your customer, you can’t be focused on getting them to do what you want, but instead on helping them do what they want.

This evolution from control to empowerment means a change in the basic building blocks of customer engagement.

  • Funnels used to be linear processes that moved customers from one stage to the next. There was no going back until a sale was either won or lost. Now these funnels have become Escherian journeys, fluid, customer-led and multi-dimensional. It’s not about capturing and converting towards a transaction, but connecting and collaborating around a shared purpose.
  • Channels used to be pipes connecting you with your customer, carrying carefully crafted messages to passive audiences. Now they are experiences connecting customers to their own desires, and communities connecting customers to each other. It’s not about promoting the features and benefits of your product, but building empathy and understanding of each customer’s intent – and helping them achieve it – as part of an ongoing relationship.

Customers don’t think in straight lines. You need to be non-linear.

To keep up with your customer, you have to let go of linear thinking. Customers today expect you to be where they are, deliver what they want, when they want it, and how they want it. If they’re browsing your website on their laptop, they will expect that when they next come to your site from their mobile device or tablet, or talk to a sales person in your store, branch or call center, you will pick up right where they left off. Business has become like that old game of Twister. You have to be flexible if you are going to win.

This requires rethinking and redesigning core disciplines:

  • Strategy has to go beyond analyzing markets, making plans, and forecasting the future. Strategy also has to build capabilities, transform culture and architect for constant change.
  • Campaigns have to be more than one-way communications for one-time responses. They need to initiate and expedite personalized journeys as part of ongoing conversations.
  • Personalization needs to go deeper than looking simply at what someone buys. It needs to be based on the subconscious motivations of why someone buys, revealed through real-time analysis of a wide variety of data sources.
  • Social can’t be treated merely as a channel for distributing messages. Done right, it’s a context for building genuine relationships that demonstrate how much they really matter.
  • Loyalty needs to be more than accumulating points for rewards. To be genuine and enduring, loyalty needs to be reciprocal. If you want their loyalty, you have to be loyal in return.
  • Operations need to go beyond the efficiency of the company to the efficiency of the customer. How can you optimize to help customers get more for their time and effort, not just their money?

It’s a significant shift in mindset and practice to reorient from keeping up with competitors to keeping up with customers.

We suggest getting started by assessing where you are.

  • How does your transformation compare to your customers? In what areas are they moving faster or slower than you are?
  • Who is setting your customers’ expectations? It’s probably coming from outside your industry.
  • What kind of relationship do you want to have with your customer? Are you trying to get them to do what you want? Or figuring out how to help them do what they want?

Next, look at where to focus your attention.

  • Which tradeoffs do you need to transcend? We mentioned a few above. Others include speed and scale, consistent and nimble, high-tech and high-touch.
  • Where is linear thinking getting in the way? Review the disciplines outlined above and see which ones will have the most impact on your customer experience.

Creating sustainable advantage is more elusive than ever. The new game is designing customer-driven journeys across touch points to help them achieve their intent, and to create more multidimensional relationships. To win this game, stop thinking about just keeping up with your competitors, and start thinking about keeping up with your customers.


Mark Bonchek is the Founder and CEO (Chief Epiphany Officer) of Shift Thinking. He works with leaders and organizations to update their thinking for a digital age. Sign up for the Causeit, Inc. newsletter and follow Mark on Twitter at @MarkBonchek.

Gene Cornfield is Managing Director at Accenture Interactive, where he helps global organizations transform their customer experiences, organizations, and business outcomes.


Originally appeared on Harvard Business Review. Reproduced with permission from the author.

The Age of Social Products

We are moving from a world in which physical products are separate to one in which they are connected.  Computers were just the beginning.  Appliances and engines now send alerts when they need to be serviced.  Cameras upload their photos automatically.  Vending machines trigger their own restocking.  Crops feed and water themselves.

This shift has many monikers:  “The Internet of Things” and “The Internet of Everything” are two of the most popular. But the history of the Internet suggests that this is just the beginning.  The real change will happen when products aren’t just connected, but social.  Instead of the Internet of Things, we should be thinking about the Social Network of Things. To take advantage of this shift, you need to start thinking about the social life of your products.

What makes the Internet of Things possible is the confluence of multiple technologies:  inexpensive sensors, wireless networks, and cloud computing.   The ability to access data and computing resources from anywhere means that products don’t need to have computers and memory built into them.  They can just use the cloud.  Put sensors, a simple processor, and a wireless connection together and you have the makings of an intelligent and connected product.

The Internet of Things is already expected to transform customer servicebusiness models, and advertising.  But we should remember the evolution of the Internet.  The early days (Web 1.0) was about computers talking to computers.  A few years later (Web 2.0), people started talking to people.  The Internet was disruptive as a connected infrastructure, but it became explosive when it got social.

Today, most of the discussion about the Internet of Things is about products being connected.  But just because your product is connected doesn’t make it social.  For products, the real revolution will come when objects aren’t just passing information back and forth, but collaborating around a shared purpose.

This insight is behind Google’s recent acquisition of Waze for $1.1 billion.  Google already has the best map and traffic program, so why would they want another one?  Was it just to keep it out of the hands of Apple or Facebook?  We think not.

Among other things, Waze cracked the code on social products.  Google Maps is a data network, while Waze is a social network, in this case of cars, phones and people.  Waze creates a constantly updating repository of traffic information, much like Wikipedia creates a dynamic repository of encyclopedic information.  However, in this case, it is cars, phones and people who are collaborating to create the body of knowledge.  Waze provides a glimpse of how the car can become a social device by using the little data created by each individual car and driver.  According to the head of Google Maps, the goal is “to harness the power of Google technology and the passion of the Waze community to make it easier to navigate your daily life.”

Waze shows us how the cars of the future will not only connect to each other but also leverage the collective intelligence of that community of connected cars. We can see this in other areas as well.  Connected e-readers already help every individual reader benefit from the actions of the community. Nike is betting on a future with connected shoes, where each individual shoe learns from the data aggregated from a network of connected shoes. Social products leverage the power of the community to learn from other products.

So how do you create a social product?

First, you need a product that is smart and connected.  You can build your own (like the thermostats and home alarms from Nest) or use someone else’s device.  It might be a smartphone (think Waze), a consumer device with open APIs (like Nike’s FuelBand), or a commercial device with a strategic alliance (likeOpower and electric utilities).

Second, you need to make the product social.  This requires a platform where people and products are connected in a collaborative network.  Each individual product and each user benefits from being part of a community of fellow products and users. For example, Nest’s thermostat and smoke detector work together.  When the alarm detects carbon monoxide, it tells the thermostat to turn off the furnace.

In the case of Waze, each car and driver benefits from the information gleaned and aggregated from the community of cars and drivers.   That’s not all.   A Department of Transportation study demonstrates how cars of the future will talk to each other.  Cars within 1,000 feet of one another will send out their speed and location to the others, which will then notify the driver as needed.  Google’s driverless cars will be able to make adjustments automatically.  In this future state, is it the cars that are driving, or the social networks?

If you are considering building a strategy around social products, you have a few choices.   You need a connected product, a social network of people, a social network of products, and a collaborative platform for interaction, data exchange, and analytics.  The good news is that you don’t have to do all of this yourself.

  • Instagram leveraged an existing connected product (smartphone camera) and an existing collaborative platform (Facebook) to create a social network of connected camera-phones.
  • Qualcomm Life is creating a new collaborative platform to transform existing connected devices (for mobile health and fitness) into social products.  Recognizing they also needed a social network of people, they recently purchased HealthyCircles to help physicians, patients, and families coordinate care and support.
  • Nike is creating an entire ecosystem of connected products (Hyperdunk+ shoes), social network of products (FuelBand), social network of people (Nike+), and collaborative platform (Digital Sports).

The Age of Social Products will change the basis of competitive advantage.  Companies have traditionally focused on product supremacy, outdoing their competitors with better features and attributes.  In an age of social products, competitive advantage comes not from product features but from network effects.  Companies succeed by having products that better leverage the intelligence of the network of other connected products. This is a shift in mindset from standalone-product thinking to connected-platform thinking.

The Age of Social Products is dawning.  Companies that create products that are smart, connected, and, most importantly, social, will not only survive, but thrive.


Mark Bonchek is the Founder and CEO (Chief Epiphany Officer) of Shift Thinking. He works with leaders and organizations to update their thinking for a digital age. Sign up for the Causeit, Inc. newsletter and follow Mark on Twitter at @MarkBonchek.

Sangeet Paul Choudary is a C-level advisor to executives globally on platform business models, an entrepreneur-in-residence at INSEAD and the co-chair of the MIT Platform Strategy Summit. He has been ranked among the top 30 emerging business thinkers globally by Thinkers50. He is also a co-author of Platform Revolution (W.W. Norton & Company, 2016) and the April 2016 HBR article Pipelines, Platforms, and the New Rules of Strategy.” Follow him on Twitter at @sanguit.


Originally appeared on Harvard Business Review. Reproduced with permission from the author.

The Coming Branded-Currency Revolution

Coupons. Gift cards. Loyalty points. These tried-and-true tools of the retail trade might not be as sexy as other forms of marketing. But together they account for more than $165 billion in purchasing power ($110 billion in gift cards purchased, $48 billion in loyalty points earned, and more than $5 billion in product coupons redeemed). That’s almost as much as total e-commerce sales.

These instruments share a common objective: to influence purchase decisions by equipping consumers with incremental spending power for specific brands and retailers. But consumers use them independently and individually (combining their value, when possible, takes a lot of manual effort), and store them in different places — often in drawers or folders where they lay forgotten and unused.

This is changing as coupons, gift cards, and loyalty points all become digital — and, more important, mobile. Mobile enables all of this purchasing power to converge in one place, and potentially be used interchangeably and collectively, always within easy reach for consumers.

What does this mean for retailers and brands? The mistake would be to think that they can keep doing what they have always done, but just add a little digital to it. Instead, retailers need to think about coupons, gift cards, and loyalty points not only as three separate tools, but as different forms of Branded Currency.

Economists define currency as a store of value and a medium of exchange. All of these instruments are stores of value, and by going digital and mobile, they become far more effective mediums of exchange.

The first wave of this convergence has made it easier for consumers to use their coupons or points for payment. Card-linked offers enable consumers to load coupons to their credit cards or loyalty accounts in advance of purchase. Valid offers are automatically applied as a credit when consumers’ cards are scanned at the point of sale. Consumers like it because they don’t need to remember or present individual coupons. Another approach is Shop-with-Points. As an example, Amazon enables consumers to use their credit card loyalty points as a way to pay for purchases on the site. Shoppers can see their balance and apply their points as easily as using a gift card or credit card.

Where the first wave made possible convertibility, the second wave introduces much greater convenience. Mobile wallets, like Apple’s Passbook, bring coupons, gift cards, and loyalty cards together in one place without the constraints of a physical wallet. This innovation is good, but it’s a bit of a horseless carriage, still tied to the mental model of a wallet. Consumers still need to manually figure out which instruments can be combined and which cannot, prioritize them based on expirations, calculate the math on their own, and then present them at point-of-sale one at a time.

The third wave will be the mobile portfolio manager, the automobile to the mobile wallet’s horseless carriage, which marries the convertibility of the first wave with the convenience of the second. When you treat coupons, cards, and points as convertible instruments, fully leverage the power of digital and mobile technology, and add intelligence into the system, you get an entirely new possibility: calculating and comparing purchasing power, converting currencies, prioritizing usage, and dynamically creating scannable barcodes or other methods for combined payment. Soon consumers will be managing their Branded Currency the way they use Mint to manage their bank, credit, investment, and other financial accounts.

There is a lot of talk these days about brands as publishers. But the successive waves of Branded Currency suggest that retailers will also need to think like bankers who mint their own currencies. Market leaders will be those who best help consumers manage and spend Branded Currency from their portfolios, offer the best exchange rates, create the most liquidity, and make the most efficient markets. Retailers who adopt and execute smart Branded Currency strategies will gain relative share of wallet and have deeper, more enduring relationships with consumers.

Starbucks is perhaps the most advanced retailer in the area of Branded Currency. Most retailers treat their gift card program as an afterthought. Starbucks, on the other hand, has turned it into a hub for competitive advantage. In fact, CEO Howard Schultz considered the combination of mobile payments and social networking as central to the company’s “blueprint for growth.”

In 2011, Starbucks launched Android and iPhone apps that enabled customers to mobilize and easily reload their plastic cards or purchase new digital gift cards. Most Starbucks customers use the gift card not as a present for others, but as an easy way to pay for purchases, redeem offers, and earn rewards. In effect, they transformed their gift card into a mobile payment/loyalty card and their mobile app into a wallet for their Branded Currency. Over 7 million people now use Starbucks’ mobile app to make 4.5 million payments a week, accounting for at least 10% of Starbucks total U.S. revenue. Over 10 million Starbucks eGifts, the digital version of a gift card, have been sent just since 2012.

The strength of Starbucks strategy is not in any single program or promotion. It is the way that the entire Branded Currency system works together to provide an integrated and seamless experience for the customer. They knit together a variety of technologies and platforms from Apple, American Express, CashStar, Facebook, Square, and daily deal providers to promote and execute their deals, offers, and payments across digital, mobile, and social channels. But most importantly, by having its own Branded Currency system, Starbucks maintains control over the customer experience, relationships, and data.

Many technology companies including Apple, Google, eBay and Square are hoping brands will rely on their platforms to integrate and manage coupons, offers, gift cards, payments, and rewards.

Apple has been quietly creating a platform for managing branded currency in the form of its Passbook app and a newly filed patent. If brands aren’t careful, they will be as beholden to Apple for digital and mobile coupons, payments, and loyalty as record companies are for digital music, book publishers are to Amazon for digital books, and social game publishers are to Facebook.

As the market for Branded Currency converges and grows, brands will fall into three categories.

(1) Losers: Some brands will continue to operate their coupons, deals, offers, gift cards and loyalty programs the way they always have, as separate standalone programs, and will adopt mobile technology reluctantly. These brands will steadily lose their competitive edge and share of consumer spending.

(2) Laggards: Some brands will play catch up, adopting best practices after they are widely accepted, and rely on the platforms developed by technology and financial services companies. They will stay in the game, but will be in the middle of the pack, either unable to control the customer experience, lacking full access to their data, and losing margin to the platform provider.

(3) Leaders: A few brands will set the pace by creating an integrated approach to using Branded Currency as a vehicle for customer engagement. They will aggregate deals, offers, payments, and loyalty; unify online and offline; and put mobile at the center. They will work with other third-party platforms and wallets, but not be beholden to them. As a result, they will use their data to create value for their customers and bring a unique brand experience to every touchpoint. They will enjoy increased frequency and spend, forge stickier relationships, and greater and more sustainable profitability.

Will you be a loser, laggard, or leader? History, current trends, and the billions of dollars at stake would suggest it’s time to start building your Branded Currency strategy and system now.


Mark Bonchek is the Founder and CEO (Chief Epiphany Officer) of Shift Thinking. He works with leaders and organizations to update their thinking for a digital age. Sign up for the Causeit, Inc. newsletter and follow Mark on Twitter at @MarkBonchek.

Gene Cornfield is Vice President of Marketing at CashStar, a provider of digital gifting and mobile payments solutions. Follow him on Twitter @genecornfield.


Originally appeared on Harvard Business Review. Reproduced with permission from the author.

What if a Company Maximized Jobs Over Profits?

All over Silicon Valley, venture capitalists are asking entrepreneurs “How scalable is your business model?” What they really mean is, “Can you grow without having to hire people?”

In our digital economy, value creation and job creation don’t always go together.  Consider that Whatsapp just sold for $19 billion with only 55 employees.  It used to be that business growth led to job growth.  But as machines get smarter, labor becomes a reluctant necessity.  Companies only hire as a last resort.

But what if the purpose of a company was to employ people?  Instead of hiring enough people to make the greatest profit, it would make enough profit to hire the greatest number of people.

Put simply, these “job entrepreneurs” maximize jobs instead of profits.  There is a precedent in this. “Social entrepreneurs” seek to maximize purpose over profits.  They take a social problem, like health, poverty, or the environment, then work on finding a business model that can remedy the problem. They seek to make enough profit to make the greatest social impact.

Job entrepreneurs take a similar approach. They start with a group of people they seek to employ, then work on finding a sustainable business model that leverages their talent and experience. This isn’t about job placement. There are many organizations that help people find jobs in other companies. Job entrepreneurs bring people directly onto their own payroll.

One pioneer in the “job entrepreneur” movement is Dave Friedman. Two years ago, Friedman left his position as a Fortune 100 executive to start a new venture.  His goal was to employ people on the autism spectrum – individuals who have traditionally been unemployable.

Friedman considered creating a traditional startup, but he realized that his goal was different. He didn’t want to maximize profits but rather employment.  Many advised him to setup a non-profit. But Friedman didn’t want to rely on grants and donations. He believed the business needed to generate a sustainable profit to foster discipline and efficiency. He also wanted his employees to know that their jobs weren’t just charity, bringing a source of authentic empowerment.

Some advised Friedman to create a social enterprise, but the models didn’t really apply.  Friedman wasn’t changing how the product was made (e.g. organic or sustainable) or where it was sold (e.g. low-income buyers).  He was focused on changing who gets hired.  Like social entrepreneurs, WHY mattered more than HOW MUCH.  But in this case WHO mattered more than HOW or WHERE.

Without an existing model to guide him, Friedman set out to make his own.  He had a powerful belief that people on the autism spectrum represent an exceptional yet hidden workforce.  But he needed a business model that would turn what others saw as a deficit into a source of competitive advantage.

Friedman found his answer in what he calls “Process Execution” jobs.  These are labor-intensive activities such as website maintenance, data entry, and software testing. Many companies struggle to fill these positions. But the repetitiveness and attention to detail are well-suited to the talents and abilities of people with autism.

As much as possible, Friedman downplays the fact that his employees have autism.  He is not looking for charity.  He wants to compete on the same playing field as other companies providing similar services.  But on the inside, AutonomyWorks is unlike any of its competitors.  Friedman has redesigned the way work is structured, organized, and managed to suit his employees.

With these changes, Friedman has found that not only can AutonomyWorks match traditional competitors, but it can produce better quality at a lower price.  By generating profits, he is able to hire more people and fulfill his mission.  In the process, he has empowered an overlooked workforce and relieved families of the costs of supporting autistic relatives.

Another company following a similar model is Shinola, a Detroit-based manufacturer originally known for its shoe polish.  Shinola has recently reinvented itself to create jobs for unemployed auto workers.  Like AutonomyWorks, Shinola started with jobs and worked backward to the business model.  In this case, auto workers have unique skills in light manufacturing and upholstery.  So Shinola produces watches, leather goods, and handcrafted bicycles.  A traditional entrepreneur wouldn’t set out to make this combination of products.  But for a job entrepreneur in Detroit, it makes all the sense in the world.

So what does it take to be a job maximizer?

  1. Choose Your Talent. Who do you want to employ? AutonomyWorks focuses on people with autism. Shinola focuses on former auto workers. There are many other segments of the labor force who are underemployed or underutilized.
  2. Find Your Market. What products or services can these workers best make or provide?  This is where the entrepreneurial magic comes into play.  You need to find something that suits your people and also generates a sustainable profit.  Friedman recommends looking for markets where work has been off-shored or automated, and that have low capital requirements.
  3. Design Your System. What innovations do you need to meet the unique needs and bring out the best in your workers?  This might involve rethinking hiring, process design, management, or organizational culture.  The key is turning people’s disadvantage in society into your company’s competitive advantage in the marketplace.

Over the last twenty years, we have successfully created an entirely new economic sector in which social entrepreneurs maximize purpose over profit.  It’s time to turn this entrepreneurial spirit on a new goal:  job creation.  We need more people like Dave Friedman and more companies like Shinola — job maximizers and employment entrepreneurs.


Mark Bonchek is the Founder and CEO (Chief Epiphany Officer) of Shift Thinking. He works with leaders and organizations to update their thinking for a digital age. Sign up for the Causeit, Inc. newsletter and follow Mark on Twitter at @MarkBonchek.


Originally appeared on Harvard Business Review. Reproduced with permission from the author.

Use Doctrine to Pierce the Fog of Business

The “fog of war” describes the uncertainty faced by soldiers in the field of battle. In today’s markets, business leaders face a similar challenge: how to pierce through the “the fog of business.”

The traditional tools of management — strategy and planning — are no longer sufficient. Strategy and planning are like high beams on a car; they just bounce off the fog. Strategy doesn’t give employees enough guidance to know how to take action, and plans are too rigid to adapt to changing circumstances. In rapidly changing environments, you need fog lights to get closer to the ground.

Business leaders recognize the importance of pushing decision-making down the organization and out to the front line. But delegation can lead to invisibility, inconsistency and even chaos. When driving, fog lights work best when there are lines on the road to follow. Similarly, leaders must create mechanisms that keep everyone aligned to the mission and coordinated in the field.

Doctrine is the military’s mechanism for managing the fog of war, pushing decision-making closer to the ground while providing the lines to guide decision-making and action. Doctrine creates the common framework of understanding inside of which individuals can make rapid decisions that are right for their circumstances. We believe doctrine offers a powerful model for executives looking to pierce the fog of business and find new ways of exerting influence without centralized control.

NATO defines doctrine as “Fundamental principles by which the military forces guide their actions in support of objectives. It is authoritative but requires judgment in application.” If strategy defines objectives, and plans prescribe behavior, then doctrine guides decisions.

Consider one example from U.S. Special Operations teams trying to get the most use out of their helicopters, assets with high demand and limited supply. One approach would be to centralize all of these decisions, but that would be too slow. Another would be to have a computer automate the process, but there would be no way to feed enough data into the system in real time. So Special Operations went with a third option … let the human network figure it out and create solutions.

This network became the fog lights, pushing decision-making closer to the ground. But how to ensure the human network made the right decisions? What were the lines to paint on the road?

Military leadership created a common doctrine to frame the organization’s understanding of how helicopters would and wouldn’t be employed, their range, their maximum load capacity, their refueling requirements, etc. With these principles and shared understanding, the network could quickly coordinate across silos and create collaborative solutions.

One of the most powerful qualities of doctrine is its scalability. Like a Russian matryoshka doll, doctrine can be nested inside other doctrine. For example, the doctrine related to helicopters is nested inside doctrine related to the military’s network-centric approach to warfighting. This higher-level doctrine has four core tenets:

 A robustly networked force improves information sharing;
 Information sharing enhances the quality of information and shared situational awareness;
 Shared situational awareness enables collaboration and self-synchronization, and enhances sustainability and speed of command; and
 These, in turn, dramatically increase mission effectiveness.

One can see how the distributed approach to managing helicopters flowed from this higher level doctrine, especially in how to achieve self-synchronization. Doctrine provided the many units spread around the battlefield with a shared framework in which they could operate. Units were free to move and take action within that framework. In turn, results were fed back to leaders, who evolved the doctrine to improve performance, enabling a true learning organization.

The media company TED would seem to have little in common with Special Forces units in Iraq. But in fact, TED’s approach to scalable growth echoes the same doctrine-based approach.

Founded in 1984 by Richard Saul Wurman, TED became famous for its exclusive conferences and compelling talks. The world discovered TED when Chris Anderson posted videos of the talks online. But how to give more people the experience of TED events, not just the content? The solution was TEDx, which launched in 2008 to extend the TED mission of “ideas worth spreading.” In only a few years, TEDx has grown to 1,300 events in 134 countries with only a handful of employees.

What most people don’t know is that TED has no direct control over TEDx events. Instead, TED authorizes and empowers local organizers to create TED-like events in their own communities. How does TED ensure consistency instead of chaos? With what amounts to doctrine.

On its web site, TED publishes clear guidelines for organizers on how to run a TEDx event:

1. RULES, e.g. “Your event must maintain the spirit of TED itself: multidisciplinary, focused on the power of ideas to change attitudes, lives and ultimately, the world.”
2. RESPONSIBILITIES, e.g. “Early on, you’ll need to decide who your event is for: Work colleagues? Friends? Kids? This decision will help guide all the decisions that follow.”
3. RESOURCES: Best practices from the community on designing, promoting, and sponsoring TEDx events

These guidelines are consistent with the definition of doctrine: “Fundamental principles by which [TEDx organizers] guide their actions in support of objectives.” These principles are “authoritative but require judgment in application.” As another sign of the doctrine-based approach, TED recently had a problem with some of the TEDx events. Rather than step in to micromanage, they clarified and reinforced the doctrine.

How can you apply doctrine to your company?

1. See where you might already have some elements of doctrine. Do you have principles that guide decision-making throughout the organization? Sometimes these are informal precepts that are passed along as part of the culture. Other times they get codified, as Reed Hastings did for Netflix.

2. Identify areas conducive to doctrine-based approaches. It might be where the front line is calling for more authority, but where you are afraid to give up control. Or where centralized operations can’t keep up with the amount of information or the variety of local conditions (as in the case of the helicopters.)

3. Involve your broader team in creating the doctrine. When the military rewrote its doctrine on counter-insurgency, it brought together a cross-functional team of soldiers, civilians, experts and leaders while gathering feedback from hundreds of front-line personnel. When IBM rewrote its values, it engaged 50,000 employees around the world.

4. When developing doctrine, focus on principles not policies. Don’t be too specific in telling people what to do, but also not so broad that it doesn’t help them make the right decision. What information do you need from them, and what information do they need from you, in order to create rapid, independent, and effective action?

One way to put these steps into practice is to convene a “Constitutional Convention.”

After all, a constitution is essentially doctrine for democracy, providing the enduring principles by which to govern a nation. The Agile software movement started with such a gathering.

Ultimately, good doctrine becomes embedded in the culture. Touring a command post in Baghdad, a general came across this sign: “In the absence of guidance or orders, determine what they should have been and execute aggressively.” Good doctrine provides the empowerment, autonomy, and direction to make this not only possible, but effective. For business leaders operating in fast-moving and uncertain environments, doctrine dispels the fog of business.


Mark Bonchek is the Founder and CEO (Chief Epiphany Officer) of Shift Thinking. He works with leaders and organizations to update their thinking for a digital age. Sign up for the Causeit, Inc. newsletter and follow Mark on Twitter at @MarkBonchek.

Chris Fussell is a director at McChrystal Group. Follow him on Twitter at @mcchrystalgroup.


Originally appeared on Harvard Business Review. Reproduced with permission from the author.

The Best Digital Strategists Don’t Think in Terms of Either/Or

It has become an axiom that “strategy is about making hard choices,” as we have been advised for over 20 years by leading thinkers including Michael Porter and Roger Martin. But our work with a community of senior executives in the Bay Area suggests that today’s market leaders are following the advice of Yogi Berra: “When you come to a fork in the road, take it.” Faced with hard choices, innovators find ways to transcend the tradeoffs. While their competitors make the hard choice between one or the other path, these businesses reap the benefit of both.

Transactions and relationships. When it comes to digital engagement, many companies feel they have to choose either transactions or relationships. Social media evangelists tell CEOs they need to stop focusing so much on driving sales and “connect instead of promote.” A focus on the transaction, they say, jeopardizes the relationship. Meanwhile, sales strategists suggest that social media is often more “hype” than “reality.” Focus on the relationship and forget the transaction, and you waste the company’s resources. The hard choice, it would seem, is between transactions or relationships.

Sephora has become a leader in the cosmetics market by transcending this tradeoff, finding ways to achieve transactions and relationships. It has a vibrant e-commerce business and a highly engaged customer community. What is particularly impressive is how Sephora is bringing transactions and relationships together in the same experience. On the Sephora Beauty Board, community members can upload photos of their favorite “looks” with the makeup products that made it possible. Click on a photo and you can see someone’s profile or posts. Click on a product and you can make a purchase.

High-tech and high-touch. There is concern these days about how technology is replacing our jobs and estranging our connections. As our communications become more digital, our customer relationships become less personal. The only hope seems to be make our technology appear more human.

In the apparel industry, companies choose one path or the other between high-tech and high touch. Shopping services like StyleSeek take the road marked “algorithm,” while Nordstrom’s Trunk Club takes the road marked “personal service.” Approaching the same fork in the road, Stitch Fix chose to go in both directions. New customers fill out a survey about their style and lifestyle. Ever-evolving algorithms then generate recommendations for Stitch Fix stylists, who select the final assortment for their customers based on personal knowledge and relationships. It’s no coincidence that the Chief Algorithms Officer at Stitch Fix was formerly head of data science for Netflix, and its Chief Operating Officer, Julie Bornstein, was formerly CMO at Sephora. Together, they are transcending the tradeoff between high-tech and high-touch.

Size and speed. There is an African proverb, “If you want to go fast, go alone. If you want to go far, go together.” Most large companies excel at going far and going together. But these days every company has to go fast. Is it possible to be both bigger and faster? The recent experience of Visa provides some lessons in how to transcend the tradeoff between size and speed.

The market for cardless payments is growing rapidly, posing a threat to Visa’s core business. Four years ago, Visa launched V.me, but failed to gain ground against its nimble new entrants. For the recent launch of Visa Checkout, Visa took a different approach. One option was to focus purely on speed, and either acquire a smaller company or create a separate skunkworks. But this would have lost the advantage of size.

The solution was to go for size and speed. Lara Balazs, SVP of North America Marketing, leveraged Visa’s brand and market position to recruit a team of top talent, forge strategic alliances with market leaders, and create widespread awareness in the market. Although size was an advantage externally, it was a disadvantage internally. To leapfrog the competition, she had to move fast, but she also needed the involvement of twelve different departments. She had to go fast and go together. Her solution was to rip up the org chart, creating a “team of teams” with a new kind of culture for Visa that emphasized agility and experimentation over consistency and compliance.

Profit and purpose. Purpose has become popular for many reasons. It helps to re-energize leadersengage millennialsinvigorate brands, and demonstrate corporate social responsibility. But purpose still seems like a “nice to have” or something done on the side. Corporate boards still focus on quarterly earnings.

Faced with the choice between profit and purpose, some executives are making the move to social enterprises where profit and purpose are more intertwined. However, the evidence indicates that for-profit companies with a strong sense of purpose have better financial performance. So how can companies in traditional industries achieve both?

For most financial institutions, profit is the purpose. But Wells Fargo has a purpose behind profits.  According to CMO Jamie Moldafsky, “every employee at Wells Fargo is focused on helping our customers succeed financially.”  This approach is reflected in initiatives such as “Untold Stories” which fulfill this purpose in local communities. Echoing their logo, Wells Fargo promises to “never put the stagecoach ahead of the horses.” Proving that they have successfully transcended the tradeoff, Wells Fargo consistently outperforms it’s less purposeful peers.

Toymaker Goldieblox shows that purpose can fuel market disruption. Their mission to increase the number of women engineers led to an entirely new kind of product that combines storytelling and building. According to Lindsey Shepard, VP of Sales and Marketing, GoldieBlox is about encouraging girls to “think about themselves as innovators that can build their own future.” The result is a disruption in the proverbial “pink aisle.”

Airbnb is also fusing profit and purpose, disrupting (at least initially) the hospitality industry. Just a couple of years ago, people considered it strange to stay in a stranger’s home instead of a hotel. But according to their Chief Marketing Officer, Jonathan Mildenhall, Airbnb is on a mission to change both “behavior and perception” so that people can “belong anywhere.”

For each of these companies, purpose isn’t something on which they spend their profits, or a strategy they devise to make more money. Instead, profit and purpose are intertwined proving that money and meaning can indeed work together.

There is no doubt that these companies have all made hard choices in executing their strategies. But the nature of “the hard choice of strategy” has changed in today’s marketplace. It’s no longer about giving up something that is important to you or your customer. In many cases, it’s about finding a way to take both paths at once. For that is truly the road less traveled.


Mark Bonchek is the Founder and CEO (Chief Epiphany Officer) of Shift Thinking. He works with leaders and organizations to update their thinking for a digital age. Sign up for the Causeit, Inc. newsletter and follow Mark on Twitter at @MarkBonchek.

Cara France is CEO of The Sage Group, a firm providing marketing and consulting talent to San Francisco Bay area companies, and founder of Marketers that Matter. Follow her on Twitter @SageCEO.


Originally appeared on Harvard Business Review. Reproduced with permission from the author.

A Good Digital Strategy Creates a Gravitational Pull

Thanks to social media, businesses need to change how they think about influence. You can control what you say in an ad, sales meeting, or company memo, but when people connect peer-to-peer, you lose direct control over what is said or done. The new challenge is how to have influence from a distance.

Our mental models — such as those that come from the battlefield or biology — are ill-suited for this challenge. To understand influence from a distance, we must look to a different kind of force: not mechanical or biological, but gravitational.

By definition, gravity is a force that attracts any object with mass. Every object is pulling on every other object in the universe, a fact that is known as Newton’s Law of Universal Gravitation. Objects with greater mass exert more pull, and the strength of the force increases exponentially as objects move closer together.

Gravity has four attributes that are relevant to thinking about strategy in a digital age.

First, gravity is a force of attraction. As John Hagel and John Seely Brown have observed, business models are shifting from push to pull. Instead of pushing resources to meet expected demand, companies such as Uber and Zara enable customers to mobilize resources by pulling them in as need arises. A similar change is happening in marketing, as ad spend shifts from push strategies that broadcast a message to pull strategies that respond to or even predict customer interest. Gravity gives us a way of comparing the relative strength of a pull strategy, whether as a business platform or a method of engagement.

Second, gravity exerts influence at a distance. In a networked world, things are more interconnected but also more fragmented. As a result, there is a greater chance of events happening outside our field of view: In politics we have seen Brexit and the surprise result of the recent U.S. presidential election, while in business we see customer insurgencies like the one against New Balance. In addition, brands are recognizing the limited effectiveness of branded content they can control. Real influence comes from catalyzing trends and ideologies happening in the broader culture.

Third, gravity is ubiquitous. It’s no longer possible to control everything about your product. We need to assume that everything can and will be seen by anyone. Amazon plans its product launches on the assumption that the news will be leaked. Companies need to find ways to be everywhere, all the time. The media landscape has become too fragmented to only target individual audiences. People are now the new channel. Gravity gives us a way of thinking about reaching anyone at any time.

Fourth, gravity is exponential. The ability to harness exponential growth is a common element of disruptive business models and a key to successful platform strategies. The problem is that traditional ways of thinking about strategy are mechanical, and therefore incremental. Gravity gives us a way of thinking about strategy that is exponential. As gravity pulls an object closer, the gravitational effect increases exponentially.

Physics tells us that gravity is more complex than two objects pulling on each other like magnets. Einstein revealed that gravity warps space and time. Gravity puts curvature into the universe, like a bowling ball dropped in the center of a trampoline, altering the path that objects travel along. In a similar way, companies that use the gravity model to compete can warp the marketspace, altering the dynamics of their industry. They do more than hit their targets and push them through the sales funnel: They create an ongoing relationship that alters the trajectory of customers’ lives and companies’ operations.

To compete with gravity, your strategy needs to generate a force of attraction, pull people into its orbit, and help them pull others in, too. Here’s what you need:

  • Gravity Generators. To create a force of attraction, you have to go beyond thinking about value propositions and target audiences. Gravity originates in a shared purpose that is created with your stakeholders as cocreators, not just to or for them as consumers. Sephora, for example, creates gravity with a mission to “Beauty Together,” and relates to their customers as artists. Nike creates gravity with a mission to inspire the athlete in all of us, and relates to everyone as an athlete. Its saying is: “If you have a body, you are an athlete.”
  • Experiential Orbits. To turn purpose into profit, companies design orbits that keep customers (and other stakeholders) in an ongoing relationship beyond individual transactions, or orbit. Instead of using relationships to drive transactions, gravity companies embed transactions in relationships. Amazon’s Prime program is a sophisticated orbit, attracting members with a wide range of experiences, from shopping to ebooks to streaming media. Google and Apple have designed different kinds of orbits. Google’s orbit includes search, email, and maps; Apple’s has iTunes, Facetime, and the Genius Bar.
  • Force Multipliers. Companies competing on gravity create the equivalent of solar systems, with a shared purpose at the center and stakeholders in orbit around that purpose, like planets. But planets generate their own gravity. Your stakeholders’ networks are like moons around a planet. By helping them generate their own gravity, you attract others into your orbit. Vail Resorts does this with its EpicMix program, turning skiing into a social experience. Topgolf has done the same with its driving ranges. When you help people attract others, you become an even greater force of attraction.

The following questions are helpful for understanding how well you are generating gravity and warping marketspace to your advantage:

  • Is your narrative more about your products or your purpose? Is there a reason for people to want you to succeed in your mission even if they never buy anything from you?
  • What proportion of interactions with your company are not directly related to a transaction, either as sales or service? Do you create value for people beyond the products you sell?
  • What proportion of interactions about your brand or product happen without your direct involvement? How well do you support those interactions (without being in control of them)?

What does all this look like when you put it together? Imagine your industry as a galaxy. Each competitor has its own solar system. Your prospective customers are floating through space. Your job is to create enough gravity to pull them into your orbit. Your job is also to dislodge those on the outer edges of your competitors’ systems and bring them into yours.

Once they’re in orbit, you need to keep bringing them closer, increasing their loyalty and advocacy and attracting peers from their networks into yours. As the mass of your solar (or social) system grows, so does the gravity you generate. If your gravity weakens, a competitor will come along and attract customers away.

Competitive advantage has traditionally been about higher barriers to entry. Now it’s increasingly about generating a greater force of attraction.


Mark Bonchek is the Founder and CEO (Chief Epiphany Officer) of Shift Thinking. He works with leaders and organizations to update their thinking for a digital age. Sign up for the Causeit, Inc. newsletter and follow Mark on Twitter at @MarkBonchek.


Originally appeared on Harvard Business Review. Reproduced with permission from the author.

Little Data Makes Big Data More Powerful

You may not know this, but Big Data has a little brother. And together, Big and Little Data are far more powerful than Big Data alone.

Big Data is what organizations know about people — be they customers, citizens, employees, or voters. Data is aggregated from a large number of sources, assembled into a massive data store, and analyzed for patterns. The results are more accurate predictions, more targeted communications, and more personalized services. Big Data is what enables banks to predict credit card fraud by analyzing billions of transactions, marketers to understand customer sentiment by analyzing millions of interactions on social media, and retailers to target promotions and offers by analyzing millions of purchases.

In contrast, Little Data is what we know about ourselves. What we buy. Who we know. Where we go. How we spend our time. We’ve always had a sense for these things — after all, it’s our lives. But thanks to the combination of mobile, social, and cloud technologies, it’s easier than ever to gain insight into our own behavior.

As an example, consider the emerging field of mobile health. Portable devices like the FitBit or Nike FuelBand measure your activity level and sync with your smartphone. The associated mobile app gives feedback, encouragement, and rewards as you reach your goals. New research shows that people who use tracking technologies are more likely to be successful in losing weight and getting in shape.

A similar trend is underway in energy conservation. The company Opower partners with utilities to give customers visibility into how their electricity consumption compares with the average of their neighborhood.

Big and Little Data differ in three primary ways:

  • Focus: The focus of Big Data is to advance organizational goals, while Little Data helps individuals achieve personal goals.
  • Visibility: Individuals can’t see Big Data; Little Data helps them see better.
  • Control: Big Data is controlled by organizations, while Little Data is controlled by individuals. Companies grant permission for individuals to access Big Data, while individuals grant permission to organizations to access Little Data.

Without Little Data, Big Data has a tendency to become Big Brother. We’ve all experienced that unsettling feeling when ads follow us on the web, a practice marketers call retargeting. And retailers have gotten into trouble when Big Data predicts things about people they don’t even know themselves.

On the other hand, Little Data without Big Data is incomplete. One complaint about portable fitness devices is that they aren’t sufficiently prescriptive. They don’t tell you what to do based on your behavior. How much activity should I be getting? If I’m not sleeping well, what can I do to sleep better? This requires a partnership with individuals and health care providers to combine tracking with advice and treatment.

Or consider the experience of grocery shopping. We are all familiar with the coupons we get when we checkout at the register. In the time it takes for you to sign your credit card slip, a massive database analyzes what you bought today, what you bought in the past, and what people like you tend to buy, then matches it to the available offers and prints out a personalized set of coupons. A classic case of Big Data.

But what does this scenario look like with Little Data? Start by applying the three steps:

  • Shift Focus: How can we help individuals achieve their goals?
  • Make it Visible: How can we give people visibility into their own data?
  • Share Control: How can the relationship be more reciprocal?

Putting these together, we can imagine a different kind of shopping experience. The Little Data alone could be used to create a personal shopping assistant that lets you:

  • Generate shopping lists automatically based on what you’ve purchased in the past. This feature could be used to send a reminder while you are right in the store, e.g. “Don’t forget the milk!”
  • Bring promotions to you based on your interests. For example, instead of paging through the entire circular, you could find out if there are specials on any of your favorite brands.
  • Provide useful information to guide purchasing decisions. For example, the assistant could alert you to foods with ingredients that might trigger food allergies.

Things get really interesting when we combine the power of Big Data with Little Data. For example, as a shopper, I’m interested to know which brands have the highest loyalty or what else people might have on their Thanksgiving shopping list. There might even be patterns that could predict which foods I am most likely to enjoy based on what others buy who share similar purchase histories. (Think of this as the Netflix of food.)

This connection between Big and Little Data applies in other areas as well. Consider the smart thermostat made by Nest, which automatically adjusts itself to your preferences and behavior. A utility company could connect the Little Data from Nest devices to the Big Data from its power grid. Nest customers could then benchmark their energy usage against others in the community. Furthermore, the sense of shared purpose and the greater transparency and control give individuals greater incentive to share information and participate in energy saving initiatives.

This partnership between Big and Little Data can apply to almost any industry, from travel and financial services to health care and government. While companies build up their business intelligence teams and hire (Big) Data scientists, companies should also look to create services based on Little Data that empower their customers. These services would enable customers to pull information towards them when they need it, instead of just trying to figure out what message to send and when to send it. They would enable customers to make better decisions themselves, instead of trying to figure it out for them. This is a new way of thinking, and a new way of engaging customers. Perhaps we need a new generation of (Little) Data scientists to figure it out.

There is no doubt that Big Data will transform business. But in an age of connected and empowered individuals, precision targeting must be balanced with personal value. If you want to build loyalty, spend less time using data to tell customers about you, and spend more time telling them something about themselves.


Mark Bonchek is the Founder and CEO (Chief Epiphany Officer) of Shift Thinking. He works with leaders and organizations to update their thinking for a digital age. Sign up for the Causeit, Inc. newsletter and follow Mark on Twitter at @MarkBonchek.


Originally appeared on Harvard Business Review. Reproduced with permission from the author.

Healing the Wounds of the Assembly Line with Feedback Loops and Doctrine

Healing the Wounds of the Assembly Line with Feedback Loops and Doctrine

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Autonomy and Acceptable Failures: The Need for Doctrine

Autonomy and Acceptable Failures: The Need for Doctrine

Autonomy, especially in and around U.S. businesses, is a tricky concept. Autonomy is valued very highly in our culture, but the challenge of finding a way to hand off acceptable amounts of control takes a lot more work than most leaders or employees realize. Few companies have the patience or budget for mistakes which occur when a more-autonomous goes wrong, so they choose not to grant autonomy in the first place, or revoke it at the first sign of trouble. Understandably, the constant conflict of employees who need autonomy and leaders who need accountability plagues most organizations. 

First Steps to Doctrine: the Example of Moore's Cloud Business Principles

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