August 31, 2014
The phrase “you need to be more strategic” gets said daily in the corporate world. Everyone seems to proclaim they are a “strategic thinker” on their LinkedIn profile. People get promoted because they are strategic and held back in their careers at a given level because they aren’t strategic enough. Yet, has your boss ever had a real conversation about what it means to be more strategic? Or do they just say it and you just take it? Have you ever received training on being more strategic? I spent 20 years at Fortune 500 companies and I never received any training, tips or feedback on being more strategic. Yet, we keep saying “strategic” all the time.
So what is a “strategic thinker”?
To me, the difference between a strategic thinker and a non-strategic thinker is whether you see questions first or answers first. Both offer extreme value to a brand.
- Strategic Thinkers see “what if” questions before they see solutions. They map out a range of decision trees that intersect and connect by imagining how events will play out. They reflect and plan before they act. They are thinkers and planning who can see connections.
- Non Strategic Thinkers see answers before questions. They get to answers quickly, and get frustrated in delays. They believe doing something is better than doing nothing at all. They opt for action over thinking. They are impulsive and doers who see tasks. They get frustrated by strategic thinkers.
Great Brand Leaders are a bit of a chameleon, able to balance both strategy and execution. While pure strategic people make great consultants, I wouldn’t want them running my brand. They’d keep analyzing things to death, without taking action. Every day there would be more strategies. And while tactical people get stuff done, is it the right stuff? I want someone running my brand who is both strategic and non-strategic, almost equally so. Great Brand Leaders can talk with both types, one minute debating investment choices and then at a TV edit deciding on option A or B. Great Brand Leaders think with strategy but act with instincts.
I think strategic thinking is a natural state, but is challenged or destroyed through our education system. Every test in school has a right and wrong answer, very little room for options or opinion. In the classroom, there is pressure to give the right answer quickly–almost without thinking about it. Teachers grill you with simple questions, and you never get to ask them deep questions. But really, we should teach students to slow down their thinking, encourage asking great questions instead of just giving simple answers, teach them how to map out scenarios to figure out the impact of potential actions.
We need Brand Leaders who can slow down, so they can decide what to do, before they do it. As Yogi Berra once said “if you don’t know where you are going, you might not get there”.
There are six elements essential to good Strategy: Vision, Focus, Opportunity, Early Win, Leverage, Gateway.
- Vision: an aspirational stretch goal for the future, linked to a well-defined purpose. A good vision should push you, and scare you a little, but excite you a lot.
- Focus: alignment of your limited resources to a distinct strategic point you wish to penetrate, that creates positive momentum on a pathway towards your vision.
- Opportunity: something is happening in the market, making speed of execution matter, as a potential strategic opening gets taken by someone else or the opportunity may close.
- Early Win: break through point against where you put your focus, and you see a shift in momentum towards your vision. It offers potential proof to everyone that this strategy will work, helping to rally others–the team, agency and even your boss.
- Leverage: ability to turn the early win into creating a momentum with an even greater force of pressure, that leads to the tipping point to something bigger.
- Gateway: realization point where you see a shift in positional advantage or power that allows you to believe your vision is achievable.
Many Brand Leaders seem to fear focusing, yet focus is essential for strategy to work for you to get more from it, than what you put into it. I once had a Brand Leader list their target as “18-65, current customers, potential customers and employees” and I asked “what about prisoners and tourists?”. I constantly see Brands try to say 5 or 6 things in their message. Brand Leaders have 74 things on their to-do lists. When we realize that every Brand has limited resources (financial, time, effort and alliances) they can apply against an endless list of opportunistic choices (target, message, strategy and activities) do we start to make choices. Strategy is really where you apply your limited resources against pressure points you know you can break through, to gain something bigger than the sum of the resources you put into it.
All the great military leaders believe in the power of focus. Napoleon had two basic strategies: attack their strength first by over-whelming your opponent or attack their weakness first, forcing your opponent to use their strength to defend, dispersing the resources of their strength in doing so. His choices depended on opportunity. His writings, still read by military experts around the world, puts emphasis on focus, economies of resources and breaking through. Brands Leaders can learn from the principles of warfare.
Focus makes you matter most to those who care the most. Don’t blindly target consumers: target the most motivated. Focusing your limited resources on those consumers with the highest motivation and propensity to buy what you are selling will deliver the highest return on investment. In a competitive category, no one brand can do it all: brands must be better, different or cheaper to survive. Giving the consumer too many messages will confuse them as to what makes your brand unique. Trying to be everything to everyone is the recipe for being nothing. Return on Effort (ROE) is a great tool for focusing your activity. Doing a laundry list of activity spreads your resources so thin that everything you do is “ok” and nothing is “great”. And in a crowded and fast economy, “ok” never breaks through enough to get the early win and find that tipping point to open up the gateway to even bigger success.
When you focus, 5 things happen to your brand:
- Better Return on Investment (ROI): With all the resources against one strategy, one target, one message, you’ll be able to move consumers enough to drive sales or push other key performance indicators in the right direction.
- Better Return on Effort (ROE): It’s about getting more back than you put into the effort. Working smart helps make the most out of your people resources.
- Stronger Reputation: When you only do one thing, you naturally start to become associated with that one thing—externally and even internally. Reputation is a power you can push to find deeper wins.
- More Competitive: As your reputation grows, you begin to own that one thing and you can better defend that positioning territory. You can expose the weakness of your competitors, attract new consumers as well as push internally (R&D, service, sales) to rally behind the newly created reputation.
- Bigger and Better P&L: As the focused effort drives results, it opens up the P&L with higher sales and profits. People with money invest where they see return.
Case Study: Starbucks loses Focus by going after entertainment
A great case study in a brand who lost their focus is Starbucks back in 2003, as they took their corporate arrogance and large following to enter the music business. Sure they could hire great music people, but that’s not the core of the brand–either internally or externally. They lost focus on what they do really well: sell coffee in an atmosphere that helps you escape your hectic life. By 2008, people were wondering if the Starbucks bubble had begun to burst. Had they lost it? Starbucks closed stores and laid people off. Would it be the next Benneton? But the Brand used this point to successfully re-focus and build around Coffee. They closed every store for hours to re-train their barista, come out with new coffee flavours and built innovation around the coffee routine with pastries, snacks and sandwiches. Since the re-focus (see case study below), sales are up 58% over 5 years, and margins are back up to a highly respectable 55% levels.
Transforming your Focus into a Gateway to something bigger
Once you break through, it becomes about going beyond the break through. Too many pure strategists over look the EARLY WIN, and think of strategy as just vision and strategic choices. But they’ve never run a Brand, and they don’t know how many others you need to keep motivated and aligned. You want that Early Win, to kick-start some momentum–slice off part of the business or population segment or have your message connect. You need this to get everyone buying into the strategy. The LEVERAGE is when you start to use the positional advantage or power the early break through has given you. Without this, the early win becomes the only win, and it’s a hollow strategy. Believe in your new power and use the power gained to push and transform your wins into even bigger wins. As you go through the process, it’s important that you not get distracted from achieving the GATEWAY that lines up to your vision. It’s easy to get tempted by new opportunities that your break through has given you, but you have to stay focused on your vision.
Case Study: D-Day focuses the entire war effort on capturing a beach.
At a crucial point of World War 2, while Germany was fighting a war on two fronts (Russia and Britain), the Allied Forces planned D-Day for 2 years and joined in full force (Great Britain, US, Canada, Australia) to focus all their attention on one beach, on one day. Prior to the attack, there was debate, do we attack in one place that could be penetrated or in multiple spots where the Germans could would have to fight many battles? The smart decision started with focus. If we look at D Day using the six elements of good strategy, we can see how they won:
- Vision: Win World War II, with a goal to re-claim Europe and stop Germany. Spread democracy.
- Focus: All of the Allied forces of 156,000 soldiers, landing on the Beaches of Normandy on the morning of June 6th, 1944.
- Opportunity: Planned excessively, debated options, looked for beaches unguarded by Germans. Russia was attacking from the East weakening/distracting Germany.
- Early Win: Despite heavy casualties, the Allies were able to capture the beaches and within 5 days of D Day, the allied forces were able to put 325,000 soldiers on the beaches of Normandy.
- Leverage: Re-claiming Paris, pushing back the German Army, turned the momentum into the Allied Forces side. The allies were able to take the Positional Power and shift it to where Germany now defending on their own territory.
- Gateway: A year later, the allies defeated the German Army in Berlin. The US was now able to focus and fight the Pacific war and defeat Japan.
- Vision:Win World War II, spread ideals of democracy.
- Goals: Re-claim Europe, maintain troops.
- Key Issues: How do we turn the tide in the war effort in Europe? Where would the best attack point to get on to continental Europe? What are the defense technology investments needed?
- Strategy: pin-pointed attack to gain a positional power on continental Europe.
- Tactic: D-Day, taking all our troops and attack the Beaches of Normandy to get back on mainland Europe and battle Germany on an equal footing.
Case Study: Avril connects with her core audience through free mall concerts.
A great example of strategy that might not look like strategy on the surface was Avril Lavigne’s free mall concerts. Back in 2005, Avril’s career was flat, after some early success, which is a normal path for young musicians. To kick off her album, she did a series of free mall concerts—and was criticized as desperate. She was desperate and not everyone understood the logic. Let’s use the six elements of good strategy to assess the Avril re-launch:
- Vision: Be a pop superstar again, #1 album, sold out concerts.
- Focus: Malls are exactly where her target (11-17 female) hangs out, allowing her to focus all her energy on her core target. Positioned as giving back to her fans.
- Opportunity: First star ever to give free concerts. She had a new album coming out. There were still record stores in malls.
- Early Win: She attracted 5k screaming 13-year-olds per mall which created an early win among her most loyal of fans: those who loved and adored her. Local news covered the story giving her added exposure. Everyone (mom and kids) was happy with the “free” gesture.
- Leverage: She was able to leverage the good will and energy to get these loyal fans to go buy her album in the mall record stores which helped her album debut at #1 on the charts.
- Gateway: Everyone knows the charts are the gateway to the bigger mass audience–more radio play, more iTunes downloads and more talk value. The comeback complete.
Avril’s strategy holds up very strong. Not a surprise because Madonna used this same strategy for years, except replace malls for teenie-boppers with London night clubs for 20-somethings where she would drop her songs and even make random appearances. If you were to write the Avril Brand Plan, here’s what it might look like:
- Vision: Recording Super Star
- Goals: New Album Sales, increase popularity, new recording contract
- Key Issue: How do we drive album sales for a slumping Avril?
- Strategy: Reconnect with core teen fans to create momentum to trigger album sales
- Tactic: Free Mall tour to get most loyal fans to reconnect and buy the new album.
Case Study: Starbucks refocuses by building around the Coffee routine.
Starbucks experienced tremendous growth through the 80s and 90s, mainly because of the their coffee. Starbucks quickly become a life ritual in the morning to wake you up. Following their “hobby” (case study above) into the entertainment field in 2003-2008, they hit the skids and faced some trouble that caused them to re-trench and focus on building around their coffee ritual again. They rebuilt everything back around the coffee routine. They closed their stores for an entire day to re-train every barista. They created snacks and pastries to gain more share of requirements around coffee, launched sandwiches to stretch the coffee routine to lunch and created new versions of coffee to deepen love affair with the most loyal users. Let’s use the six elements of good strategy to see how they did this.
- Vision: Cherished meeting place for all your quick service food needs.
- Focus: Build around the coffee ritual, but look to shift the coffee routine to both breakfast and lunch. They built a broader portfolio of products–refreshing drinks and delicious deserts, snacks and sandwiches around these two time-slots.
- Opportunity: Starbucks had the under-utilized bricks and mortar of their restaurants going almost un-used past 11am. Driving a broader portfolio would own more share of requirements, while moving the ritual to lunch allowed them to drive higher same store sales from the same real estate investment.
- Early Win: Starbucks launched series of new products that made Starbucks seem big on innovation, including sandwiches, wraps, pastries and cookies, all with high quality and successfully connecting with the most loyal Starbucks fans.
- Leverage: The leverage point was turning a coffee routine into a breakfast/lunch routine, expanding the life ritual of Starbucks so that it’s now a broad-based meeting place for breakfast and a light lunch.
- Gateway: Starbucks is no longer seen as just for coffee, but rather an escape at any point in the day. Most Starbucks are now open till Midnight. Sales have grown double-digit each of the past 5 years and the Starbucks brand is one of the most revered and beloved with consumers.
If you were to write the Starbucks, here’s how it might look;
- Vision: Cherished meeting place for all your quick service food needs
- Goals: Increase Same store sales, greater share of requirements from Starbucks loyalists
- Key Issue: How do we drive significant growth of same store sales?
- Strategy: Move Starbucks loyalists to lunch with an expanded lunch menu.
- Tactic: Exotic refreshing coffee choices, light lunch menu, increase desert offerings.
Here’s a checklist to see if your strategy is fully mapped out and not left to some vague chance of success.
- An end in mind vision, pathway that has milestones, specific goals for your program.
- Opportunity that creates an opening for your brand to quickly take advantage of.
- Pin-pointed focus of your resources (effort, investment, time, partners)
- An early win as the breakthrough point.
- Game changing Leverage point, where there is a change in positional power and you’re able to turn a small win into something big.
- Gateway to something bigger, defined as a win for the brand that translates into an increase in power or value.
Strategic Thinkers see “what if” questions before they see solutions.
At Beloved Brands, we run a Brand Leadership Center to train marketers in all aspects of marketing from strategic thinking, analysis, writing brand plans, creative briefs and reports, judging advertising and media. To read more on strategy, here is a workshop on HOW TO BE THINK STRATEGICALLY, click on the Powerpoint presentation below:
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