strategy – OPEN

Strategy and the UK General Election 2015

Image: Poor taste or poor strategy? A mug bearing one of Labour’s 2015 election pledges.

I’m interested in the role strategy played a role in how the parties behaved in the General Election that has just concluded. Strategy – when it is done well – gives organisations a clear answer to the question: how can I use the limited resources I have to achieve the result I want.

Looking at strategy won’t give us all the answers to why the election result was a surprise – when 45 million people get to make a decision together we should be careful to remember what John Tooby calls “nexus causality” (in layman’s terms explanations for events are never as simple as we’d like to think).

Comparing two accounts of the strategy of the two main parties – Labour and the Conservatives (now the two main parties in England, at least) there are signs that one got its strategy very right and the other very wrong.

Discussing the Labour strategy, Martin Kettle in the Guardian says:

It has always been clear that Miliband has been following a targeted electoral strategy. The generous view is that he believes that, after the financial crisis, there is a winning coalition to be built from core Labour voters, disillusioned Liberal Democrats and middle-class sympathisers with the poor. But last night it became clear that this strategy has quite simply failed.

If this was the Labour strategy it was a wishful thinking at best, at worst it was a vague vision passed off as a strategy. People think that visions are a good thing in strategy, often mistake them for strategy, but in the merciless, street-fighting reality of an election, visions are messages, stories to inspire, they are not effective ways of focusing resources.

The analysis was vague, the resolution equally so. No matter how much energy and resources Labour activists could muster it was going to be squandered on a “strategy” that had a lack of focus and direction.

Labour should publish it’s failed strategy, if it really had one, so that Miliband’s successors can learn from their mistakes.

The failure of Labour’s approach is even strarker when you compare it with the actual focus and discipline of the Conservative strategy, planned and delivered by political consultant Lynton Crosby and Chancellor George Osborne.

Here’s Kiran Stacey in The Financial Times on how the Tory campaign began:

Despite polls showing the Tories in a dead heat with the opposition Labour party, Mr Crosby was in ebullient form. “He told us everything was in our favour,” says an MP who attended. “As long as we made the campaign about the economy and Labour leader Ed Miliband’s weakness.”

Mr Crosby, who cut his teeth in the world of macho Australian politics, had studied the data and knew victory was in the Conservatives’ grasp if they could just win over a few thousand voters in a few dozen marginal seats in England.

What the Conservatives did was deliver well on both halves of the strategy equation: the analysis and direction were right, but then they implemented their plan without losing their nerve even when almost everyone else was telling them they were wrong.

This election was a very close run thing – for all the rejoicing in the blue camp about a majority, it is still wafer thin. Nonetheless, it is far better a result than anyone, bar the leadership of the campaign expected.

Confidence in the strategy waxed and waned in the tense six weeks that ensued — and the strategy itself sometimes wavered. But yesterday morning his approach was vindicated as the Conservatives confounded expectations by sweeping not just to victory but to a majority in parliament.

“The campaign managers were always confident that we could get there, but that confidence was not always shared at the top,” says a Conservative strategist. “Lynton was right all along.”

The Tories learned from their mistakes in 2010 and ran a more focused, consistent campaign in 2015. Labour did not learn from 2010 – it just replaced its leader and substituted wishful thinking for strategy.

People who are disappointed with the General Election result would do well to push for more effective leadership and better strategy from the Labour party. As professor of strategy Richard Rumelt put it in a paper on bad strategy for McKinsey:

The only remedy is for us to demand more from those who lead. More than charisma and vision, we must demand good strategy.

A final point on leadership. There was a strange trope on Twitter along the lines of “if only people voted for policies and not personalities”, as if the ability to develop and then deliver policy would be completely separate from personality. We may not have presidential elections in the UK, but backing a party is rightly affected by voters’ views on the leadership and whether they would be an effective leader for the UK.

New leadership might be hard to come by without a lot of new recruits to Labour, if we’re to believe Paul Mason of Channel 4 News the party hasn’t got the right people to think this through:

Miliband’s inner team had almost no outriders in the press, no co-thinkers in academia; they had support among artists and film directors, but always half-hearted….

Labour […] is waking up to something much worse than failure to win. It has failed to account for its defeat in 2010, failed to recognise the deep sources of its failure in Scotland, and failed to produce any kind of intellectual diversity and resilience from which answers might arise.

Ironic to think that a party that values diversity suffers from a lack of diverse brain power. It certainly needs to promote political and intellectual immigration into its own ranks if it is to rebuild its ability to win elections.

‘The three stages of digital transformation’

Newspapers were among the first businesses to feel the full disruptive force of digital. But they aren’t unique. Best to to watch their struggle, and learn from them, whatever line of work you’re in.

Adam Tinworth’s analysis over at Journalism.co.uk of how print publishing businesses is, then, interesting both for what it says about that sector, but also because you can broadly apply it to most other industries:

Broadly speaking, I think we can place pretty much all traditional print businesses making the move into online publishing into one of three categories: Additive, Replicative or Transformative[….]

Additive […] They are still doing what they used to do – publishing a print product that is much as it’s always been – but also creating a digital product that contains additional material. […]

[Replicative] You’re not doing anything substantially different from what you were doing before, but are instead just publishing it in more channels.

[Transformative] Surviving at this level requires a massive rethink of the organisational structure of the whole operation.

“Digital transformation” programmes are too often not transformative. There’s a proclamation by a board – everyone cheers for a bit, does some training, and then gets back to business as usual and hopes for the best. As Adam goes on to say:

Hitting the transformative stage means letting go of the idea that we’re an organisation that exists to publishing a newspaper/magazine/website and focusing on the idea that we exist to produce journalistic content for a particular audience.

Substitute the middle bit and this is the same crisis of strategy and culture that almost every company being challenged by digital is facing. The answer for all of them begins with a customer-first approach, I believe. Beginning is really, really hard though – and it may be the easiest part of the process.

The market with no name (yet)

There’s a gap in the market for agencies and management consultancies. Or rather, there’s a gap between their two markets which is growing.

Last year I talked about the need for marketing agencies to “become McKinsey faster than McKinsey can become us”. Since then we’ve seen both industries begin to encroach on one another’s territories.

Witness the big management consultancies efforts to win in digital:

Accenture’s purchase of Fjord.
Deloitte Digital’s acquisition of digital agencies.
Last month’s buying of Australian digital consultancy Stamford PWC.

Is there any action in the other direction? Well, we’ve not seen WPP or Omnicom buying management consultancies just yet, but there are plenty of people who would have been seen as belonging to the marketing-advertising complex taking up positions in management consultancy-land:

Econsultancy offers training and consultancy on digital transformation.
Fluxx’s positioning as a “product and innovation agency” is also interesting. Formed of people from a digital agency background, and EMC’s consulting wing, it appears to be a management consultancy that works with a tech-savvy, agile method.
Brilliant new ideas like Adaptive Lab’s positioning as “start-up as a service” or a “skunworks-for-hire”. This can be used to develop apps and experiences for marketing – but products are about more than shiny-thing to grab the consumer’s attention – they can be businesses in their own right.

And, of course, Brilliant Noise, my own agency, with our “Customer First, Earn Advocacy, Transformative Digital” mantra – a year ago we saw ourselves as marketing spilling out into the rest of the organisation, an outcome of the need for marketing to be more connected to succeed, and of the disruption of ideas about how organisations work that the web is causing.

Digital transformation

Let’s take a closer look at this phrase – arguably a re-badging of the clumsy “social business” tag, following on from whatever it was before. A bit clue-trainy, very tech-savvy.

Zipcar – idealism and the realpolitik of scaling a business

Very interesting article about Zipcar’s turnaround strategy on Inc. Worth reading for the insights on growing a business by the numbers, but also the story of a company founded on strong ideals, that had to change leadership to get beyond being a good concept with laudable values.

Zipcar was one a pioneer in what some now call “collaborative consumption”, started by a pair of idealists who wanted to cut carbon emissions through car sharing.

Now Zipcar is fulfilling the dream of the founders to the tune of US$100 million dollars a year. The cost to them – only one member of the original team still works with the company, and itsn’t either of them. The hard-nosed, metrics-focused CEO who took over the company when it was making a a loss, took up the challenge from one of the board members to “turn a political movement into a business”. He succeeded.

The article emphasises the things the founders got right (a lot, especially branding and positioning). But they couldn’t turn it into a profitable, fast-growing company. Scaling Zipcar required someone with more of an operational view of how the world works.

Sometimes activists make good entrepreneurs. They get things started, they have same will to power and vision that drives good entrepreneurs. To truly scale sometimes takes the business equivalent of engineers, though – business-first people.

Is your digital strategy in the past, present or future tense?

In April this year, a Gartner survey asked exectuives “what is digital strategy?” – the analysis they developed from the answers is interesting.

According to an article in Information Age, the study found that people were using the phrase to describe three things, or three times –

The recent past: Some are fixed on e-commerce and e-business (a 90s term) . These are driven by a fear of failure

The now: Concerned with social, mobile and the cloud. These executives are driven by wanting to appear up to date, on top of the latest developments.

The near future: People thinking about digital strategy in this mode are concerned with what is about to be possible, as “products and services themselves become digital”.

Especially interesting to note the three definitions of digital strategy.

Much more useful than the “whee! No need for digital any more” sentiment.

http://www.information-age.com/it-management/strategy-and-innovation/123456955/what-is-a–digital-strategy–

What a business means when its says it has a ‘digital strategy’ therefore depends on whether they are trailling the pack, engaged in the present, or looking to the future, Raskino says.

Eventually, though, all business must look to the future, in a way they haven’t had to for the last 15 years, he adds.

“Businesses have had a decade and a half of packaged innovation,” Raskino argues. “They’ve just said to the IT suppliers, sell me the next thing I need to install to upgrade my business, whether it’s supply chain optimisation or customer relationship management. But that’s finished – there’s nothing left to sell at that level.

“Now businesses have to invent their own future.”

I wonder what type of digital strategy your and your clients’ businesses are concerned with?

Business model prisoners

While most companies become prisoners of their business models, one way to deal with this is to have a strong strategy that means you know when shift to new models and products when the time is right.

Broadstuff’s “All you need to know about Apple in 3 easy steps” suggests that the Cupertino giant may have this kind of strategic fortitude, with the consequence that financial markets get huffy because it means quarter-on-quarter performance is not the first priority.

look at Apple over 35 years and you will see that they:

1. Are typically a very early entrant, integrating a variety of existing systems in a hitherto poorly served early adopter sector with promise, to create an easy-to-use product.

2. Use great design to create a demand for a high margin product. In recent years they have also become “cuter” at doing software as well as hardware after being caught out by the MS-DOS ecosystem

3. As that market matures, retreat to the highest profit quartile. Follow the money, not the volume.

So great has been Apple’s performance in recent years that the markets have created their own expectations bubble about performance.

Artefact Cards and liminal states: creative thinking breakthrough tools

There’s a long, long list in my subconscious that I hardly dare look at: Things I Should Have Blogged.

The items comprise three types:

Important ideas that have taken up residence in my head. For instance, liminal states.
Useful tools and ways of working. For instance Artefact Cards.
Opinions taking shape. For instance, just because a system like digital advertising is corrupted doesn’t mean it won’t be with us for decades to come.

I may come back to the third and pot it out in the nursery of ideas here on this blog, with a media agency-proof fence around it to give it a fair chance of developing or not, but for now I’ve got a chance to right the first two examples in one post.

This week, I had a lovely conversation with John Willshire, who developed the Artefact Cards product, about how I have been working with them. You can listen to the whole thing here as John recorded it with a very snazzy microphone and iPad Mini set-up.

Artefact Cards are a really simple tool. Playing card size bits of card, white on one side and coloured on the other. You draw words and pictures on them with a Sharpie pen and them lay them out, re-arrange them and in this way organise thoughts and ideas.

As we talked, we got onto the subject of the liminal state in the creative thinking process (which for my money includes developing strategy). My friend Jim Byford introduced me to this immensely useful concept.

In the context of creative and strategic thinking, the liminal state is what you find yourself in just before you have a breakthrough, or just before you fully understand something, make it yours. For instance, if you can recall trying to learn your lines for a play, the liminal state is where you are just before the words settle and take up residence in your memory – and then you can start using them, adding your inflections and emotions, making them your own.

I’ve very often found the thinking at this point in the creative process intensely uncomfortable. Whether writing a book or a plan or a pitch – it’s a kind of temporary agony, a dark tunnel I pass through where I think you know nothing and will never have another good idea again, and then it passes and there’s the the idea I need, the answer that fits.

Knowing that this is something called a “liminal state”, it makes it easier to handle. In psychology / neuroscience, this is an example of “affect labelling“. If you can name the feeling you have, you can put yourself slightly outside it, understand what is happening to you and that it will pass.

The other thing that understanding the liminal state does is help you to stop trying to “jump to the answer”, as Jim put it to me. Because liminality feels uncomfortable, you want out – to end the feeling and go with the first idea, the obvious one, the easy one. The danger here is that your creative/strategic solution will be mundane, run-of-the-mill and doomed.

You have to go through the confusion, live with it for a little while, sit still while the ideas and thoughts, disconnected and jagged, whiz around your head.

Then they settle. Then you see it: what it is all about.

It’s simple, it was there all along… as Duncan Watts points out, it feels obvious once you it is something that you understand. You pitch it to yourself: it works. You pitch it to a colleague: they don’t hate it, maybe even like it. With each airing the idea gains coherence, legitimacy – becomes more eloquently and credibly articulated as you and others breathe belief into the thing.

Speaking with John Willshire about how I had been using his Artefact Cards, I realised that I like them because they are a good tool for helping that settling process, of working steadily through the seemingly nonsensical maze of thoughts, ideas and concepts and helping some kind of order emerge. Much like throwing down ideas on a white-board, scribbling out mind-maps or any other visual thinking method – but they feel slightly more agile – you can move ideas around, try them in different shapes more rapidly.

In the example I talk about, it’s not even that I reached the solution – the outline of an ebook in this case, but I was able to move on to that only after I had made sense of all of the ideas. Seen their shape laid out in this way. That’s something John says is a recurring theme in people’s use of the cards – seeing the “shape of ideas”.

Artefact Cards are another tool in the box for thinking, perfect sometimes for working through those liminal states. Worth a spin with the trial pack, I reckon.

All episodes: Netflix and strategy

An imperious Kevin Spacey as Francis Underwood stares down at the pedestrians in Times Square from this billboard for House of Cards.

I like this poster in several ways.

Immediately, of course, it reminds me of the series, which I watched with Mrs M a couple of weeks ago. A lot of fun – I’m looking forward to the second season.

If you read it closely, however, this advertising hoarding is marking a little moment of media history. There are ads for TV shows everywhere in this part of mid-town Manhattan, but they are all different to this one in one crucial, industry-shaking detail – as well the date, it says “ALL EPISODES”.

It’s not a series you would have to follow week after week. It’s a complete series available all at once, to be consumed at your own pace, in bursts or a binge if you want, habits we’ve grown from watching box-sets.

This was a show I watched in the UK at the same time as everyone here in the States. Often when I visit New York the ads are for things I won’t watch for months yet – Mad Men, for instance. House of Cards, as I’ve already said, I’ve already seen. The whole thing.

The series (which is worth a couple of months of Netflix subscription fees alone, was the first show that the company commissioned as original content.

Which brings me to the last reason that this poster made me smile. It reminded me the most powerful articulation of strategy I have heard recently – when Netflix’s Chief Content Officer, Ted Sarandos said:

The goal is to become HBO faster than HBO can become us.

That punchy statement is not on the poster, but it is a kind of silent strap-line, an implicit message every bit as loud as “Only on Netflix”.

It’s a brilliant strategy because it is active, immediate, clear and gives not only direction but an imperative.

HBO will be coming after online on demand audiences with their catalogue of amazing content – Netflix’s best chance of success is to learn the trick of building loyal, slightly addicted audiences for original content of their own.

Lazy narratives and how to be wrong

Apple-bashing is a game a lot of people these days.

John Gruber at Daring Fireball is challenging the emerging narrative of the company’s inevitable decline after the death of Steve Jobs.

Apple was far from perfect under Steve Jobs. But in hindsight, critics and skeptics of the company now see fit to deem his reign flawless or nearly so. Here’s a guy on Yahoo Finance telling Henry Blodget that “Steve Jobs wasn’t wrong about anything ever.”

What you want is to be (1) right more often than wrong; (2) willing to recognize when you are wrong; and (3) able and willing to correct whatever is wrong. If you expect perfection, to be right all the time, you’re going to fail on all three of those — you will be wrong sometimes, that’s just human nature; you’ll be less willing or unwilling to recognize when you’re wrong because you’ve talked yourself into expecting perfection; and you won’t fix what’s wrong because you’ll have convinced yourself you weren’t wrong in the first place. The only way to come close to being right all the time is to be willing to change your mind and recognize mistakes — it’s never going to happen that you’re right all the time in the first place.

There’s some wisdom for us all in that…

Team GB Cycling and the magic of marginal gains

Over the summer I developed a bit of an obsession with Team GB Cycling, like a lot of people.

How did they become so successful? So successful that the game for a lot of the other athletes became how to stop Team GB winning, the spiteful whelps…

Dave Brailsford cuts an interesting figure as a leader and is a good place to start trying to answer that question. Look at his obsession with detail, but resistance to becoming a micromanager. His philosophy was – and is – ask: “how do we get people to be the best that they can be?”, and then apply the answer to cycling.