Refrigerator Casserole

THE STORY
I love to cook. However, I could not follow a recipe in a cookbook to save my soul. I always seem to mess up when I try to follow a recipe (I had the same problem in chemistry lab in college).

Instead, over time and through experimentation and observation I have learned how various ingredients tend to work together (or not work together). From this I have just developed a knack for putting food ingredients together.

One of my specialties is what I call “refrigerator casserole.” The way this works is as follows. First I look in the refrigerator to see what ingredients I already have. Then I try to figure out what one could possibly make out of what is at hand. Finally, I put together what is available in the tastiest way I know. Usually, it works out fairly well.

Each time I make it, it turns out different, because what I have in my refrigerator varies over time. But in the end, it is usually quick (didn’t have to make an extra shopping trip) and relatively inexpensive (uses up leftovers in an exciting way).

When my children were younger, they would complain about my home cooking because “it didn’t taste like the stuff that comes in a box.” To them, food from a box was the standard of what something should taste like. Eventually, I must have had some impact, though, because my son eventually went to chef school and now works in the restaurant industry.

THE ANALOGY
Some people see strategic planning as being like following a recipe in a cookbook. It’s one of these “just tell me the eight steps of what to do and I’ll do it” sorts of mentalities. Great strategies rarely come out of “strategic cookbooks.” Sure, there are lots of books out there that claim to have the secret of how to create the perfect business strategy. Just follow their formula and, supposedly, success is assured. But I have not found this to be the case.

Instead, strategy is more about nuance. It’s about understanding who you are and what is unique about what you have to offer. The task is to take that internal uniqueness and find a way to profit from it. In that way, strategy is more like my refrigerator casserole. You look inside your business (your strategic refrigerator) to see what you have, and then you try to make the tastiest strategy with what you’ve got.

Okay, so the process may not look like it came out of a box, but real life is a lot messier than the perfect worlds portrayed in those “How To” books on strategy. We don’t always have all the time, money and resources to make things like they do on those fancy cooking shows on TV. The same is true about business strategy. The goal is not the perfect meal, but rather the best meal given what we’re starting with.

THE PRINCIPLE
The principle here is getting the right balance between standardization and personalization in your strategy. Today, we will talk about personalization. In a later blog we will talk about standardization.

Personalizing a strategy is the process of determining what unique strategy is right for your particular organization. As the great strategist and Harvard Professor Michael Porter likes to put it, strategy is about finding a way to do things differently. If your go-to-market strategy is just like everyone else’s, then you have not given people a reason to prefer you. And if people do not prefer you, then all you have left in order to get them to give you their business is “bribery” (legal bribery). In other words, without uniqueness, you have to buy the patronage of your customers with added discounts or added services that exceed the bribery your competition is using to reach those same customers. This usually leads to an unprofitable situation.

However, if you provide some unique angle to the business, potential customers who prefer that type of uniqueness will flock to your business without the need for excessive “bribes.” The best ways to differentiate yourself are in areas that are hard for others to copy. That makes it easier to “own” the differentiation for a long time.

Usually, the best place to look for that kind of sustainable uniqueness is inside your organization. It is found through understanding the odd little quirks about your business and how you do things. The little nuances that nobody else knows about are often the beginnings of a great strategy. It’s like the refrigerator casserole…a tasty treat made from the unique set of ingredients you have at hand.

The big fancy strategy consultants don’t like this approach, because it isn’t a simple cookbook approach. It doesn’t come from a prepackaged box. You cannot find it by bringing in hoards of freshly minted MBAs who grind out a lot of numbers. Instead, it comes from an intimate knowledge of what makes your organization tick and what makes your industry tick. When you find a way to use that uniqueness to your advantage in your industry, you have a winner.

Let me give an example. Someone dug roads and storage units into the side of a mountain in the middle of nowhere in southern Indiana. A new owner took over the operation, figuring he could do a little local warehousing with it. Unfortunately, because the mountain was in the middle of nowhere, there was not a lot of call for warehouse space.

So then the owner started thinking about the uniqueness of his storage facility. Deep into the mountain, the temperature stays constant all year long…same in the summer as in the winter. In addition, it is a nice cool temperature, almost like refrigeration. After doing some research, he found out that this is the ideal environment for storing tires. So now, out in the middle of nowhere, he runs the largest tire storage operation in the world.

This same environment is also good for storing food. So out in the middle of nowhere, he has one of the largest warehouses of US Government army meals to be found anywhere.

Because it is so dark inside the middle of the mountain, he has experimented with bringing in clients who need to store things that shouldn’t be exposed to light. And on it goes. So out in the middle of nowhere, he was able to become a powerful warehouse operator, because he did research on the uniqueness of what he had and then pitched that uniqueness to others.

Arm & Hammer studied the uniqueness of their baking soda and learned that it had remarkable odor absorbing qualities. At first they thought this was a product flaw that needed to be overcome. But as they thought deeper, they realized that this weakness could actually be turned around into a strength. It opened a whole new growth opportunity for the company.

Heinz had a problem with its ketchup. It was too thick and people had difficulties getting it out of the bottle. They took this uniqueness and convinced the world that thickness is the defining characteristic of a great ketchup.

Perhaps your company has not invested in the latest efficiencies in mass production. Rather than try to copy the state of the art in your business and imitate the efficiencies of others, keep this in mind—just as you don’t have the great investment like the super-efficient operators have, they don’t have what you’ve got, either. And what have you got? Perhaps more flexibility—you can produce products through outsourcing anywhere in the world and go with whomever is best suited to produce that product. Or perhaps you can do custom work or small batch specialty work better than the mass producer. Perhaps while the competitor is putting all his or her resources into production equipment, you can put your resources into brand-building and create a more powerful brand than they have. Perhaps you are in a better position to create strategic distribution partnerships, because potential partners are not threatened by your manufacturing expertise.

This isn’t about finding some generic strategy in some strategy cookbook. Half the time, those cookbooks spout nothing but platitudes, like:

1) Have strong leadership
2) Empower and motivate your people
3) Work on continuous improvement
4) Be more efficient
5) Be focused

This is all well and good, but if you haven’t found that unique nuance that gives you the right to play in the game, it is all for naught. It reminds me of an old comedy routine from Steve Martin. If I remember correctly, Steve Martin claimed to have a foolproof two-step method for becoming a multi-millionaire.

Step #1: Get a million dollars.
Step #2: Invest it wisely.

It leaves out the most important part…where do you get the first million? That’s like those strategy platitudes that don’t tell you how to get the winning uniqueness.

The second problem with these cookie-cutter approaches is that they tend to describe generic strategies, like being a low cost leader or being the best in quality or something like that. Usually those generic positions are already taken, or there are many others vying for that same position. It is better to start with your uniqueness and then build into it quality or low prices. If all you have are lower prices, then you are vulnerable to anyone who can do it cheaper (and someone always seems to come along). But if you have something both uniquely desired, difficult to copy (because it depends on your unique capabilities) AND lowest prices, you have something that is not very vulnerable to attack.

SUMMARY
The best strategies are ones that provide desired uniqueness in the marketplace. The best uniqueness is the uniqueness rooted in the nuances of who you are. That is something that is hard for others to imitate. Don’t envy what is in the other person’s refrigerator. With a little creativity, you can whip up something good out of the ingredients you already have.

FINAL THOUGHTS
I’m reminded of a saying my father used to tell me. It went something like this: Most businesses succeed not because of great management, but because they have such a compelling business proposition that the management cannot screw up enough to stop it. Although this saying is a bit extreme, I think it points out the fact that if I have to decide between spending time and resources with consultants learning the latest fad in management excellence or spending my time coming up with a unique and compelling business proposition, I’ll spend it on the business proposition.