Strategy Planning Analogy #565: Not Enough Monkeys

THE STORY
There’s an old saying (originally attributed to Thomas Henry Huxley) that goes roughly like this: “If you get enough monkeys sitting at enough keyboards, one of them, by random chance will write the next Shakespearian play.” While that may be theoretically true, there’s a problem with that logic.

The problem is with the word “enough.” In order to get random tapping on a keyboards to come out as a coherent Shakespearian play, you need a lot of monkeys sitting at a lot of keyboards.

How many? I would guess at least a million times more monkeys than exist on the entire planet sitting at more chairs and with more keyboards than exist on the planet.

So, while the statement may be theoretically true, from a practical matter it is worthless.

THE ANALOGY
The big word in strategy today is “innovation.” People want strategies which make them leaders in innovation. And if that’s what people want, you can rest assured that countless numbers of consultants will come out of the woodwork saying they have a way to make you a leader in innovation.

A lot of these consultants have a theory similar to the story about the monkeys. They say that if you have enough experiments taking place, one of them will turn out to be a big hit. That’s like saying if you have enough monkeys, you can write a great play.

The problem is that many of these consultants don’t get very specific about how many experiments is “enough.” The reason they don’t get very specific is because they don’t want you to know your real odds for success. Like the story with the monkeys, the only way to guarantee that you will have a successful innovation is by doing a lot of experiments. And by a lot, I mean more experiments than you could possibly ever do over several lifetimes.

Look at the social media space. How many truly successful bone fide outstanding and hugely profitable innovations have there been in social media? 20? 50? 100? 1,000? Even if you are generous and say there have been a thousand big innovations, compare that to how many people on the planet have been experimenting around the world in this space.

There’s probably at least tens of millions of people world-wide who have tried on average dozens of experiments in the social media space. That would put us at about 1 in 500,000 being a hit. And I think that’s a very generous number. Do you think you can do 500,000 experiments in order to guarantee a winner?

So, while this type of response to innovation is theoretically possible, it is worthless on a practical level.

THE PRINCIPLE
The principle here is the difference between randomness and purposefulness. Randomness is about producing large quantities and hoping you beat the odds. Purposefulness is about focusing on ways to intentionally improve your odds in a meaningful way. Randomness is about repeating a lot of fast failures (and I do mean “a lot”). Purposefulness is about focusing on places where failure is less likely to occur.

Here are some characteristics of purposeful innovation:

#1: Purposeful innovation plays off your strengths

Even if you do beat the odds and by chance stumble upon a great innovative idea, you still don’t have a hit on your hands. You still have to develop it, bring it to market, and win versus others with similar ideas. The odds of random success at all five levels (ideation, development, operations, distribution and marketing) is really not in your favor.

As I alluded to in an earlier blog, even if you have a one in a million idea, there can be more than a million experiments in that space, so you have to fight to win against others with almost the same idea. The idea alone is not enough.

So if you want to succeed, you need to play to your strengths. Look for innovation only in places where you have competitive advantages in all of these areas. This means that you need to shut off innovation wherever your differentiating advantages do not apply.

This will narrow the innovation scope very quickly. But it will also increase your success very quickly.

Another option is to take away resources from random innovation and apply them to building competitive advantages. The more advantages you have, the better your odds of creating an innovative hit that will win.

I remember touring the area in Austin Texas where a lot of innovation start-ups were located. They all looked about the same to me. None of them were building differentiation capabilities. They were all just pulling all-nighters to get lines of code written. How do you expect to beat the odds if you are not doing anything meaningfully superior?

#2: Purposeful innovation looks for superior solutions to real problems

A lot of innovation focuses on applying the coolest new technologies in a spectacular way. These may be the types of innovations that make other engineers jealous of what you’re working on, but that doesn’t mean the rest of the world will care.

Consumers are looking for superior solutions to existing problems at reasonable prices. You need to ask yourself these questions:

1.  Once the coolness wears off (and it will, sooner than you think), is there any real substance to your innovation?
2. Is this just a short-lived fad?
3. What existing problem does my innovation solve? Does it solve the problem better than current options? It is superior enough to be worth the price you need to charge? Is it superior enough to overcome the barriers to switching from current solutions and networks?
4. Will consumers intuitively get what you’re trying to offer or will it be confusing and hard to explain? (Hint: If it takes more than a sentence or two to explain the superiority of your innovation, it probably won’t catch on.)

So the place to start is by finding where customers are complaining the loudest about the stress points in their lives. Then, you focus on looking for better ways eliminate these stress points. This means putting solution solving ahead of just looking at what the latest technology can do.

#3: Purposeful innovation avoids imitation

Facebook has been very successful. But that doesn’t mean that a copycat of Facebook will also be successful. That innovation has already been done. That market has already been captured.

Even if your innovative imitation of Facebook is a little bit better, it still won’t win. The network effect will keep people from switching for only minor improvements.

Almost by definition, true innovation is not a close copy of what already exists. It is doing something different. The blue ocean approach says it is easier to succeed in places where there is no established market/solution than one which has already been staked out by a host of competitors.

Imitation may be a sign of flattery, but it usually is not a path to success, especially when you need to get people to switch networks.

SUMMARY
Great innovations can often lead to success. Unfortunately, most experiments in innovation will be failures. The odds of randomly stumbling into innovation success are about as likely as having a monkey randomly write a play on a keyboard. Rather than rushing off to do as many experiments as possible, it is wiser to take a moment first to determine a strategic focus for your efforts. Narrow the scope to improve the odds. This is purposeful innovation. Purposeful innovation narrows the scope by: 1) Looking in places that take advantage of competitive strengths; 2) Looking in places where you can provide a superior solution to current problems consumers are complaining about; 3) Not looking to imitate what’s basically already out there.

FINAL THOUGHTS
Good fishermen know that you are more likely to catch fish if you fish in locations where there are more fish to be caught. They don’t just randomly fish anywhere. They go where the odds are better. Innovators should do the same thing.

Strategic Planning Analogy #421: Tapping the Power

THE STORY
One year for Christmas I decided to put up a larger than normal Christmas light display in my front yard. I bought all sorts of new items to place in my yard, including a metal deer covered in lights with a motor that made its head go up and down.

Everything worked fine for a few days. Then it stopped working. The lights went out and the motor stopped working. I spent many hours over many days going over everything in the front yard trying to get it to work again. I assumed that something in the display was broken, so all I need do is fix the display and everything will be fine.

So I spent hours looking for the brokenness in the display. I wiggled all the wires in the display. Nothing helped. For the rest of the season, the display at my house was dark and lifeless.

After Christmas, I started to take all of the lights and displays down. It was then that I saw a switch in my garage that I had never noticed before. It was a circuit breaker switch. I pushed the button, and all of a sudden the remaining parts of the display began to work.

If I had only spent a second at the beginning of the season pushing that button in the garage, I could have saved all of those many hours wasted in the front yard trying to get that display to work.

THE ANALOGY
My goal was to have a great Christmas light display. Therefore, that is where I focused my efforts. When my goal was not being achieved, I spent my time looking for a solution somewhere in the display.

Unfortunately, the problem was not hidden within the display. It was back behind the scenes in the garage. Had I only taken my eyes off the goal, I would have seen that the display was fine and that the problem was that there was no electrical power getting to the display. Had I spent more time thinking about the power behind the display, I would have had a working display that year.

A similar situation can occur in strategic planning. We can get so focused on our strategic goal that we forget about looking at how well the goal is connected to the corporate energy source. Since the goal is what we want, we look at fixing the elements of the goal when results fall short. This can all be a waste of effort, since the problem often is a result of insufficiently tapping into corporate energy. Turn on the power of the organization, and the results will come on their own.

THE PRINCIPLE
The principle here is about discerning the difference between power and performance. Performance is the output—it is what we want to happen. It is our goal. Power, by contrast, is the input—it is the energy needed to accomplish the goal.

Strategic planning is usually pretty good about managing the performance. It helps us decide what we want to happen (goals) and how we are going to measure the results (metrics). Many times, however, the process comes up short on managing the power. It doesn’t go behind the scenes to ensure that sufficient energy is focused on the plan.

Power is often just assumed to be there. Just set the goal and the work will get done. Therefore, all the effort is spent on getting the right goal and measuring the progress towards the goal. Nobody bothers to go back into the garage to make sure the power switch is set in the “on” position.

The real problem occurs when performance falls short of plan. If you focus only on the performance, you may not be able to fix the problem, because the cause may be insufficient power.

For example, let’s say that you have a goal to achieve dramatic sales growth for a particular product and performance is falling short. To fix the sales problem, you may look for a sales solution. You may look to change the advertising, or change the pricing, or start a new sales promotion, or some such similar tactic. This would be similar to when I tried to fix my Christmas display by tinkering with pieces of the display. And, like with my Christmas display, all those efforts may not work.

However, if you stepped back to consider the power in your organization, you may have found that there was nothing wrong with the original plan (as far as it went). Instead, the problem was insufficient motivation amongst those required to do the selling (not enough power). Perhaps they do not believe in the product. Perhaps they have put their power behind a different product in the portfolio. Perhaps they just aren’t motivated to work hard because they feel no loyalty to the company. If you fix the power, the performance will come all on its own, because highly motive employees can accomplish much.

Problem #1: No Power
There are two ways in which a company can mismanage power. First, they may not create sufficient power. I have personally witnessed how much performance is impacted by the level of power running through the employees.

For example, I worked with a company that used to have a lot of power flowing through the employees. They were highly motivated to “do whatever it takes to win.” They loved the founder and would go the extra effort in response to that love. The place felt like a family and everyone worked hard for the good of the family. The power was huge and performance was outstanding.

Then something happened—the founder retired and the new leadership destroyed the feeling of family. As a result, work became nothing more than just a job. People went from voluntarily working 70 hours a week (because they loved doing it) to working only 50 hours a week. The energy levels during those 50 hours went down as well (because they didn’t love doing it as much and they didn’t care as much). The power of family love was replaced with unproductive in-fighting. Personal goals replaced doing whatever it takes for the greater good. And, not surprisingly, performance started to suffer.

The company is scrambling to find ways to get performance back up. But the focus in on adjusting the tactics rather than the power behind the tactics. As a result, they are fighting a losing battle.

In essence, the company had unknowingly turned off the switch in the garage, not realizing how much impact that would have on the display out front. And now they are trying to fix the problem by tweaking the display rather than turning the switch back on.

By contrast, I had the privilege to work in the past with the employees of Save-A-Lot, a hard discount, low price food retailer similar to Aldi. When you walked into the Save-A-Lot headquarters, you could feel all the energy and buzz around you. The power switch was on full power.

When you talked to the people, the conversation wasn’t around doing a job of pushing groceries at a profit. Instead, people talked in terms more similar to a religious revival. They talked about the pride they had in providing a higher standard of living to those who society tended to overlook. They talked about bringing “greater dignity” to the poor by packaging the food products to look like the brands the rich people ate. They not only wanted to feed these people, but improve their sense of self-worth. It was as if they weren’t grocers, but missionaries on a mission to save the poor from malnutrition and humiliation. They were united in purpose and focused on this larger, more personal motivation. And guess what? This power lead to great performance.

To achieve high levels of power, you need to supply high levels of purpose. This purpose needs to transcend just working for a paycheck. It requires tapping into the inner desires of your people. This concept seems to be taking on greater significance, as the Millennials who are now entering the workforce seem more focused on this greater purpose than the Baby Boomers they are replacing. If you do not provide a greater purpose, you will lose a lot of the power potential in the Millennial segment.

Strategic Planning can help by infusing a higher purpose into the Vision and Mission Statements. Planners can help ensure that strategic processes not only looks at managing performance, but also proactively manages power. They can make sure that power issues get sufficient attention.

Problem #2: Power Unlinked
Even if the company is full of power, performance may still suffer if there is insufficient connection between the power and the performance. My Christmas display only worked when plugged into the power source in the garage. Similarly, strategists need to connect the strategy to the power in the people.

Strategists need to show how the strategy is connected to the higher purpose. They need to show how achievement of the strategy not only improves performance, but improves achievement of the higher purpose. They need to show that putting effort behind the plan gets them closer to the higher purpose that doing something else.

SUMMARY
Often, the best way to ensure that strategic goals are met is to take your focus off the goals and focus instead on ensuring that the organization is powerfully motivated to achieve the goals. This typically requires bonding with employees at a deeper level (than merely meeting the goals) by instilling a higher purpose into what people do. The higher their motivational power, the more likely the effort will be there to get the task accomplished. If you can connect that power to the task at hand, then the results will pretty much take care of themselves.

FINAL THOUGHTS
This deeper bonding can also work with customers. If consumers identify with your higher purpose, then they will want to support your efforts by purchasing from your company. This can lead to higher unit sales volumes at higher prices.

Strategic Planning Analogy #401: Adrift at Sea

THE STORY
Suppose, for a moment, that you took your company out for an ocean cruise. While on the cruise, there was a terrible storm and your ship sank. Now, you and your senior team are all on a tiny lifeboat out in the middle of the ocean, adrift at sea.

You realize that this is a serious problem, so you decide to hold a strategy meeting on that tiny lifeboat.

“Ladies and Gentlemen,” you begin. “We have a serious problem here. We need a strategy to get out of this mess. The first order of business will be to come up with a strategic goal. My suggestion is that our goal should be to reach land. Any objections?”

Everyone agrees that reaching land is a good goal.

“To get to land,” you continue, “we need to move the boat. Therefore, I want all of you to work on tasks to move the boat. That will be our strategic tactics”

So everyone started to do whatever they could to move the boat. People took whatever they could find to act like an oar. Then they leaned over the side of the lifeboat to use their makeshift oar.

However, since nobody knew where the closest land was, everyone just started rowing in random directions. Worse yet, everyone was rowing in a different direction. As a result, the boat just went around in circles.

Looking at the mess, you finally conclude, “You see? This is proof again of why I don’t think strategic planning works. We’re working hard but not getting anywhere.”

THE ANALOGY
It seems that this experience on the lifeboat is not all that uncommon. According to a recent survey by Booz & Company, a lot of executives have come to a similar conclusion about the planning activities at their companies. The survey found that most of the executives (53%) don't feel their company's strategy will lead to success.

What does that say about the power of strategic planning if most executives do not have confidence in their company’s strategy? It’s a black eye to all strategists that the confidence in the industry has sunk so low. We’re sinking like that cruise ship.

Now it’s easy to see why the strategy on the lifeboat was so awful. The goal and the tactical directions did not provide any useful guidance. All it led to was random, useless activity. As we will soon see, a lot of business strategies are almost equally as useless.

THE PRINCIPLE
The principle here is that when strategic planning doesn’t get you where you want to be, it is not because strategic planning doesn’t work. Instead, the problem is that you have a lousy strategic plan. A bad strategic plan is like an inaccurately drawn map. It may look like the real thing, but it is useless.

We need to raise the standard of strategic planning and no longer accept lousy plans. They’re hurting the image of the profession in the eyes of top executives. Listed below are some clues that your strategic plan is leading to a disaster like the one made in the lifeboat.

1) You May Be Adrift At Sea
One of the most important outcomes of a strategic planning process should be an understanding of a company’s reason for existence. If you do not have a reason for why customers should prefer you, then you should not be surprised when customers choose not to patronize you. This is why I said recently that this is the most important question you need to ask in a planning process.

You cannot fulfill a purpose if you have no purpose. And if you have no purpose, then expect your strategy to fail. Without a purpose, you are like that lifeboat—adrift at sea, bouncing around wherever the waves take you. You will never make it to shore.

So the first thing to do is check if your strategy is built on a foundation of purpose—a reason for existing in the marketplace. Companies adrift never win. In the Booz survey, only one in five (21%) executives think their company has a "right to win" in all the markets it competes in. You cannot solve this problem until you give your customers a reason to want you to win—a purpose linked to their desires.

2) Your Goal is Too Vague
Now you may be saying, “Wait! I have a purpose. My goal is to provide great returns to my shareholders…or my goal is to grow sales at 20% per year…or my goal is to be a leader.”

These goals are no better than the goal in the story of wanting to “reach land.” It is too vague. Where is the land? Which direction do we need to go? What does it take to get there? What do we need to get there?

Vague goals like sales targets or return on investment are focused on the outcomes which benefit one’s self. They do not address how or why those results should occur (ignore the cause for those outcomes). The only way to get sustainable sales or profits or leadership is by pleasing the customer. Unless your goal addresses how you are specifically benefiting the customer, then there is no guidance in how to get those sales or profits or leadership. You are still adrift at sea.

Check your goals to see if they are specific enough around how you are going to please the customer. If the goal is too vague, then you probably have a lousy plan.

3) Your Tactics Are Poorly Aligned
In the story, everyone was paddling in a different direction. As we all know, if you want a boat to move efficiently in a singular direction, you need to have everyone paddling in that one direction. The same is true for tactics. If they are not aligned towards the purpose, it will never be reached.

According to the Booz study:

- Two thirds of the executives (67%) say their company's capabilities do not fully support the company's strategy and the way it creates value in the market.

- Almost two-thirds say their biggest frustration is "having too many conflicting priorities."

- 82% say that their growth initiatives lead to waste at least some of the time.

These survey answers would seem to indicate that there isn’t a lot of tactical alignment going on out there. Too many companies have too many paddles moving in too many directions.

No wonder these people don’t trust their strategy. It is having no meaningful impact on what people do. There are too many so-called “strategic initiatives” out there which aren’t properly linked to the big-picture purpose.

For a strategy to be effective, it needs to provide a focus to what people do. It needs to show what to do as well as what not to do. It needs to be a beacon light showing the way, so that everyone knows the direction in which to push their efforts.

And even more important, it needs to help prioritize what is to get done. It is impossible to be effective at simultaneously working on 20 different key strategic initiatives. That is too many. It will cause too many conflicting priorities. Most companies can only handle four or fewer key strategic initiatives at any given time.

Is your strategic planning process:

a) Getting everyone to move in the same direction (towards your purpose)?
b) Getting everyone focused on the same few top priorities?

If not, you may have a lousy plan.

SUMMARY
If you are upset with your strategic planning, don’t blame the concept of doing planning. Instead, blame the lousy quality of the plan. Instead of rejecting the idea of doing planning, change your approach, so that you are producing quality plans. Signs that you may be producing lousy plans are a) lack of a clearly defined, customer-oriented purpose, b) too much vagueness, c) little connection between the purpose and the activities, and d) trying to do too many strategic initiatives at the same time.

FINAL THOUGHTS
If the plans are lousy, eventually the blame will shift from “what a lousy plan” to “what a lousy planner,” and the planner will find him or herself unemployed. Fix this before it is too late.