Everyone is entitled to an opinion, but...

“If we have data, let’s talk about data. If all we have are opinions, let’s go with mine.”

- Jim Barksdale

I'll start this post of continuing the story of Wayne Gretsky. I started it in two recent posts:

• Skate to where the puck is going to be, not where it has been and
• Don't chase two rabbits.

Gretsky was great and skating to where the puck was going to be. But, he never explained how he knew where it would be. It’s assumed that he was just very good at reading the play.

Where others saw chaos and unpredictability, he saw data/evidence/patterns/probabilities. He took the information available about the state of play and out-thought everyone else on the pitch.

Don't "just do it"

These days, we have a predisposition to action rather than thought. We’re told to “Just do it”. We're told the most important thing is to do something. Even anything. Because action is better than thought.

But, strategy teaches us that we need thought to choose the right actions. “Fail fast” and “test and learn” are great. But random experiments are at best inefficient. And ill-conceived experiments are even worse.

As Henri Bergson said, you should:

"Think like a man of action, act like a man of thought."

You have to look for evidence

It doesn't take a lot of experience to realise that you will probably never have all the data you want. But we still have to make decisions. And we can't always afford to wait to get more data.

But that is not an excuse for not bothering. My experience is that there is usually a lot more evidence available than people care to acknowledge. It takes a little creativity to find and interpret it. But that effort pays off in spades.

I remember hearing a proposal from the manager of a call centre within a medium-sized business. They weren’t keeping up with the number of incoming calls. He wanted to hire more call handlers.

But I asked him why people were calling in the first place. It turns out he knew exactly how many people were calling but had absolutely no idea what they were calling about. So I went and collected some data.

It turned out that most people were calling about things that the company had messed up. So it seemed obvious to me that they should at least consider that a better solution might be to hire more people or train them better to not mess those things up, rather than simply hiring more people to clean up the mess afterwards. But without having looked at that data, you’d have no way of knowing that.

Finding evidence is not enough, you still have to interpret it

It's equally true that we have a tendency to mis-interpret or over-interpret data the data they do have. 

• We see what they want to see, and not what is actually in front of them.
• We mistake correlation for causation.
• We mistake what customers say for how they actually behave.

So its obviously important not just to have the data, but to use it well.

Evidence of the future

Another mistake is thinking that there can be no evidence for the future because it hasn’t happened yet.

But as the famous Science Fiction write William Gibson said:

“The future is already here, it’s just not evenly distributed.”

Consider COVID-19.

Think of all the companies who’ve been experimenting with remote work for years.

Think of all those films and that famous 2015 Ted Talk by Bill Gates. He not only predicted the global pandemic but also described how it would happen in pretty accurately detail.

The conspiracy theorists, of course, have a field day with that. But all he was doing was pulling together the evidence which was readily available to us all.

So, if we weren’t prepared for pandemic it wasn’t because there wasn’t any evidence, but because we hadn’t paid attention and acted on the insight.

Evidence versus intuition

I've heard other people argue that experience and intuition are better guides than evidence.

Don’t get me wrong: Intuition and experience are wonderful things.

But, they tell you:

• what data to look for,
• how and where to look for it, and
• how to avoid misinterpreting it.

Experience and intuition also contain all our biases and failings.

So intuition and experience aren’t a substitute for evidence. They’re a tool for using evidence more effectively.

Hindsight is 20:20

We tend to turn for inspiration to very successful people or businesses. And what we see is what they did. That what’s visible. And I think that may be partly what is behind our current bias towards action. 

But what we don’t see is the thought they put into it and the evidence on which they based it.

Or, we see the few who succeeded without using evidence and thought. And forget about the vast majority who simply failed on that basis.

Conclusion

There is another saying about opinions: Opinions are like noses; everybody has one. (Although I think the original saying might have referred to a different piece of anatomy.)

Opinions are a weak foundation for business strategy. Evidence is the antidote.

So, as business strategists, we should constantly be asking: What evidence to you have to support your decisions? And what processes do you have in place for re-confirming or adjusting that on an ongoing basis?

Don't chase two rabbits

“The man who chases two rabbits catches neither.”

- Confucius

In a recent blog post, I talked about the legendary Canadian ice hockey player, Wayne Gretsky. Gretsky was famous for his ability to read the play and position himself ahead of the puck.

Gretsky, of course, could only skate to one place at a time. He had to make a choice. I bet he got it wrong a lot of the time. But, from his record, we must conclude, that he got it right even more often than that.

In my experiences, businesses hate making choices. Often, when I present a client with a range of different strategic options, their natural tendency is to want to do them all. To chase both rabbits.

This applies to choices about customers or customer segments, strategic initiatives, almost everything in business.

Strategy always involves choice. If there is only one rabbit and only one way to chase it, you’re not really doing strategy. You’re just hungry and trying to get dinner.

But as soon as there are two rabbits or two different ways to chase them, then strategy comes into play:. Which will you chase, why and how?

It is important to choose which rabbit to chase. It is equally important to choose NOT to chase the other one.

In fact, Harvard Business School strategy guru Michael Porter says that:

“The essence of strategy is choosing what not to do.”

But most organisations treat strategy only as deciding what new things to do.

So it’s no wonder that employees often greet a new strategy with a groan. They already feel over-worked and under-resourced. And now they have all this new stuff to do on top of all of the old stuff they were already doing.

As a result, they get demoralised. They end up falling back onto old habits. They end up doing what they used to do, and not what the new strategy requires them to do. Or, inevitably, they end up not doing anything terribly well. They end up chasing two rabbits!

I remember talking to the CEO of a startup division within a large corporate. He had become quite desperate. They hadn’t even launched yet. But already there were 130 employees. He told me that everyone was madly busy and constantly telling him they needed more people. And yet, he couldn’t understand why so little was actually getting done.

After a short investigation it turned out that those 130 employees were running no fewer than 100 projects between them. It was chaos, with almost no focus. It took a few months, but eventually we whittled those 100 projects down to about 20 key projects which were actually required to deliver the strategy. Everything else was stopped. And with that focus, people were able to move forward.

They were chasing too many rabbits. It was only be choosing to chase fewer rabbits that they could move forward.

Even if you do need to chase both rabbits, you’re still better off doing everything you can to catch the first one before you start chasing the second one.

I heard a great mantra the other day:

"stop starting, start finishing".

And so, as business strategists, we should constantly be asking: What will you choose to do? And equally importantly, what will you choose not to do or to stop doing?

Skate to where the puck is going to be, not where it has been

I remember the first time I watched live ice hockey. I was with my cousin, watching her kids play in Boulder, Colorado.

Even at their relatively junior level, it's a great spectator sport. It's fast, it's physical, and it's non-stop. In fact, its a great analogy for business in today's very competitive environment.

Wayne Gretsky is a Canadian ice hockey player. In his prime, he was so good that the earned the nickname 'the Great One'.

Curiously, Gretsky was not know for being the biggest, fastest or strongest player on the ice. You might think that these were the qualities that counted most for an ice hockey player. But, despite these short-comings, he had still earned his reputation as the best.

When asked what his secret was, his answer was disarmingly simple:

"I skate to where the puck is going to be, not to where it has been."

(Reference)

Unfortunately, most businesses don't do this. They behave more like 8-year-olds on a soccer field - all chasing after the ball.

If you doubt the ineffectiveness of this approach, then watch this video.

Have you ever noticed that professional sports people anticipate the game. They position themselves ahead of the play. In the open space. Where the opportunities arise.

Young children, on the other hand, have a tendency to chase after the ball in small groups. All doing the same thing. Never quite catching up. Or, at least, most of them do until they've been properly coached.

It’s easy to understand why businesses behave in a similar way. We’re creatures of habit. We're under-coached. So when the going gets tough, we fall back on what’s worked before.

Most managers got promoted because they were successful. But that could have been 5 to 10 years ago. Some of them have been resting on their laurels ever since. So when faced with a new problem, they revert to what’s worked for them in the past. We all heard the dreaded: “that’s just the way our industry works” or “that’s the way we’ve always done it before.”

I remember many years ago waiting to go into a board meeting. I overheard two directors discussing with some excitement how they’d both just renewed their insurance online. This was when that was still new and exciting, so quite a long time ago. But 20 minutes later, those same 2 directors rejected a proposal, because “we all know that people don’t buy insurance online!”

One of the key advantages of strategic thinking is that it gives you an opportunity to get a head of the ball. To get ahead of the competition. Ahead of the market. To skate to where the puck is going to be, not to where it has been.

If you're chasing after the ball, you will never catch it. It keeps moving. It's always ahead. You're always behind. Eventually, you'll exhaust yourself. It will be someone else who scores the goal.

The say that the only constant is change. Tomorrow will not be the same as yesterday.

And so, as strategists, we should constantly be asking ourselves: What will we need to do to succeed in the future, and how is that different from what we needed to do to succeed in the past?

It's in the numbers

When I first took an interest in business strategy, I shied away from getting too involved in the numbers.

I had a degree in accounting, and, later, and MBA. So I didn't have a problem dealing with numbers. But I didn't want to be seen as a 'bean counter'.

Bean counters, I reasoned, focus on efficiencies and cost cutting. Strategists focus on the big picture. Blue sky thinking. Frameworks and models. Inspiration couldn't be reduced to spreadsheets.

But I quickly realised how wrong I was.

Yes. Strategy is about the big picture, blue sky thinking, frameworks, models and inspiration. But behind all of those things lie the numbers. And until you can get to the numbers, the job isn't done.

The numbers used in business strategy include but extend well beyond those typically found in financial statements and reports. 

They include demographics and economics; product and process performance. They include market research. They come from within the organisation, within the industry, and from without. They deal with durations and conversion rates, volumes and prices. They look behind hunches and anecdotes to spot trends and structures. They range from statistically valid samples to pure educated guesswork.

It requires imagination and insight to determine what numbers to look for, where to look for them, and how to interpret them.

Triangulating between more diverse source of information increases confidence. Understanding how to reconcile disparate and even contradictory information requires finesse and experience.

If you want to understand how a business works, and if you want to get good at doing your job, ask how, what, when, where and why.

But if you want to get good at business strategy, you need to go further. You need also to ask how much, how many, how often and how long.

(The image at the top of this post is partly inspired by one of my favourite films, the Matrix, and in particular the scene in which Neo finally learns to see through the real world to the numbers and code it manifests.)

6 reasons to hire an independent business strategy consultant

So, you need help with your business strategy. What do you do?

Here are 5 reasons why you should hire an independent business strategy consultant.

1. Capacity

Let's face it, you're busy. You have a business to run. You have fires to put out. You have new clients to woo.

You don't need to overcomplicated business strategy development and execution. But it does take time. Time you don't have.

An independent business strategy consultant can do some of the heavy lifting for you. Take some of the load off. Allowing you to focus only on the outcomes and what's most important.

2. Experience

You've probably been involved in developing and executing the strategy for your business for a while. After all, it is part of your role as a senior leader.

But an independent business strategy consultant has probably done it dozens of more times at dozens of more organisations. And it may be all they've focused on for some time.

All that extra experience pays off. They've seen and tried more different approaches. They've seen what did and didn't work. You can benefit from that experience.

You don't need lots of models and frameworks in order to develop and execute a business strategy. Just like you don't need lots of tools to service a car. But it does help. A lot! So find someone who has the right tools at their disposal, who knows how to use them, and has the experience required.

3. Objectivity

You could delegate the job to someone on your team. After all, you've gone to a lot of trouble to hire the best people you could get. You trust them to run your business. Why not trust them to help you with your strategy?

Unfortunately, they have vested interests. Strategy has consequences for them. And sometimes, the right strategy for you and your business won't align with their personal interests.

So find someone to help you who has nothing personal to gain or to lose by subtly nudging your strategy in one direction or another.

4. They don't 'land and expand'

Most of the larger consultancies operate a 'land and expand' strategy. Your first contact is with an experienced veteran consultant. Often a partner.

But once they've made the sale, most of the work is performed by an army of juniors. The senior consultant may oversea the work. But often they spend as much time looking for additional opportunities to sell you yet more armies of juniors.

Don't get me wrong. Its a very successful model. It works very well for the consultants. And sometimes its exactly what you, the client, need.

But sometimes it isn't.

An independent consultant doesn't have an army of juniors to sell. So you get the benefit of consultant you actually hired for the entire engagement. It's a case of different horses for different courses. But it's important to be clear which is right for your circumstance.

5. They go away

It's likely that you will need that extra capacity, specialist experience and objectivity for a defined period of time. To address a specific challenge. To explore a new directions which you may or may not pursue.

Once your new strategy is in place, you'll want to make structural changes in order to execute it effectively. Eventually, the organisation will have absorbed the new strategy. You may neither want nor need to keep that extra capacity, experience and objectivity around all the time. After all, good consultants don't come cheap.

So you want help from someone who will go away until you need them again.

6. Personal reputation

They say an independent consultant is only as good as their last engagement.

An independent consultant doesn't have a big brand or the reputation of an army of other consultants to hide behind. Their name and personal reputation is on the line with each engagement they accept.

And so, they have to make each engagement count. Their commitment to your success is extremely high.

Things to aware of

There are, however, a few things to be aware of. One is the have-a-go consultant.

The have-a-go consultant is someone who finds themselves between jobs. So they decide to 'have a go' at consulting. Sometimes, they're genuinely trying to work out if it is the right route for them. Other times they just filling in time until the can find the right job again. Some even treat their consulting sojourn as one or more very long job interviews. They're hoping you'll like them so much that you'll offer them a permanent job.

Maybe a have-a-go consultant is adequate for your needs.

But independent consulting requires specific skills. It's also a mindset. It is different from being an employee. Have-a-go consultants are unlikely to have the depth and breadth of experience of someone who has been practicing for a while. Of course, everyone has to start somewhere. But have-a-go consultants are less likely to be investing in building the capabilities required to succeed in the long term.

And if they're treating their engagement with you as an extended job interview, then they have a vested interest in the outcome. They no longer have that objectivity.

So if you need help with your strategy, an independent business strategy consultant may be exactly what you need. Hopefully, this post can help you to decide.

Trust in the process

I am not the world's greatest athlete. I never have been. And I probably never will be.

I do enjoy running. But I am a mid-to-back-of-the-pack runner.

Despite this, I have completed two ultramarathons.

I know there are some people who look down on those of us at the back of the pack. But I am immensely proud just to have completed those and other events.

But, this article isn't about what I achieved. It's about how I achieved it.

In short: I trusted in the process.

When I signed up to run my first ultramarathon I had no experience and very little idea of what I was getting into. Up until very recently before that point, I'd not believed it was something I was capable of doing. All I really had was the reassurance from someone I knew who had done it before. And all he had really told me was that I would be able to do it if I put my mind to it.

So, I sourced a training programme from what I hoped was a reliable source and followed it as closely as I could. I figured that if I could complete the training, I could complete the race.

It worked. I was stone-cold last, but I completed the distance. (Technically, I was 9 seconds over the cut-off time, and so did not qualify. But, I had completed the distance. And that was good enough for me. See: NDW50 2015 Race Report.)

When I signed up for my second ultramarathon, I resolved to follow the same process. After all, it had worked before. And this time I was older and wiser.

But, I had also learned that I had some specific weaknesses. I didn't think that a generic plan would be enough. So I engaged some trainers to help me with them.

As with the plan, I trusted in the trainers. I did everything they told me to do. Of course, we talked things through and problem-solved together. But I trusted that they were the experts I had chosen. I did whatever they told me to do as diligently as I could. They pushed me to my limits, but not beyond.

The second time around, I was not stone-cold last. I was 212th out of a field of 234 finishers and another 17 who failed to complete the race. In the world of endurance running, it was an unremarkable performance. But I could not have been more proud of what I'd achieved. (See NDW50 2018 Race Report.)

And all because I chose to trust in the process and in the experts.

It's the same with business strategy.

There are a number of tried and tested, and for the most part relatively simple, tools, techniques and processes for developing and executing business strategy.

If you use them diligently and consistently, they will produce results. Of course, like an elite athlete, you can push the boundaries and tweak the standard methods to suit your specific needs. But only once you've mastered the basics.

Equally, if you need help in choosing, using and/or tweaking them, there are experts to hand. You just need to choose someone with a track record of having delivered results.

And then you have to trust the process.

If you need help with your business strategy, and if you're ready to trust in the process, then contact me to find out how I could help you to achieve your potential.

See also:

• Five things running taught me about business strategy

Using Net Promoter Score in your business strategy

What is Net Promoter Score (NPS)?

NPS is a measure of customer advocacy for your business, product or service.

It is frequently used as a proxy for customer satisfaction.

How do you measure and calculate NPS?

NPS is measured by asking customers one simple question: "How likely is it that you would recommend [brand] to a friend or colleague?" Answers are provided as a score from 0 to 10. 0 indicates "Not at all likely", and 10 represents "Extremely likely".

Based on their response, customers are then divided into three groups:

1. 0-6: Detractors
2. 7-8: Neutral
3. 9-10: Promoters

The final score is calculated by subtracting the percentage of customers who are detractors from the percentage of customers who are supporters.

Scores can range from -100, where all customers are detractors, to +100, where all customers are promoters.

What NPS is not

NPS is an extremely valuable indicator of the health of a business. Its widespread adoption also makes it a useful for benchmarking. It is easy to compare NPS scores across businesses and even across industries.

However, it is not particularly strategic. This is because:

1. It provides no indication of what the organisation is doing to achieve its score.
2. It is completely generic and does not capture the extent to which the brand is differentiated in the market.

And so, whilst I do advocate the all organisations should use it, I also also advocate that they should supplement it with other more strategic customer indicators.

Some tips for using Net Promoter Score

Despite its simplicity, it is still possible to use NPS badly.

So here are five tips for using it well.

1. Ask the NPS question as a single question, on its own, as close to the point of interaction as possible.

If possible, build the question right into the product or service. That way you get what they really feel while actually using your service. Not some half-remembered feeling which has been clouded by everything they've experienced since your product.

This is relatively easy to do if your product or service is digital. But it can also be achieved using some sort of simple terminal as customers leave your premises, or by follow-up email or text.

The further you get from the point of use, the less value you will get. Organisations who collect NPS as part of an annual customer survey tend to the get the least value of all.

2. Make it as easy as possible for the user to answer the question.

The simplest solution is to  present them with a series of round buttons labelled 0 to 10 with labels at the extreme ends of the series. The customer simply clicks on a button and it's done. No 'confirm' or 'submit' button is needed.

Even if you make it that easy, some people either still can't be bothered or will prefer not to answer.

3. Ask supplementary questions judiciously

NPS offers no explanation for the score.

So it might be useful to ask follow up questions. These can be tailored to the score they've already provide.

Most importantly, the original NPS score should be registered regardless of whether or not they are asked or answer any follow up questions.

4. Link the NPS answer to your unique customer identifiers

This enables you to segment your customer base by various other criteria and see if the NPS score varies between segments. (You obviously need to be careful to consider the statistical significance of any variations.)

5. Ask it about once a year

If your customers use your product or service repeatedly (which you probably hope they do!) don't ask them for an NPS score every time they do. About once a year should be enough. You might consider asking them more frequently if you notice a significant change in their usage pattern.