When life gives you lemons, think like Juan José Méndez Fernández

Image of cyclist with one leg and one arm with the caption Don't tell me you can't
Juan José Méndez Fernández is a cyclist from the Catalan region of Spain. He has competed in the 2004, 2008 and 2012 Paralympics.

It was this picture with the caption "Don't tell me you can't" that caught my eye. What an inspiration!

My mind immediately asks: what if he falls over - he has no way to brace his fall? Surely there are easier sports for a man with only one leg and one arm?

But I guess that is the point. For whatever reason, he wanted to be a cyclist. And he didn't let what most of us would consider almost insurmountable limitations stop him. He adapted, and he succeeded.

Lessons for business strategy

Of course, I quickly moved on to consider what the lessons from this are in business strategy.

In business strategy, it is important to start from a balanced and realistic analysis of your current situation. There is no point in sugar-coating things. I am sure Juan did not start by simply assuming he was just like all of the other cyclists. I am sure he started by realising that he was different and that he adjusted his training plan accordingly and found someone to help him get onto the bike and upright, etc.

So too, in business strategy, we recognise weaknesses and threats alongside strengths and opportunities in a SWOT Analysis when developing strategy, and risks and issues in a RAID Log when executing it.

You can categorise these negative factors in strategy development and execution using a simple matrix:

Be optimistically realistic

Someone once accused me of being too pessimistic because of the attention I pay to weaknesses, threats, risks and issues. It seems, sometimes, that the world only wants optimists. But I counter that the world needs neither pessimists nor optimists but only realists; that by paying sufficient attention to weaknesses, threats, risks and issues you are able to succeed despite them - or even, if you are really clever, because of them.

Unfortunately, the literature plays to unrealistic optimism. People focus on success - what worked - and forget about all the difficulties and challenges along the way. Failures, and the lessons learned, fall by the wayside.

But being aware of weaknesses, threats, risks and opportunities is only the first step. What do you do about them?

Dealing with Weaknesses in Strategy Development

  1. Strengthen your weaknesses. If your organisation is weak at something you can address this directly. You can train existing staff, hire new staff, improve existing or develop new processes, upgrade equipment, move to a better location, undertake research, etc.
  2. Partner with someone who has strengths where you are weak. You don't have to go it alone. A partnership could work especially well if you can find a partner who is strong where you are weak and weak where you are strong.
  3. Avoid competing in areas where those weaknesses matter most. For example, if you lack retail marketing capability, stick to wholesaling or B2B markets; if you can't manufacture at volume, find a niche; segment your market and focus on those customers who value what you are good at more highly than what you're not good at.
  4. Take advantage of your weakness. When Spencer Silver was doing laboratory research into how to make stronger adhesives, he accidentally discovered a very weak adhesive. Instead of writing it off as a failure, he invented the Post-it note, where the weakness of the adhesive is its very strength.

Dealing with Threats in Strategy Development

  1. Monitor your threats. Make sure you have systems in place to monitor your threats as they evolve and to communicate that information to the appropriate people in the organisation.
  2. Neutralise threats. Consider what steps you could take to prevent threats from materialising. For example, in the case of a regulatory or political threat, could lobbying help to reduce the likelihood or impact of the worst possible outcomes?
  3. Prepare yourself. Take steps to prepare yourself for the possibility that the threat turns bad. For example, if it is a technological threat, start to research how it works. If it is an environmental threat, start investing now in greener options.
  4. Map out your scenarios. Scenarios are an effective way of dealing with high levels of uncertainty (whether positive or negative). See also: Scenario Planning for Business Strategy
  5. Develop your strategy assuming the threat materialises. If the likelihood of it happening is more certain, you can simply develop your strategy around the assumption that the threat has materialised - treat the threat as if it were a weakness, and proceed as outlined above.
  6. Adapt. If the threat emerges differently to what you anticipated, at some point you have to change your strategy. Whether it is a small tweak, or a full pivot to a completely different strategy, don't be afraid to change. History is littered with failed businesses who stuck doggedly to their plans when all the evidence suggested that change was required.

Dealing with Risks in Strategy Execution

Dealing with risks in strategy execution is, in many ways, similar to dealing with threats in strategy development.
  1. Monitor your risks. Risks are, by definition, things that might go wrong, but have not yet gone wrong. So the first step is to actively monitor them. What indicators or signals might suggest that the risk is either increasingly or decreasingly likely to happen? Are you equipped to detect subtle changes in those indicators and signals, to communicate those changes to the key decision makers and to respond rapidly to material changes?
  2. Mitigate your risks. What can you do to reduce the likelihood that a risk does happen, or the impact on your organisation when it does? What safeguards can you build?
  3. Avoid your risks: Sometimes a risk is simply too great, and you need to come up with an alternative, less risky solution.

Dealing with Issues in Strategy Execution

An issue, as we know is a risk that has happened.
  1. Escalate the issue: The first thing to do is to make sure everyone knows that the issue has occurred.
  2. Solve the problem: Can you, or someone else in your organisation (see the previous step) fix whatever it is that has gone wrong? (This is often referred to as remediation.)
  3. Go back to the drawing board: Issues are seldom a reason to go back and revise your entire strategy, but they are often a reason to go back and change your tactics for execution. Don't stick doggedly to your plan, as if the issue has not arisen. Can you work around the issue?

Finally, if you ever find people getting too focused on the negatives in your strategy, remember the saying:

The people who think it can't be done should get out of the way of the people doing it.
Source unknown. 

PS: I could not find a proper source for the original image. If you know who made it, please drop me a note in the comments below so that I can give proper credit.

The most popular posts on strategy development and execution in 2018

Happy New Year to you all!

At the end of another year - where does the time go - I took time to reflect on the most popular posts on the Strategic Coffee blog during 2018.

Here they are:

10. What is a SWOT Analysis

Love it or loathe it, the humble SWOT analysis remains one of the most popular frameworks in the book, coming in in a respectable 10th place. See also 11 techniques to help you do a better SWOT analysis and The consistently popular SWOT analysis.

9. McKinsey 7S Case Study

This is the only case study we've ever blogged. Client confidentiality usually prevents us from writing case studies, but this one was kindly submitted by a reader. Perhaps you have another you'd like to share with us?

8. The BCG Matrix

The BCG Matrix is a portfolio analysis tool which can help you decide which subsidiary business, product or service lines you should invest in, hold or dispose of.

7. Harvey Balls Font

Harvey Balls, sometimes called Booz Balls, are those little circles with 1, 2, 3, 4 or no segments coloured in. They are useful for indicating high/medium/low, or degrees of strength without being as specific as using numbers would suggest. This post provides a link to a font you can install to make them incredibly easy to use in, say, Word, Powerpoint or even Excel.

6. How to use Porter's Value Chain Analysis

At one time, I thought Porter's Value Chain had fallen from favour, replaced by more modern alternatives such as the Business Model Canvas. This post's position on this list suggests otherwise.

5. How to use a RAID log

A RAID log is a staple tool in project management. Here, we adapt it for use as a strategic management tool.

4. Using the McKinsey 7S Framework to assess strategic alignment, strengths and weaknesses

The McKinsey 7S analysis makes a second appearance on this list in position 4. This time, it is a more conventional post explaining how to use it.

3. How to draw a Strategy Canvas in 4 easy steps

The Strategy Canvas, popularised in Blue Ocean Strategy, is a visual tool for differentiating your proposition to set it aside from the competition.

2. How to design a Target Operating Model (TOM)

In an environment where businesses must increasingly compete not just on what they deliver (products and services) but also on how they deliver, Target Operating Models are a key consideration for strategy execution. 

1. 9 essential tools for Strategy Analysis

And finally, in the top stop, our ever-popular compendium of the 9 most essential tools for Strategy Analysis. This includes a number of those lower down on this list, plus several more.

In reviewing this list, it strikes me first of all that all of these articles are very practical guides on the basics of how to develop and execute strategy. I think this practical focus is heartening in a subject which can sometimes tend towards the theoretical on the one hand, and the hyperbolic on the other.

Secondly, I notice that many of these articles were written some years ago - albeit that many of them have been updated several times since they were first published.

That may point to the perennial nature of the subject - in a field which is constantly searching for the next big thing, many of the basics of how we do so have not changed terribly much.

But it may also point to the nature of SEO (Search Engine Optimisation). Most of our readers find the blog by searching on Google or Bing and search engines favour content which has been there for a longer time.

Do these posts reflect the kind of content you'd like to read on strategy development and execution? We're constantly looking for new content to keep the blog fresh, so why not let us know what type of content you'd like to see during 2019 by dropping us a note in the comments below? I'd love to hear what you think.

Customer experience - get the basics right

Today, I was asked to print, complete, sign, scan and return by email a form from a financial services business of which I have been a customer for over 12 years. Fortunately, the form was only a single page. On that form, however, I was required to write my full name, not once, but three - 3! - times.

A good place to start is to assume that your customers hate doing data capture. There are probably three reasons for this:
  1. it is laborious and time-consuming - think: the opposite of enjoyable.
  2. they may not have all the information to hand - OK: I did have my name to hand, but that same form also required me to fill in a tax reference number, which I did have to look up, and which I had also given them on previous occasions.
  3. they're worried about the consequences of providing incorrect information - we've all been there, some forms can be inordinately complex and cause quite a lot of anxiety.
So a good customer experience should avoid data capture wherever possible. There are a number of ways of doing this:
  1. use the data they've already given you - never ask a customer to give the same information twice.
  2. build data connections to partner organisations in an ecosystem - for example, a workplace pensions administrator should get most of the member data it needs from the employer. (If your business does not yet exist within an ecosystem, your should start identifying one and integrating with it post-haste as you can be assured that your customers are using your product and service within some broader context.)
  3. build links to independent identity providers like Yoti or HatDEX, or even using Google, Facebook and/or Linkedin identity management services, depending on what is most appropriate to your business.
  4. use AI to determine and present useful defaults.
In this day and age, it is no longer acceptable to expect your customer to do extra work because your systems are inadequate and disconnected. Put the customer at the centre of your business and build a customer experience that is convenient to them.

See also:
Ironically, just after drafting this I received an email from Spotify asking me to provide them with some customer feedback. I usually complete such surveys for products and services I really like because I really want them to get even better. So I did. To my surprise, the questions included:
  • Have you ever tried Spotify? Yes, I am a loyal paying customer. I presume that is where you got my email address from!
  • When last did you listen to Spotify? Actually, I am listening to it right now. If you checked your records, you would see that.
  • How likely are you to subscribe to Spotify's premium service? Not very likely to be honest. A second subscription would seem unnecessary while I am still paying every month for the first.
Spotify, I hope you will try harder in future - I love your services, and I'd really like to help.

11 techniques to help you do a better SWOT analysis

The humble SWOT analysis, which lists an organisation's Strengths, Weaknesses, Opportunities and Threats, remains one of the most popular models in strategic analysis.

But is simplicity and power make it notoriously difficult to do well.

In this article we will look at several techniques to help you do a better SWOT:

1. Brainstorm a quick and dirty SWOT

Brainstorming is probably the default way of doing a SWOT analysis. Whilst it is not the most robust approach, it should not be dismissed entirely, particularly if you are looking for a very quick result or a starting point for further work using some of the other techniques described below.

Brainstorming can be improved by including a broad cross-section of employees and outsiders such as consultants, customers, suppliers and distributors, as well as by making use of SWOT checklists.

2. Start from your Business Model Canvas

A much more structured approach is to start with a Business Model Canvas or enhanced Business Model Canvas of your as-is or to-be organisation. Work through each element in each section of the canvas and do a mini-SWOT of that element: evaluate your strengths and weaknesses regarding that element, and consider what trends might impact on it positively (opportunities) or negatively (threats).

You don't need to have a long list of strengths, weaknesses, opportunities and threats for each element, but the process of working through them in this way will yield a much more thorough SWOT analysis.

3. Start from your Value Chain Analysis

You can use a Porter's Value Chain of your as-is or to-be organisation in much the same way.

If you've already used a Business Model Canvas or enhanced Business Model canvas to improve your SWOT, then you will already have considered your Core processes, so all that remains is to consider any Strengths, Weaknesses, Opportunities and Threats relating to your Support processes.

4. Use a PESTEL Analysis

A PESTEL analysis is a great way to identify a wide range of opportunities an threats your business faces. For each consideration identified in the PESTEL analysis, simply ask how it might help or hinder your organisation. You may also be able to identify threats and weaknesses by asking where your organisation is particularly well or poorly placed to respond to the trends in your PESTEL.

For a very thorough analysis, consider the possible impact of every item in your PESTEL analysis against every element in your (enhanced) Business Model Canvas or Porter's Value Chain.

5. Use a Porter's 5 Forces Analysis

You can use a Porter's 5 Forces analysis very much like you use your PESTEL analysis to identify opportunities and threats.

6. Use a McKinsey 7S

Whilst the PESTEL and Porter's 5 Forces analyses focus on factors outside of the organisation itself, a McKinsey 7S analysis looks at factors which are directly under the organisation's control. It is important to consider not just the strengths and weaknesses for each of the 7 dimensions in this analysis, but also to consider the alignment between them as a source of potential strength or weakness.

7. Mine your Customer Analysis

If you've already used your (enhanced) Business Model Canvas to improve your SWOT, you will already have considered each of your customer segments. But don't stop there - scour all of your customer analysis for clues as to what should be in your SWOT.

What do your customers say they value or don't value about your organisation's products and service, and how you deliver them? If they don't by your products and services, what do they buy instead?

8. Mine your Competitor Analysis

Competitor analysis is a great source or insight into your organisation's strength, weaknesses, opportunities and threats. Which competitors are gaining or losing market share and why? Are their target markets shifting over time? What capabilities are they investing in, and what kinds of skills are they hiring? Which employees or customers are leaving you or your competitors and where are they going? What do your competitors say in their press releases and marketing material to persuade their investors and customers that they will be successful?

9. Be specific - avoid platitudes in your SWOT

When listing their strengths, most organisations say things like "our people are our greatest asset" or something similar. But don't settle for that. Ask: What specifically can your people do, that customers, distributors or other stakeholders value, that is different and better than your competitors? The more specific and quantifiable you can be, the better.

10. Back your SWOT up with detailed analysis

Usually, when you see a SWOT analysis it is in the form of simple lists of short statements of strengths, weaknesses, opportunities and threats. But don't stop there. For each statement, back it up with detailed evidence and analysis. What data support the statement? What examples illustrate it? The more detail you can provide, the more compelling your SWOT analysis will be.

Don't be afraid of including contradictory evidence and data. Strategy is a complex and often ambiguous subject. If it was easy, everyone would be doing. By including contradictory evidence and data, you will increase your credibility, allow stakeholders with contrary views to feel that they have been heard, and most importantly, remain more alive to the possibility of your analysis changing as the situation evolves.

Your detailed analysis could include evidence and data about not only your organisation but also about your customers, partners competitors, etc.

11. Prioritise what you include in your final SWOT

Used correctly, these techniques will generate a vast quantity of information for your SWOT. A good SWOT analysis, however, is usually brief and to the point - highlighting the absolutely key strengths, weaknesses, opportunities and threats in a way that engages, connects with and focusses key strategic decision makers.

It is therefore important to prioritise your findings. Strengths and weaknesses can be prioritised by impact, whilst opportunities and threats should be prioritised by impact and likelihood. Don't be afraid to combine related items, or separate more complex items out into their constituent parts.

Once you've prioritised your SWOT analysis, exclude the least impactful or likely factors. Don't discard them, though - you may want to continue to keep an eye on them in case circumstances change and they become more significant again. supports all of these techniques in a collaborative online environment. Why not try it for free right now and start producing a better SWOT analysis that makes a real difference to your organisation?

See also:

Dealing with 'inevitabilities' in business strategy

Many of the threats and opportunities we identify on SWOT and PESTEL analyses are uncertain: things that might or might not happen or things that might happen one way or another. Others are simply trends which carry with them an air of inevitability.

For example, we don't know:
  • if antibiotics will lose their effectiveness or if medicine will find an alternative approach,
  • if the world will be able to reverse the effects of global warming and/or overpopulation, or
  • whether the current political trend to the right will continue, etc.
However, we can be pretty sure that:
  • products and services will continue to digitise,
  • data will become increasingly important in the way the world functions,
  • autonomous vehicles will eventually succeed human-driven vehicles, 
  • people will be more inclined to rent assets which they had previously been required to own, and
  • AI will take on ever more complex tasks previously thought to require a human to perform them.
Of course, the distinction between these categories of uncertain and inevitable changes can be blurred and depend on the lens through which you look at them. But in any strategic context and time-frame, it is usually possible to distinguish between the two.

How should a strategist handle these inevitables?

One swallow does not a summer make

Every inevitability will have its doubters: people who think it will not come to pass - as often as not, because they simply don't want it to happen.

But as strategists, we must deal with the world the way it is, not the way we wish it were.

Even the strongest trends seldom proceed in a straight line. There are invariably numerous setbacks and other surprises. The doubters will cease upon these as evidence that it will not happen. But, as Aristotle said:
One swallow does not a summer make.
There can be few recent examples as dramatic as the bursting of the bubble around the turn of the century. Many businesses went bust, and I am sure that small fortunes were lost. At the time many heralded this as proof that people wanted to continue to do business as they had before and that the threat of technology had been shown to be a hollow sham. However, as much of a setback as it was, the trend recovered and strengthened.

Part of the strategists' role is to see through these setbacks and other anomalies and remain focused on the underlying trend.

Not 'if' but 'when' and 'how'

Once we've established that something is more or less certain to happen, we can stop worrying about if it will happen, and start applying our minds to when and how it will happen.

The strategist should monitor such trends on an ongoing basis. Do recent events suggest that the trend is speeding up or slowing down, or likely to speed up or slow down? Are they evolving in a way which is slightly different to how they started out or where originally expected to play out?

For example, Amazon changed the business of book distribution (and many other businesses!) forever. But what fewer people had anticipated was how Amazon was able to use its new-found power in the publishing industry to launch the Kindle where so many other e-readers had failed before it.

Being alert to these subtle changes in a trend which seems otherwise inevitable could be a source of significant strategic advantage, especially where all of your competitors are also building their propositions around the same trend.

So, perhaps it is time to go back over your SWOT and PESTEL analyses, distinguish between those which are uncertainties and those which are inevitabilities, and ensure you have appropriate sense-and-respond strategies in place for each.

photo credit: Duncan Rawlinson - - @thelastminute Passage via photopin (license)

4 remedies for your innovation woes

Innovate or die!

These days everyone is either innovating or desperately wishing they were.

Don't get me wrong - innovation is a good thing. As customers' expectations evolve at an increasingly alarming pace, organisations that fail to innovate quickly get left behind.

However, most of the organisations I speak to don't feel they're innovating particularly well.

So, here are my 4 tips for better innovation:

1. Work from the outside in, not from the inside out

Start by describing an ideal world as experienced by the customer. Describe what they do, why they do it, and how they feel about it. If possible, talk a few customers through this and see if their eyes light up or if they start to drift off.

Avoid the temptation to start by describing how you could improve your existing products, services and processes, or how you could leverage some exciting new idea.

This helps to ensure that all of your innovations serve a genuine customer need. Only then should you consider whether you have, or could gain access to the technologies and capabilities required to deliver it. 

2. Don't try and boil the ocean

Once you have a clear picture of what you want to do, don't try and do it all in one go.

Instead, break it into the smallest chunks that you can that will still deliver some value to the customer.

This delivers customer value sooner, and with less risk and less cost. They also allow you to learn what is and isn't working, and to adjust your approach accordingly as you go.

Note that these small chunks are not the proverbial quick wins or low hanging fruit - because you've started from the outside in and broken your propositions down, they are integral components of your strategic transformation programme.

3. Measure twice, cut once

Determine measurable hypotheses and build your measurement systems into the solution right up front.

Test your hypotheses on a scientific basis - that is with control groups. If you don't have control groups, you will never have any way of knowing whether your innovation caused the observed improvement, or whether it was caused by some other factor.

Don't try to collect data after the fact. It is too tempting for people to try and collect data which proves the hypothesis.

And don't try to collect data manually. People get lazy and start to cut corners. People want to move on to the next idea, and you want them to be free to. Instead, build the measurement into the solution, so that the measurement data is generated as a by-product of the process.

See also: Management approaches to dataGetting the most out of KPIs, and How to measure success against strategic vision and objectives

4. Make sure you build a reverse gear

If your hypothesis fails - the innovation does not produce a measurable improvement, or worse still, produces a measurable decrease - then you need to be ready to reverse it out.

All too often organisations are unable (because it is technically too difficult) or unwilling (because they are too emotionally invested in it) to reverse failed innovations out. Generally, it takes a little more effort to build innovations which can easily be reversed out, but it is worth it, in the long run, to keep your innovation process honest.

Lots of pundits talk about the need to embrace failure. You can only do so, if you can reverse it out, and learn from it before trying again.

See also: Strategic Analysis: Old Mutual changes its replatforming partner

photo credit: wuestenigel Socket on the wall via photopin (license)

Of Operating Models, Business Models and Strategy

I was talking earlier this week about the operating model changes that would be required to deliver a particular strategy, and someone (quite rightly) challenged me to be more clear on what I meant by operating model, and how it relates to other ideas like business model.

Andrew Campbell is as good an authority on the subject as any. He teaches Business Models on the Ashridge Executive Education course and is also the author of the book Operating Model Canvas (which I would highly recommend).

Handily he has also written a short and accessible article on Business Models and Operating Models.

In it, he confirms the conventional summary of an Operating Model as People, Processes and Technology. (He goes on to define an alternative which may be technically better but somehow seems less accessible.)

He refers also to Alex Osterwalder's book Business Model Canvas, which I would also highly recommend.

I think you could probably summarise:
  • Operating Model: How you operate.
  • Business Model: What you offer to Who and how you make money from it.
  • Strategy: Why this achieves your purpose.
See also: