Doing Strategy: How it all fits together

This entry is part 1 of 6 in the series Doing Strategy

Have you ever tried to get your arms around the über big picture?  I mean, what is the end-game for the conversation that goes like this?

  1. Client: I want a mobile app.
  2. Consultant: Great!  What are your requirements?
  3. Client: I want a new mobile channel.
  4. Consultant: No, I mean what do you want the mobile channel to do?
  5. Client: I’m not sure.  What do you suggest?  You are the expert!
  6. Consultant: OK, well, how do you want the mobile app to support customers and your operations?
  7. Client: I’m not sure.  What do you suggest?
  8. Consultant: So, what is your larger strategy for the business and IT?  Let’s start there.
  9. Client: I’m not sure.  What do you suggest?
  10. Consultant: OK, well let’s drill down on your business model.  Tell me about your customer segments and value proposition.  What kind of relationships do you have with your customers?
  11. Client: Our business model has some problems.  That’s why we want a mobile app.
  12. Consultant: Can we take a step back?

How it all fits together

But take a step back to where?  You need to understand how the whole planning process fits together before you can take steps back to the beginning.

The truth is, there is no linear process for an existing organization.  There are concurrent activities going on at multiple levels.  You can’t really stop everything and go to the beginning.  You just need to find a good spot and jump in.  Strategic discussions about the business model are occurring at some level of the organization.  At the same time, at another level of the organization the operating model is being refined to bring operations into better alignment with the organization’s strategy.  All this while the organization is trying to operate the business AND transform itself according to the last target operating model that was developed.

In the conversation above, this client is probably not in the mood to scan the environment and brainstorm potential business models.  But changes in the environment are probably behind the problems with the business model, so that is an activity that you should recommend be spun off (assuming it is not already).

As for the mobile app, one option is to build something small as an initiative (transformation) or even a business-as-usual (BAU) activity that either resolves a major pain point or exploits a new insight.  Learn and repeat as quickly as possible.  This fiddling around can be a way to survive while the strategic issues are understood and addressed in the business model and/or operating model.

Doing Strategy: What’s in a Strategy?

This entry is part 2 of 6 in the series Doing Strategy

In my Defining Words series I take a position on what certain words mean because I believe using these words correctly is foundational to having an intelligent discussion about strategy, design, operations and technology.  After all, we are not really exchanging words–we are exchanging concepts.

But what we are left with is still a mess of concepts that can be difficult to get our arms around.  First of all we need to pick a context because words are frequently used differently in different contexts to represent different concepts.  For this series, the context is doing strategy in the financial services industry.

Then we need to create an ontology.   To describe all of the relationships between our concepts I will model our ontology in analysis level UML.  Obviously, the below diagram is both incomplete and flawed.  For example, does the strategy not track trends directly, irrespective of any forces?  But if I wait until I get a diagram like this perfect then I would never post it.  Feel free to post your comments about it…


The key concepts in this diagram are: Strategy, Corporate Strategy, Business Unit Strategy, Shared Service, Operating Model, Force, Trend, Business Model, Customer Segment, Customer Relationship, Channel, Value Proposition, Activity, Resource, Partnership, Revenue Stream, Cost Structure, Required Business Capability, Business Capability, IT Capability, and Strategic Technology.


Strategy: Starting with Why

This entry is part 3 of 6 in the series Doing Strategy

Simon Sinek’s TED talk – “How great leaders inspire action” about the “golden circle” is a good place to begin when setting out to create a strategy or marketing message.  Starting by understanding and communicating the WHY behind what you do is a very powerful way to get others to support it.  Simon asserts that this an element of the strategy behind companies like Apple responsible for exceptionally high levels of innovation and customer loyalty and promoter-ship.

“People don’t buy what you do, they buy why you do it.”

I think that the benefits of understanding and communicating the WHY go beyond invoking a positive emotional response.  It allows each employee and customer to derive for themselves the HOW and WHAT of the business — transparency that results in comprehension and trust.  Mike Hobday, an important mentor of mine, explains how important the issue of trust has become to banks.

Let us analyze a favorite WHY statement of mine…




If you communicate the WHY then the organization knows what to do and how to do it, and customers know what to expect.

  • First, the organization needs to understand some things about the customer such as what they want, need and expect; and what kinds of things they find enjoyable.
  • Secondly, the organization needs to understand the customer’s situation and what they are trying to accomplish.
  • Finally, the services provided need to be appropriate for the person, situation and purpose.

All this available to anyone with a great mission statement and a dictionary.

Are “Guiding Principles” the same as a “Strategy”?

This entry is part 4 of 6 in the series Doing Strategy


Strategic guiding principles are derived from experience, situational or positional analysis, or from researching best practices and industry or technology trends.

For example, an IT strategist for an organization might read in an analyst report that dramatically fewer banks are providing mobile apps for Blackberry devices and create the following guiding principles:

  • Reduce general investment in mobile apps for Blackberry devices
  • Provide for a spike of short-term investment in targeted mobile functionality that might cause profitable under-served Blackberry users to switch banks
  • Reduce investment in IT capabilities for Blackberry app development.  Move to outsource Blackberry app development and operations.

In the above example, the strategy is to:

  1. Save money by narrowing the investment in Blackberry apps
  2. Exploit an opportunity created by an emerging under-served segment of die-hard Blackberry users.

These kinds of strategic principles are created to guide changes to the operating model and assess the operating model against the business and IT strategy.  I cover my views on these and other kinds of strategic guiding principles here.

Market research or organizational experience must confirm the existence of customer micro-segment(s) that can be engaged with this strategy and the micro-segment must be abstracted into a set of personas or archetypes.

Service design (i.e. a customer journey map) must have uncovered usage scenarios where certain features are valuable to these targeted Blackberry users.  The strategy must be presented to diverse stakeholders in a manner in which they can fully absorb it and their input must be incorporated back into the strategy.

The entire strategy is based upon assumptions about technology and the environment which, assuming they are true at all, might change drastically and quickly.

My point is, guiding principles lack the richness to function as a strategy.  Guiding principles are one output of a strategy process which help to guide and assess the strategy implementation process, but they are not a strategy in and of themselves.  If you have not documented the strategy, then you can not assess the principles.  They are just rules devoid of rationale which, themselves, introduce new risks to the organization if not incessantly questioned, defended and tweaked.

Take, for example, the motherhood guiding principle:  “Provide access to all banking services consistently across all channels“.  By itself the principle is difficult to envision or question.  Do we expect full mortgage application submission to be a popular feature on ATM?  Are our ATM interfaces not already daunting enough?  How will a hurried queue of customers feel if they cannot get cash because someone is laboring through a mortgage application on the only ATM in the area?  What is the strategic thinking and what competitive advantage are we expecting to materialize?  How can a broad set of stakeholders envision the target state and provide feedback based upon their unique knowledge and experience?

Strategy: Why so many perspectives?

This entry is part 5 of 6 in the series Doing Strategy

A key part of the business strategy for most banks is to become more customer-oriented.  Some banks are accomplishing this by giving increasing control to executives who are responsible for broad customer segments.   These customer-segment-oriented strategies (I call them “segment strategies“) are an important part of the bank’s business model.SegStrategy

Segment strategies impact the bank’s operating model and these impacts end up in the bank’s enterprise target operating model (TOM).  Due to the complexity of the enterprise TOM, subordinate TOMs are sometimes created for areas of focus such as branches, CRM, digital channels, processing centers, product areas, etc.  Each of these subordinate TOMs might have its own executive sponsorship and leadership.

When you multiply the number of customer segments times the number of TOMs you get a lot of communication paths that must be intact in order to formulate a holistic strategy.


Reading List: Ishmael, An adventure of the Mind and Spirit

This entry is part 6 of 6 in the series Doing Strategy

I talk a lot about technology strategy and the importance of technology strategy to business strategy.  I think it is important to understand the importance of technology historically in order to grasp what is actually at stake here.  For that, best to go back to ancient times and look at what effect past technological advances have had on people.

Let me just cut to the chase.  The primary purpose of technology to business is to exploit it to gain competitive advantage.  The main point of competitive advantage is to use it against your competitors.  Extreme cases of advantage generally are used to wage war against ones competitors.  War is not the same as competition.  Competition is natural as all plants and animals compete.  This is the basis for evolution (or creation if you prefer).  War, a uniquely human activity–and specifically unique to man after the advent of technology, means to annihilate ones competition completely as much as possible.

This means that you need to think beyond basic competitive advantage.  Does a new technology give your competitors sufficient advantage to wage war?  Think about…

  • the capability to manipulate oil prices being used to wage an economic war against a nation,
  • the capability to manipulate local or national elections being used to wage a political or economic war against a class,
  • the ability to attack networks and computers being used to wage an electronic war against an organization or group

…but content for another post because I am wandering well beyond the scope of the book now.

A notable instance of this is the ferocity with which agricultural and post-agricultural peoples have murdered hunter/gatherer, herdsmen and other pre-agricultural peoples for thousands of years.  Consult Wikipedia on this if you like which, at the time of my reading it, included: “Modern scholars typically view the stories of Adam and Eve and Cain and Abel to be about the development of civilization during the age of agriculture; not the beginnings of man, but when people first learned agriculture, replacing the ways of the hunter-gatherer.

An easy and inspiring read about this can be found in Ishmael, An adventure of the Mind and Spirit: