Applying Strategy to Achieve World Class Organizational Performance
By: Matt Modleski, Dusty Grainger, and Tom Stovall
Time is the one constant in the world. Each day has 24 hours, or if you prefer 1440 minutes or 86,400 seconds. It would seem that we could all agree on that basic premise, and we also could agree that if everyone played by the same rules, that time would be a level playing field regardless of the competitive scenario.
The challenge with this premise is that when in competition, strategists don’t want to play by the same set of rules. In fact, they seek to establish the rules by which the game is played. Their goal is to shape the competitive metrics so that their strengths may clearly be positioned against a competitor’s weakness. And with the dramatic change occurring in the healthcare marketplace, the metrics by which providers, payers, and patients select suppliers and business partners are constantly evolving.
Infamous US Air Force fighter pilot and strategist John Boyd (infamous because he was brilliant, yet brashly opinionated and not aligned with Air Force thinking at the time) first realized that time was not a level playing field. He realized that even against a superior competitive aircraft he could achieve victory by controlling the tempo of the decisions made and in effect, use that compression of time to confuse a competitor to the point they either gave up, or made a very serious and fatal mistake. It was many years later that Boyd put what he learned about fighter aircraft into practical strategic language, but the message was the same.
Every competitor has a decision cycle time and the crucial fact that’s important is this: Either your decision cycle is faster than your competitor’s, or you are reacting to a competitor who is controlling the situation with a faster decision cycle.
John Boyd defined and characterized the decision cycle time with the acronym, “OODA Loop” (Observe, Orient, Decide and Act). The OODA loop has been written about by Robert Coram in a biography entitled “Boyd,” and by Chet Richards in his book, “Certain to Win.”
OBSERVE: Sun Tzu, the renowned father of strategy said: “Today’s battles are information battles because information determines both perception and opinion. Those who use information effectively, both to attack and defend will win. Those who do not will lose.” While that was written some 2500 years ago, it remains essentially true and forms the foundation of effective strategy. Yet many organizations have found themselves either lacking to some degree in essential knowledge or placing too much emphasis on internal information.
At Stovall Grainger we believe that knowledge of self, the competition, and the terrain is essential to creating winning strategy. You must also have Specific, Measurable, Achievable, Realistic and Time-bound (S.M.A.R.T.) clearly communicated objectives. We address these and other components of strategy and competitive positioning in our customized Building Competitive Immunity® workshops and in our sales and marketing consulting services.
Sun Tzu believed that spies were some of the most important personnel on his team. “Spies” are those individuals who are able to gain insight and information on industry and customer issues that may not be available to the casual observer. John Boyd knew that obtaining information was critical to achieving success, but just as important to victory was the need to update that information rapidly through observation. It is absolutely critical for organizations who desire to operate inside their competitor’s decision cycle to establish what will be observed, by whom, and how it will be formally communicated.
Many organizations appear to have an inordinate amount of energy focused on internal information sources and micro issues. These issues are relative to their business or therapeutic categories rather than the macro issues that are facing their customers’ global success, both economically and clinically. Your observation should be focused on the terrain, the competition, and the competition’s reaction to your latest move. If you are operating at a higher tempo than your competitor and using the Cheng and Ch’i of strategy (the expected and the unexpected), then that move by your competitor will either be predictable, erratic, or potentially fatal to the competitive effort. If you find you are consistently reacting to your competition then very simply put, they are operating inside your decision cycle.
Stovall Grainger assists organizations with leveraging the value of understanding larger issues that are driving your customers’ behaviors. To use a quote from the great Wayne Gretzky, to skate to where the puck is going to be. We work with sales and marketing teams to develop necessary skills for gathering and interpreting information from customers and other sources influencing the marketplace. In essence, we teach teams how and what to “Observe.”
ORIENT: Andrew Grove of Intel fame said “An external orientation is vital. Three basic elements are required:
- Focus on the way customer needs are changing;
- Paranoia about competitors; and,
- Staying ahead of customer needs.”
Orient, the strategically crucial component of the OODA loop requires further examination.
“Orientation” clearly aligns with SGI’s Building Competitive Immunity® approach to knowing the “competition” as well as the “terrain.” Orientation is critical to making strategic decisions because unless we are oriented to “new realities,” we are making all of our decisions based on old ones. This can be fatal if your organization is operating at a slower tempo than your competitor, because each one of your reactions will be made to “old realities” and your competition can then operate freely to shape the marketplace. A superb example of this phenomenon is, Apple rendering the Sony Walkman obsolete with their introduction of the iPod. Sony was more concerned with protecting their intellectual property manifest in Sony Music and Sony Pictures than effectively competing within the “new digital entertainment realities.”
External orientation to the changing terrain is a vital component of competitive positioning, and SGI demonstrates how to develop this external orientation within organizations. By focusing on the changing terrain in healthcare and bringing more meaningful dialogue to your customers, you will also be helping shape the competitive arena by “staying ahead of your customer’s needs.” Once again, the tempo at which you do this will determine if you’re shaping the competitive marketplace or responding to one that your competitor’s have shaped for themselves. Wharton Professor George S. Day said, “A better view of strategy is being so focused on the customer’s business that you are able to act on emerging trends and issues before the competitors can sense and react”. This assertion is the equivalent of executing the tempo of your decision cycle inside that of your competitors.
John Boyd wrote a paper on his theory for developing new and creative thinking and he titled the work “Destruction and Creation.” The essence of this work, though overly simplified here, is that unless the perceptions that bind current pieces of a solution together are destroyed, the ability to truly create new thinking is limited by those old perceptions. In other words the current structure of your organization and the paradigms that have been created within that structure alter the lens through which your organization views things…in some positive and some not so positive ways. This principle applies in leadership as well, where the lens with which people view their “new boss” is simply the lens created by their previous experiences.
It was Boyd’s belief that developing a truly creative solution to a problem, required separating all of the potential solution’s components ,free from the perceptions that bound them previously, and then based on the objective at hand, devise the best possible solution needed to be assembled from the pieces. In business terms John Boyd would have said that if what you’re doing isn’t working, it would be a less desirable option to tweak it than it would be to take all your talent and create the optimum solution for the new reality. Consider photography, for example, and the move over the past decade from film based cameras to digital, and you will get the “picture” (pun intended!).
New leaders have the potential opportunity to clearly differentiate themselves from their team’s previous leaders with a “destruction/creation” mindset. SGI’s “Active Leadership®” Phase I, shows leaders how and why this is important. Simply stated, leaders can start fresh with a new view regarding strategy and tactics, or they can manage through all the baggage created by their predecessors. If they do the latter, when it comes time to “Decide and Act” within the decision cycle (OODA Loop), a better lead organization will get inside your decision cycle and out perform you.
DECIDE: Decisiveness is one of the foundational practices of successful strategists and effective leaders, but there is so much about decisiveness that needs further exploration. Decisive Individuals are less frustrating to follow, and thus contribute greatly to operating an efficient decision cycle.
In Active Leadership® Phase I we give your leaders perspective on competence and confidence and how the two contribute to decisiveness. In Phase II we discuss teamwork, and that brings us back to the OODA Loop. When most teams in Corporate America do teambuilding, it is viewed from the perception of “building a bond” between members of the team. We agree that that bond is important, but we also believe if leaders are executing a “Personal Respect” strategy, that the real value of teambuilding will be to improve the speed of the decision cycle on that team. In other words, teambuilding should involve using the OODA loop to solve hypothetical but relevant problems that can be debriefed for key learnings. It can be fun, but it must be challenging and rewarding.
Many times in simulations, the most strategic components of a decision cycle, Observe and Orient, are minimized. It is the nature of tactical individuals and teams collectively, to Decide, Act and “be done.” In order to really have strategic relevance, the entire OODA loop requires integration including the “Observe and Orient” elements. Teambuilding should create an intuitive, thinking team that continues to accelerate its own decision cycle. It is imperative that the team has clear communication from the “front lines” (observe) as well as “expertise” on the terrain for orientation. Decisions must be made on new realities, not old perceptions.
This type of teambuilding will solidify what Boyd called implicit guidance and control versus the need for explicit guidance. The military fully understands the benefit of this intuitive communication on the decision cycle. It is the reason that they practice real world missions over and over again with their teammates. The key in business is to have a team that intuitively knows what one another thinks which permits a higher tempo on the decision cycle and ultimately permits your team to control the situation. Active Leadership® Phase I assists in creating the individual bond necessary for implicit guidance.
This is very easy to measure in your current market. When there is a significant change in your marketplace, who is first to execute against the new opportunity, you or your competitors? The answer tells you where your team stacks up in its ability to shape the market.
So how do you recognize and incent this behavior? High performing teams have very specific characteristics including aligned incentives. They have a common purpose or mission that supersedes individual egos. Rewards for achieving the team objective should be balanced with individual rewards and there is ownership and accountability to the mission by all members of the team.
ACT: When a strategist Acts, it is with precision and lethality so that ideally, the competition has been won before the battle occurs. Sun Tzu wrote that all strategy involves misdirection. In her book “Thick Face Black Heart”, author Chin-Ning Chu writes about the distinct advantage that the eastern culture has over the west when it comes to use of this misdirection. When we discuss misdirection in Building Competitive Immunity® we teach teams to use it to “control the situation.” This is where “Cheng and Ch’i” fit into the strategy equation.
Ch’i is the unique strength that is established through misdirection (Cheng) and is relative to what is observed and how it is oriented. What is chosen as the Chi is what observation and orientation suggests gives the best chance to achieve our objective quickly. The Cheng is simply what we want the competition to be worried about and focused on while we execute our Chi. An excellent example of this was in the first Gulf War where General Schwarzkopf (based on John Boyd’s wisdom) caused the enemy to think he was going to attack directly (Cheng) while the Allied Forces carried out a devastating flanking maneuver (Ch’i).
The “Act” component of the OODA loop; once executed, transitions immediately back to “Observing.” It is critical that the observations then be Oriented to the new realties of the situation rather than “yesterday’s” realities. Only then can meaningful decisions be made and Acted upon to further your progress toward reaching your objective. Acting with precision and a strategic solution (a unique strength) is what Building Competitive Immunity® teaches.
We know there are many, many product features and benefits thrown at customers with the hope that “one of them sticks.” A strategist would never take that approach, nor would an organization concerned with its decision cycle time. We believe there are only two strategic reasons to make a call on a customer; the first is to gather terrain information, and the second is to execute strategy. The team that aligns their unique strengths with their customers’ needs and challenges quickest will have shortened their decision cycle time over that of the competitor and will be progressing to their next objective.
With this as context, what can Stovall Grainger Inc. do to assist you and your organization to develop a more strategic approach to the marketplace?
Stovall Grainger believes in the value of controlling the tempo of operations in business. We feel an obligation to help our clients apply the strategic process to every aspect of their organization as we believe that this is what leads to world class success.
SGI can assist your organization in evolving strategic competencies in several areas. If you are in a business that will never face competition then you don’t need to read further. Otherwise, SGI can assist you to take the offensive, execute more strategically, and shorten your decision cycle time in order to beat your competition.
SGI Capabilities Include:
Identifying and hiring Strategists. We can work with anyone from your hiring managers to the staffing department to put final candidates through a simulation that will ultimately determine if they understand and can apply a strategic approach. One question we feel absolutely shows someone’s potential here is to ask “what is the number one challenge their current customers are facing in that customer’s business model?” If they don’t know what that number one challenge is, we would raise a red flag and so should you.
Hiring Leaders. Our second area of competence as it relates to staffing is the area of hiring Leaders. We will probe whether your candidates have a “strategy to lead” or whether they are simply managing and hoping leadership takes care of itself. We will use our Active Leadership® Model to assess your candidates, and the assessment will be on Leadership not Management.
Job Competencies. We assist organizations in the developing of job competencies that are more “objective” than most specifically in the areas of “Leadership” and “Strategy” or “Strategic Thinking.”
Sales and Marketing Training. Our approach to Sales and Marketing training is unique, focused, strategic and most importantly, builds competitive advantage for your organization. That’s why we named it Building Competitive Immunity®. One area that is consistently discussed in business is “strategy.” For example…
- Can your team discuss strategy with a common context or understanding?
- Does Marketing uncover multiple winnable positions based on a clear and current understanding of customer strategies and critical success factors?
- Does your sales team know how to position, within an account, a single strength against a competitor’s weakness or is the approach like most… “throw everything against the wall and see what sticks?”
- Have you ever conducted WarGames to see where your strengths and weaknesses are, and
- Are your competitive analyses “oriented” in ways that take into account current industry trends and customer critical success factors or do they simply rely on focus group insights?
We teach strategy in a way that your organization can process and apply. Just think about the decision cycle advantage you will obtain if your Marketing and Sales Departments speak a common language and are in fact both dialed in to your “winnable positions.” Your solutions will then be more compelling and strategic (relative to your customers’ business), and execution will be more precise.
If Marketing is “observing and orienting” based on old information, perceptions or inward focus, your organization will be disadvantaged, it’s just a matter of time. And if Sales cannot provide solutions that are linked to their customer’s critical success factors and strategies, someone may flank your organization. We can help link your internal departments with strategy in a way that builds competitive immunity, just try us.
Most training fails at implementation. John Boyd’s theory of “Destruction/Creation” is the easiest example we’ve seen to explain why. Simply stated, the old perceptions that once worked well are the “lens” through which any new approach is viewed. Most of the time, the old lens and perceptions serve an organization poorly when they’ve reached a strategic inflection point, and quite honestly there needs to be some “destruction” of the old ways of doing things. Great strategic minds know this and strategic organizations are consistently working on the “observe and orient” sections of their OODA Loops.
When strategists see a dysfunctional component they don’t tweak their organization, they redefine it, and put all their talent and pieces on the table and start over to create the customer focused organization they need. Texas Instruments and IBM have endured these types of overhauls after much pain. Polaroid missed its strategic inflection opportunity and now is essentially irrelevant to most photographers and barely exists, today.
Not only would we suggest our strategy training, but we would like to be part of your implementation cycle. Ultimately you need first line mangers that are strategic but in the interim, we will help implement this strategic process and evaluate its progress along the way.
Retaining the best people in your organization must be a priority for you if you seek to operate inside a competitor’s decision cycle. Here’s a simple question; “what is your strategy to lead?” If you can answer that question, fantastic, you’re in the minority. How about all the managers in your organization and others with supervisory responsibility, how would they answer?
More than 70 percent of people leave organizations because of their boss. If you are turning over more people than your competitor, you are making it easy for them to operate inside your decision cycle. That’s because more explicit communication is required between teammates with little knowledge of each other than seasoned teammates who have grown their ability to implicitly communicate. Active Leadership® Phase I and Phase II address both the basics of earning personal respect from the leader’s followers as well as maximizing performance as a team.
In Summary, Stovall Grainger Inc. can impact all of the following areas that have a direct impact on strategic positioning of your products and solutions, the customer focus of your organization, the relevancy of your products and solutions to customers and the evolving marketplace, and your ability to operate inside your competition’s decision cycle:
- Hiring
- Strategy
- Leadership
- Teamwork
- Account Planning Tools and Consulting
- Training
- Field Training Reinforcement
- On-Line, Self paced skill and knowledge development
- Strategic Skills Development for Sales Professionals and Managers
- Strategic Skills Development for Marketing Professionals
- Customer Interview Consulting Services
- Strategic Skills Fundamentals for Administrative Professionals
- Key Account Consulting and Account Strategy Development
- Implementation and Evaluation
- Sales Proficiency Analysis (Strategic Acumen Indicator®)
- Competency Development
- Specific Account Strategy Development and Consulting Services
We do this through our expertise in Strategy, Strategic Processes, Leadership Development, Healthcare Marketplace Knowledge, strategy workshops, customer driven sales performance surveys, and Consulting Services. We would welcome the opportunity to meet with you and your select team to discuss specific situations where we have delivered on all of the above, but more importantly to see how we may be able to help you achieve your organization’s critical success factors.
Contact us now.
Tom Stovall: tstovall@sgbci.com
Dustin Grainger grainger@sgbci.com
Matt Modleski matt@sgbci.com |
