The challenge? Find a way to communicate the successes of a software development company to potential clients. The solution? Create a memorable series of video case studies -- in an agile way.
With organizations going through major inflection points in their business, one theme is consistent… companies can’t continue doing what they have always done. So it’s determined that the development of a new strategy is needed to align to the rapidly evolving business landscape. Your team convenes for a ‘planning session’. The end result is some form of a strategic roadmap with corresponding tactics. This gets summarized, socialized, and distributed to the respective teams to begin execution.
Fast forward a few months and management finds progress on the plan is either limited, or the execution isn’t meeting the intended outcomes. Why?
From our experience, this gap occurs when the current reality of the business is not fully mapped to the desired end state. It requires answering some fundamental questions to help assess what it would really take to operationalize these initiatives. Questions like:
- What skills and knowledge are needed to reach your goals and do your current employees possess these capabilities?
- Are additional resources needed? At what capacity are your existing resources and can they truly take on more?
- Are your internal policies, procedures, and processes flexible and agile enough to enable to you to move quickly?
- Is the current organizational culture one that will embrace change? Will inertia or status quo be likely to limit forward movement?
- Is cross-functional, cross-departmental collaboration and openness a challenge?
- Will the existing systems enable your organization to achieve what the business needs?
Taking a holistic view to assess the level of effort in implementing your strategy is critical - because now more than ever, everything is a connected system. It means understanding the organizational, structural and procedural capabilities in order to effectively build the operational roadmap. It means identifying risks and tradeoffs to reach near term milestones and meetsr longer-term goals. It’s figuring out how to iterate and optimize as you execute while still staying true to the end objectives.
In the end, a strategy isn’t a strategy if it can’t be executed consistently and successfully. Bringing the strategy to life so that your customers and employees see and benefit from it is what really matters.
How do you start to differentiate your brand vs. your competition? Think about what emotional end benefits your company can/does deliver. Your customers (or potential customers) now have more choices than ever and differences between the services that you and your competition may be less and less significant. This could ultimately result in a price war which isn’t where you want to go.
One of the best ways to avoid this scenario is to develop a lasting connection with your customers on an emotional level. When customers feel an emotional pull toward your company, they are less likely to spend time evaluating their options and more likely to complete the sale.
Most companies typically communicate “functional benefits” to get customers to engage or transact with them. Functional benefits are ones that a customer directly associates with a feature/service that your business delivers such as “best quality”, “lowest price”, “greatest selection.” While these statements are compelling they may not truly differentiate you because they are aspects that can be fulfilled by other providers as well. Where functional benefits aren’t easily identifiable or differentiated, many times marketers rely on ‘emotional benefits’. Think of an emotional benefit this way… “When I buy or use this brand, I feel ___.”
So you may be thinking how does this translate into someone taking action? Well there is research that shows reasons (or in this case the “functional benefits”) and emotions drive different behavior. Reason generates conclusions but not necessarily actions, while emotions more frequently lead to actions. While you can educate customers on the features and services you have, there isn’t any emotional involvement tied to it which can be the one factor that helps garner the sale.
Here’s an example that will make my point more real.
Consider the Starbucks brand. Its functional benefit is caffeinated refreshment; its emotional benefit is indulgence. When you enter into a Starbucks establishment, you see that the products and experience they sell is so much more than just selling coffee. They pay off this emotional benefit in every facet of their experience. You’re more likely to want to buy more than just coffee and experience the other treats they have to offer. And this is all with a smile from your friendly and knowledgeable barista.
What if I don’t know what my emotional benefits should be?
Well you can always do some market research with your target audience. And keep in mind research doesn’t have to be sophisticated. The point is understanding your end customer with respect to what motivates them to come to your business? What is it about your business that draws them in? Based on these conversations, you’re bound to get some insightful learnings that will lead you to defining what those emotional end benefits are. Then you can integrate them into your messaging, positioning and even consider how your selling and service practices can deliver on this benefit.
For today’s business leaders, the old axiom “knowledge is power” should probably be amended to say “knowledge is power ONLY IF it reflects a strong understanding of real-time information, enables meaningful foresight, and results in prudent business decisions”. Okay, this is a mouthful but you get my point. More and more, companies are making significant investments in business intelligence systems and services to ensure that executives, line managers, and individual contributors alike have access to, can make sense of, and can act upon the most granular data relevant to their day-to-day operations. This data is analyzed and compiled in executive dashboards reflecting key performance indicators (KPIs) and used to update driver-based forecasts with the overall aim of providing proactive and precise support for critical business decisions.
Unfortunately, what often results is analysis paralysis…too many variables, not enough insight, and an inability to distinguish the forest from the trees. No matter how sophisticated or crude a company’s analytical capabilities may be, knowing what to focus on and what not to, ultimately determines success or failure. In a sense, simplicity is always best.
There may be hundreds of variables impacting a business at any given time but effective business leaders typically focus on only a small handful of key drivers. As any decent golf instructor will tell you, the best players limit their thoughts to two or three basic mechanics before striking the ball and rely on muscle memory to do the rest. Similarly, most successful business leaders will tell you that 20 percent of the key drivers produce 80 percent of the results. Knowing how to eliminate the other 80 percent of variables with marginal impact is critical to robust business planning and strong decision making.
Many financial planning experts will tell you that this depends on where your company is in its business life cycle. If you’re a startup or early stage company, they would say you probably don’t have the resources or operational complexity to benefit from a “bottom up” approach. Conversely, they would say it’s imperative for large companies with substantially more resources, integrated processes, and information flow to invest in “bottom up” planning tools as accurate and timely business intelligence, and ultimately good strategic decision making, require a strong ground level perspective. Although neither of these arguments is faulty in and of itself, I would argue that best practices planning and analysis can only be achieved if both approaches are leveraged.
Having worked as a finance executive for technology startups as well as multibillion dollar global enterprises, I have experienced the pitfalls of over utilizing one approach at the expense of the other. In the case of a larger company that lacks meaningful “top down” target setting, management is not able to effectively convey its key growth and operating strategies to business owners and line level employees. Consequently, the “bottom up” plans will often be overinflated and disjointed as budget owners struggle to cover all their bases which often results in sales and expense forecasting that is not in alignment with overall objectives.
What really kills productivity is the seemingly endless iteration required to consolidate the “bottom up” view and resolve the back-and-forth negotiation that invariably takes place between business owners and management. On the flip side, a “top down” model might be better at explicitly communicating management’s objectives and business-level accountabilities, but it does not allow for the feedback loop required to establish meaningful business priorities and effectively course correct as business conditions change. A company that leverages both approaches is much more effective in communicating key corporate objectives and ensuring essential alignment and accountabilities while at the same time empowering business managers to provide the critical feedback and innovative problem solving that is so crucial in successfully navigating an ever-changing business landscape. At a much smaller scale but no less important, an early stage company needs both approaches to ensure that management understands key business drivers (bottoms up) and is therefore able to establish overarching objectives (top down) that are substantive, achievable, and properly tensioned.
Although often overlooked or under resources, strong planning can be even more critical at the early stage as there is much less margin for error. In any company at any stage in its business life cycle, strong financial planning, thought leadership, and decision analysis are predicated on 1) clear and consistent communication from the top, 2) strong alignment and business accountability, and 3) a healthy feedback loop that promotes innovative thinking and operational flexibility.