Strategic Planning an Oxymoron?
I really got a lot out of this discussion between Jeff Lawson, Co-Founder & CEO at Twilio and author, strategist & Stanford professor Hamilton Helmer. The topic is a framework created by Helmer called the “7 Powers” and explains how the businesses that have adopted this strategy have been able to create defensible market positions and thus are adept at keeping the force of competition away. Think of Spotify, Netflix and yes, Twilo. What I like best was the opening exchange about the notion of business strategy coming from the C-Suite alone and how often the needs and desires of the end customer are left out of the plan. I love anything that pokes at entities who fail to start at the customer and work backwards. So much so, that my desire to be in a working backwards environment was the reason I went to Amazon in the first place (more on that another time). This exchange on Google+ and Facebook is great:
My example has always been, for some reason, this always has stuck in my head, Google Plus. If you think back to the early 2010s, Google clearly had a strategy, their strategy was to go beat Facebook.
The strategy required integration of social across every part of Google’s properties. And from people I’ve spoken with, every product manager, every engineer, everyone on the front lines of building all those products were like, “Why are we doing this? Our customers don’t want this. It’s making the products worse.”
But they pretty much had to do it because that was the strategy of the company. And sure enough, customers hated it. Nobody wanted it and they lost a lot of energy in building it. It’s not that they shouldn’t have tried something new. It was that this ‘strategy’ was driven by an executive idea of who their competition was, as opposed to what customers wanted.
Helmer lays out 7 Powers that companies who are highly defensible incorporate, with power defined loosely as the idea that you can craft the conditions in which you operate your busine
Network Effects, Cornered Resource, Scale Economies, Switching Costs, Counter Positioning (Hamilton’s favorite Power), Branding and Process Power.
Good Stuff. Check it out!
// Reeder
