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With over 2,000 strategic planning meetings and hundreds of speeches to audiences all over the world, Robert Bradford is not just another speaker - he is dynamic, interactive, funny and truly THE expert on the topic.  Listen to what THIS client said about Robert's program:  https://youtu.be/2ewCUwXrer0

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Why you REALLY don't want to be like anyone else

Quite often, in strategic planning meetings, I hear well-informed, intelligent executives talk about some trendy new development in their industry.  I hear them talk about a giant bandwagon that all of their competitors are getting on, with genuine fear that they don't want to be the last one in.  This kind of talk usually makes me feel sick to my stomach.

Here's why:  it's crucial, if this is a part of your strategy, to be distinctive.  Sometimes this DOES mean innovation, and keeping up with the latest trends.  But...when all of your competitors are doing something already, and you are not, you are never, ever going to distinguish yourself by following them.

If you fall into this trap - and many smart executives do - you'll end up making your company look just a little bit more like your competitors every time you take a step in that direction.  Your customers will notice, and will start to think of you as being just like - or at least, very similar to - your competition.  When you reach the point where the differences are small enough, only one difference is likely to matter to your customers - and that is price.

This means that the end game of following the herd is inevitable price competition and commoditization.  Entire industries have been hit hard by this tendency, yet we seldom stop to challenge the tiny steps we take that make us part of the problem.

Want to hear about how and why to avoid being part of the problem?  Get strategic planning speaker Robert Bradford for your next meeting or association event, and get an entertaining, interactive and memorable jolt away from strategic me-too thinking!

The Worst Strategy in the World

I’m super open-minded about strategies.  Sure, I have a penchant for specialty strategies (because who doesn't like high margins?), but you can make a case for any strategy if you are willing to build the required competency.  There is one strategy I see far too often, though, and it scares me every time I see it.  That strategy is:  the same thing everyone else does.  I see it all the time, in big companies and small, and it’s one of the dumbest strategies you can use.

Similar strategies are almost always doomed to fail for one simple reason:  you are attempting to succeed with the same customers using the same competency that your competitor is using.  Now, if you have far more resources than your competitor, you might come out on top, eventually.  If not, you’re doomed.  But let’s look at the “more resources” approach:  if you have more resources, why wouldn't you use them to force your competitor into the LESS desirable space in your market, guaranteeing the top spot – and profits – for yourself?  There are two answers for this.  One is that sameness feels safe.  The second reason is that sameness creates the illusion that you can obliterate your competition and dominate the entire market.

Both of these reasons are nonsense.  There is nothing safe about sameness – in fact, it’s probably the most unsafe strategy you can pursue.  Faced with similar competitors, customers invariably choose the competitor with the thinnest margins – the highest cost offering sold at the lowest prices.  That’s just a recipe for poor financial performance.  And long-term, your brand loses meaning in the eyes of the market.  You become a clone rather than a distinctive, emotion-laden brand.  There’s no money in that.  The second reason is equally specious:  markets rarely tolerate complete obliteration of competition.  Don’t believe me?  Think of some of the most ballyhooed brands in recent times – they ALL still have competition.  Not one of them – not even behemoths like Apple and Wal-Mart – have escaped the world of competition.  What this means is that the sameness strategy simply transforms your existence into a struggle at a much higher level than you faced before.  You become Coke and Pepsi, duking it out over market share in a game where 0.1% is over $50 million in stakes.  It’s a playable game, but it’s not the endgame we all fantasize about.

How can you avoid the trap of sameness?  Here are three questions EVERYONE should ask when looking at their strategies:

1. 1.       Why Us?  Why would customers find this so awesome they would flock to our brand?
2. 2.      What is the difference?  Can you point to a SERIOUS difference between our strategy and our competitors’?
3. 3.       How does our competency stand out?  What know-how base do we have that our competitors are unwilling or unable to match?

If you have solid, robust answers to these questions, you’re on your way to better profits.  If not, maybe it’s time to re-think HOW you come up with your strategies.

If you’d like ideas about how to come up with better and more unique strategies, drop me an email…it’s what I do, and I love it!

A Sure Sign Someone isn't thinking at Hershey's

I came across this somewhat bizarre article today which describes Hershey's legal efforts to keep British chocolates out of the US.  The base story - which is about Cadbury's - actually leaves Hershey with a leg to stand on, since they do have the legal right to sell Cadbury branded product in the US.  However...and this is a big however...the underlying story details Hershey's attempts to keep all sorts of other chocolates out on the basis of the claim that the importation of these brands (Yorkie bars and Rollo - which Hershey doesn't have any right to) will be "too confusing" for people looking for the Hershey brands.  Not only is this backward nonsense that Hershey's lawyers (and brand managers) should feel ashamed of, it completely overlooks the fact that, while Hershey brands are heavily stocked and distributed almost everywhere in the US, the British brands are rarely available outside of specialty shops and highly-marked-up foreign foods sections of grocery stores.  In other words, if you actually CAN find the British product, you'd have to be an idiot to actually confused a four dollar Yorkie Bar with a two dollar York Peppermint Patty.  So, what Hershey considers worth the considerable legal investment and public relations backlash is something that amounts to just keeping any competing product out of the US no matter what - or at least making it very expensive for them to be sold at all.
Maybe I'm missing something here - after all, I'm not a lawyer and I don't know everything about these cases - but on the surface it sure looks like anti-competitive legal maneuvering.  I'd be happy to hear the other side of the story - but to me, this isn't just poor thinking, it's poor marketing and poor strategy.  Any manager who thinks the products even exist in the same market space needs a lesson in marketing strategy, and probably needs to learn a bit about how the public views this kind of legal maneuvering.  As for the headline grabbing story about the Cadbury products - all I can say is that it's a shame that the preferences of customers weighs so little on the minds of the folks at Hershey's.  Fighting customer preferences is perhaps the surest way I can think of to waste money in any consumer market.  Maybe someone with a more strategic brain should look at this issue?

Compass Points audio!

This week, I've started producing Compass Points audio!  You can listen to the latest edition here: http://www.hipcast.com/podcast/HJqz90VQ
 

Does being easy make it cheap?

I had a great conversation with my favorite coaching client a while back.  In it, I suggested that some of the things she does are incredibly valuable, and that she should be prepared to charge what they are worth.  In the ensuing conversation, it became clear that she didn't see value in them because these things were easy for her to do.  In that moment, I realized I do the same thing - I discount my own value when I do things that are easy for me, even though some are incredibly difficult for others.  One of the core ideas in strategy is that we should learn to do some things so well that what is easy for us is both valuable to customers and difficult for our competitors.  What do you do that fits this concept?  Do you charge enough for it?

Porter’s Five Forces Model, Generic Strategies and the Saddle Curve

Most students of strategic planning are at least aware of Michael Porter’s five forces model of competitive advantage.  These forces – supplier power, customer power, threat of new entry, substitute products and industry rivalry – are an excellent way to understand the most powerful forces affecting a company’s competitive position and likelihood of profiting from a market.  In Simplified Strategic Planning, we examine the external variables which are most like to drive these forces for a company by researching the external data (such as the balance between number of customers and number of competitors in a segment, the threat of substitute products or services, and the economics of the supplier market).  Internally, a company’s strategy can be developed to adapt to, and sometimes, mold these forces as well, ideally by focusing on the use of a unique strategic competency that separates the company from competition and likely new entrants.

One great way to think about all of the five forces in your strategic planning is to think about the choices (outside of purchasing from your company) available to your customers and suppliers.  Anything that increases the choices available to customers decreases your power, and anything that decreases their choices increases your power.  

One of the key ideas we use in Simplified Strategic Planning starts with the basic question of how you can gain – or lose – market share to a competitor.  One of the most fundamental insights that affects market share is a behavior continuum we refer to as specialty and commodity behavior.  Michael Porter describes these behaviors in his “generic strategies”, but usually refers to them as “uniqueness as perceived by the customer” and “low cost position”.  As I state in the book “Simplified Strategic Planning:  A No-Nonsense Guide for Busy People Who Want Results”, both of the generic strategies that work for the specialty focused company are viable strategies for a profitable business – that is, the differentiation strategy (specialty/broad market) and part of what Porter calls the “focus” strategy (which he uses to cover both specialty and commodity/niche market).  I would contend that the commodity side of Porter’s “focus” strategy (what I call “alley shop”) is not viable – since it generally results in both low volume and low margins – and that is why we split the niche strategies into “segmentation” and “alley shop”.

In “Simplified Strategic Planning”, I noted the existence of the “Saddle Curve”, which is simply the tendency of companies to achieve higher profit on either end of the specialty/commodity continuum.  The basic idea behind this curve is that companies with a clear commodity or specialty strategy will be more profitable than those that flounder in between the two.  One of the reasons why the five forces exert such power on profitable strategies is that they tend to force companies away from the extremes of this curve and into the middle, where profit is minimized.  As an example, consider a situation where customers can choose substitute products.  The customers’ desire is inevitably to maximize value by getting better products, better service and lower prices.  Where the customer has less choice, the real-world trade-off between these can be forced into the customers’ decision-making processes (“Do I buy the expensive, better product or the cheaper, worse product?”).  Customers who have more choices can demand that these compromises not be made – which inevitable drives a company into the middle of the curve, where profit is lower.  The only force that usually does not show its main effect on the saddle curve is the power of suppliers.  When that force comes into play, the profit of the company is affected because profit can be the result of forcing suppliers to move towards the center of the curve.

Where do you see your company on this curve?  How do the five forces affect your position on the curve, and your strategies for positioning in your markets?  If you would like a straightforward, no-nonsense process for working these ideas into your strategic planning, consider attending our two-day simplified strategic planning seminar soon!