Stop the waffling

The fewest words

You already know the famous cautionary tale of Kodak.

How sales of film, chemical and paper photography fell off a cliff in the early 2000s because they failed to anticipate the adoption rate of the double-whammy of digital cameras (which they invented!) coupled with social media.

Yes, yes, Andrew. We know this — so what?

But did you know exactly how Kodak articulated their value proposition at around the time they were rushing towards the cliff edge?

“Build a world-class, results-oriented culture providing consumers and customers with many ways to capture, store, process, output, and communicate images and pictures as memories, information, and entertainment to people and machines anywhere, anytime; and bring differentiated, cost-effective solutions to market quickly and with flawless quality, through a diverse team of energetic employees with the world-class talent and skills to sustain Kodak as the World Leader in Imaging."

Sigh. I know. You’re asleep already. You can wake up now.

Even employees gave this the thumbs down, with just 25% agreeing with the statement, “The company’s goals are clear, and I’m invested in them”.

So, what didn’t Kodak — and their employees — see?

They missed the fact that their true value proposition was, in fact, just four words: “Store and share memories”.

These four words carry so much more power, and weight.

If they used that as their North Star, they would have directed all their energy to “better ways to store” and “better ways to share” all those memories.

It’s futile to imagine a different outcome, but I’d like to think that in an alternate reality where 75% of their employees understood the four-word value proposition, they would have adapted — and prospered.

Question: What’s the fewest number of words in which you can state your value proposition?

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The master plan

A lot of strategic plans that I read suffer one of two faults. See how yours fares on these:

• Fault #1: It ONLY has a static view. It describes the organisation as it is, not as it wants to be. It’s essentially a catalogue of functions, or roles, or services, along with some initiatives to make these better.

• Fault #2: It ONLY has a future view. It describes an aspiration, but without the steps, or stages, needed to get there. There’s no underlying logic of the pathway, or roadmap to success.

So, what should a strategy that avoids these faults look like? I can tell you in just 33 words. That’s how long Elon Musk’s original strategy was for Tesla. Tell me what you think of this, his so-called ‘master plan’:

1. Build sports car.

2. Use that money to build an affordable car.

3. Use that money to build an even more affordable car.

4. While doing the above, also provide zero emission electric power generation options.

Yes, that really was his strategy. If you don’t believe me, look here.

Step 1 was achieved in 2008, with a USD$120k ‘proof of concept’ low volume roadster. They’re so rare, I’ve never seen one in the flesh. Step 2 was achieved in 2012, with the Model S, which was at the upper bounds of ‘affordable’ (about USD$80k). Step 3 was reached in 2018, when the Model 3 entered production (at about USD$50k). Musk continue to claim there’s a USD$25k car in the works.

There’s no question that this strategy trajectory has worked. It was an unassailably strong logic, when you think of it across a timescale of a decade. And, Musk and team used that decade to end up selling a million of those cars last year. And, they’ll do more again this year.

Question: How would you explain the trajectory, or logic, of your strategy over time?

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Origin of the species

And, while we’re talking cars . . . today, there’s a very good chance you drive, or your family owns something like this. Most commonly called an SUV (sports utility vehicle), these account for 60% of all new cars sold in Australia.

A generation ago it would have been a hatchback; two generations ago, almost certainly a sedan. But do you know that your SUV has a lineage that goes back almost 100 years? Back in the 1930s General Motors created the origin of the SUV species.

They rightly called it a Suburban which spoke to the new ways in which the aspirant upper middle classes were increasingly living.

It still exists today, 85 years later, now in its 12th generation, and still selling well (at least in the USA where its size is an attraction, not an annoyance). It even has a star on Hollywood’s Walk of Fame, as the car has appeared in 1750 films, and in at least one TV series every year since 1952.

So, what did GM get right?

They got the essence right.

At first glance, it’s just a multi-seat vehicle, sitting high, on a truck frame. But think about why you like your SUV: its essence isn’t its space, it’s its flexibility. You can move people, or stuff. Lots of people, or just one or two. And, you can get people — and stuff — in and out easily. GM did what Kodak failed to do - understand the true value proposition of these cars. They’re at 10 million and counting.

Question: What’s the essence of your key product or service?

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People ask me two common questions about this newsletter: (i) How long does it take to write?; and (ii) Do I enjoy writing it?.

My answers: (i) this one took 40 minutes (on a flight from Sydney to Adelaide); (ii) yes, very much. My method is straightforward: (i) observe the world around me; (ii) note that which is absorbing, noteworthy, or entertaining, and (iii) relate them to strategic questions that I’m discussing with my clients. Simple.

If you’re absorbed or entertained for five minutes, then please click the heart - it means a lot to me to know you’re reading.

Have a great week and see you next Friday,

Andrew