Acknowledging weaknesses: What would it take to beat you?

It’s human nature to want to spend our time thinking about where we’re strong, or at least ignoring some of our weak points. Sometimes, but not all the time it’s actually critically important to think about. It’s like choosing to standing in front of the mirror with your shirt off, and then choosing to going to the gym. Not as much fun as going for pizza and beer. However, constructively identifying your weaknesses, and then moving to fix them is the only way to move ahead.

Perhaps it’s time to dedicate meetings to identifying and tracking progress on:
– Addressing customer dissatisfiers
– Who you’re losing business to and why
– What it would take for a competitor to eat your lunch
– Your greatest operational and strategic vulnerabilities
– What options your organization has to mitigate those weaknesses
– What options your organization has to strengthen your ability for reinvention to build this capability

You get ahead by relentlessly being brave enough to stand in front of the mirror, and then doing something about it.

Do you already know the answers?

The concept of continuous improvement suggests that organizations can push forward and create continuously stronger customer value by consistently and relentlessly improving all aspects of the client experience, and the operations behind it. The client experience is a result of the capacity of the organization to create that desired experience. Where the capacity and consistency for the specific strategy is strong, the organization has the ability to deliver the intended value to the intended market. Where the capacity and consistency is weak, the organization will fail to align resources to deliver on the strategy. In this instance, the client experience is inconsistent, and the organizations ability to capture a desired market position is weakened or compromised.

Through any corporate improvement focus it’s important to maintain connection to both client perspectives, and those who are closest to the work. The funny thing about thinking you know the truth of a situation is that everyone’s version of the truth differs based on their experience.

Don’t assume you know what the real issues are from your clients perspective
Don’t assume you know which ones are most important
Don’t assume they are all equally important
Don’t jump to conclusions without doing root cause analysis
Don’t assume that areas where you are weak are where you start, if they’re not important to the client, it may not be an issue

Build your improvement priorities based on importance/performance gaps from the perspective of the client. Leverage the operational knowledge of your internal experts. Never be satisfied with the successes of yesterday.

Thinking you already know where the problems exist, the answers to those problems, and how to go about fixing them … without any data … can be a mistake.

How hard do you push?

If you live in the world of strategy long enough, you’ll begin to understand the concept of potential in a deeper way. It transcends operational barriers and competitive limitations. If you read enough case studies, you’ll come to learn that real vision combined with real leadership blows away every limitation we impose on ourselves. With appropriate imagination, ability to translate conceptual to real, and the skills to truly lead people, there’s really not much that you cannot do.

It starts with how big you think:

Do you play by the rules a bigger competitor defines OR -> Change the rules of competition within your industry?
Do you compete on the same value discipline as your competitor OR -> Differentiate so you’re no longer directly competing?
Do you seek to create a new feature that no one else has? OR -> Create a completely new market that no one else is even thought about?
Do you make an incremental improvement? OR -> Make your competition obsolete?
Do you change how your customers buy products? OR -> Change how the world uses your technology?

It can be done.

Having framed all that up, every leader within your organization is motivated in different ways, and to varying degrees. Some are out to change the world, others are out to maintain stability. We need all perspectives in the room to balance off the thinking, but a prevailing overall temperature will emerge as the pace to which your organization moves. If you consult, you’ll notice the temperature change so very clearly when you walk in the room. So the question becomes, for every client you work with, “how hard do you push this client to move to the next level?”

I’ve seen all kinds of consultants. Some blow sunshine because that’s what their clients want to hear. They don’t move the business forward, they just create a false sense of progress. Others tell the stark truth, and shine a light on opportunities for improvement. They’re not always welcome, but they are the only ones that are truly worth their rate. And most combine the two to some degree.

It is a unique blessing to live in the world of strategy all year long. It’s a world of opportunity, potential, seeing things from the highest level, and helping clients recognize specific opportunities for improvement.

Be close enough to your clients to understand their operational realities so you don’t lose touch.
Be objective enough so that you can still see opportunities that they don’t.
Always take your clients one step further, and accomplish this by educating.
Be patient, and recognize that there are reasons why your clients choose the pace they do.
Be a catalyst for change, and always shine a light on the next opportunity to improve.

There are few people who have the opportunity to impact the quality of corporate level direction, as most functions only consider progression at a functional level. This is why driving the greatest degree of continuous improvement possible is so important.

Cooperative strategy

It appears that many cooperative financial institutions see a limited range of strategic options in how to differentiate, especially within a bank-dominated competitive environment. Corporate stratagems appear to be fairly monochromatic in nature. As credit unions scale to a provincial reach, they can in many cases go head-to-head with banks using a similar competitive approach to what the banks are using. After all, it’s what we know. Operational excellence is a constant, with a deeply commoditized product suites, and most organizations have shifted their focus to wallet share, customer intimacy and increased specialization in wealth management. The last of which is really the best strategic option for most credit unions, given their scale disadvantage, history, and values. The problem is that banks have started shifting their focus there as well, and with deeper pockets, can credit unions really maintain an edge on that alone?

Are credit unions scaling up to be small banks, or is there an opportunity to do something socially or economically important with this model?
Is there a unique aspect of their governance structure or values that creates an opportunity or value for members that banks can’t readily duplicate (competitive advantage)?

In my mind, the most tangible differentiator between the two models is who is meant to benefit from the creation of value. With a publically traded FI, the model exists to remove profitability from the community and place it in the hands of shareholders. It’s a good model, and it works. With a cooperative, the model exists to benefit the customer. It’s a concept that most people don’t have their heads wrapped around, and probably because many cooperative business models don’t accentuate this in a clear enough way. So how can a credit union leverage the opportunities that should come from a truly altruistic motive behind operating?

I am inspired by the work that BECU in Washington has been doing. Their advertising simply has to catch people off-guard, in a time when everything appears to be free at first bluish, but only at first blush. An organization that isn’t completely selfishly motivated, and whose unique product offering isn’t just a guise. Their branding and product development so clearly communicates how credit unions are unique from banks. They have credit cards whose interest rates decrease as your credit improves. After all, credit unions are here for you, not someone else. They advertise rates that beat banks ONLY for members… because they don’t have to write dividend cheques at the end of the year. When your priority is acting in the interest of the member sitting in front of you, the business model HAS to act differently than that of a bank to truly live out the values.

As credit unions begin to scale up and feel more capable than ever before, the temptation may be to challenge the big 5 on their home playing field. But what would happen if our business model, operations, advertising and client experience promised something better and was able to consistently make it happen?

Who wants to talk about it?

One test of strategy and metrics I’ve used for years, and I’ll continue to stand by, is that if your measures and plan aren’t interesting… you have the wrong measures and plan. If people don’t want to talk about them, you have a problem. A corporate strategy review is the perfect place to get into the details of how things are going. If people aren’t anxious to get in the room and hear what is going on, you have work to do on your strategy. If they aren’t interested to hear about the story that the measures are telling you, the measures aren’t right.

Sometimes this means that right from the top, the BHAG isn’t a BHAG.
Sometimes it means that no one trusts the leaders.
Sometimes it means that your organization isn’t doing anything important.
Sometimes it means that the burning platform went out a long time ago.
Sometimes it means that your strategy management processes are broken.

Regardless of the reason, you have some work to do. Planning geek or not, a compelling vision and a belief that the leaders are capable of taking you there always gets the juices flowing.

How important is making the ends sought ridiculously clear?

Organizational communication of direction to employees is pretty universal. The quality of that direction is anything but.

It’s difficult to argue that employee engagement isn’t essential in making anything significant happen in the/your world. After all, employees are the physical extension of those strategic plans and concepts. They literally deliver your strategy to the customer. And true engagement represents the connection between your employees and a truly compelling vision.

Can you engage employees without a compelling vision? I believe that temporary and limited engagement is possible without a more compelling and longer-term vision in place, however it ultimately falls short of what it could be if greater leadership and vision were demonstrated.

Lionel Urwick once wrote in a Harvard Business Review article that “There is nothing which rots morale more quickly and more completely than . . . the feeling that those in authority do not know their own minds.”

Which is more compelling?

1) Do your job
2) Together, we’re going to put a man on the moon

What is the most important competency, ability or attribute of a strategy executive?

Of course the usual suspects show up here; conceptual thinking, ability to be both strategic and tactical and move easily between the two, broad business acumen, visionary, ability to translate complex concepts into easily understood messages, ability to integrate functions that no one else sees connections between, have the ability to create frameworks, processes and systems that address corporate level challenges and align resources behind a grand vision. I could go on, but if I did I would be wasting your time.

The most important attribute is a relentless passion for improvement. Of course, everything listed above is requisite in being effective, and not just making a mess. However, this is one of the few roles in the organization whose key focus isn’t on justifying current levels of performance. This is one of the few roles (in addition to the CEO) whose entire focus is to drive the organization forward, to create greater clarity on exactly what is being targeted, and to challenge everyone else relentlessly.

Respectfully and relentlessly. Anything less is just coasting.

It all starts at the top

Clear context and strategic clarity are absolutely essential for every other component of the strategy management system to function effectively. It starts or fails right off the hop with the kind of leadership you have, it comes to life with a tight and interconnected strategy management system and only truly occurs with an airtight accountability system.

So when you lay out a strategy development framework that identifies contextual relationships, every single component on that chart needs to directly connect to the top.

That’s real strategy.