“The very best strategic thinkers make a concerted effort to reflect”
Those wise words have stuck with me since hearing them in the first class of the 2017 Fall semester. I’m now 18 months past completion of the nonprofit management certificate program. My studies are on hold. When school was out last summer it actually was out for…. at least a little while. Someday I’d like to continue.
For the right now in my life, I’m looking back on the many lessons learned and carried forward from graduate studies. In true exhaustive fashion, I pursued reflection by re-reading the entirety of this blog, copy-pasting resonant passages as I went, then editing and organizing those passages into the index below. I tried to keep each topic to no more than ten, but a few go to eleven.
The topics are organized in four categories: strategic planning, leadership, nonprofit management, and information technology management. The IT management course was particularly fun and especially valuable. I’ve worked in IT in the nonprofit sector for fourteen years at this point. For me, a class about the strategic role of IT in firms complemented studies in strategic planning, leadership, and nonprofit management like peanut butter does jelly.
The purpose of this index is quick reference. I’ve referred back to this blog often in the past couple of years, usually using a custom Google site search to find specific information. Citations are omitted, and several passages directly quote my professors. None of the words below should be construed as my own. Whether you’re on this post because I linked you to it, or you stumbled upon this another way, I’m truly glad that you’re reading and hope you find it useful.
Table of contents
- What strategic planning is
- Strategic management
- Strategic issues
- Strategy Change Cycle
- Strategy mapping
- Stakeholder analysis
- Strategic thinking
- Difference between mission and vision
- Strategy Implementation
- Learning and reflection
- Change management
- Lessons on leadership
- Diversity as a learning and effectiveness paradigm
- Core competencies
- Mission Motivation
- Family friendly policies
- “No margin, no mission”
- The public is the rightful owner of any nonprofit organization
- Board management
- Challenge of ED role
- Strategic leadership
- Effective leadership
- Generative thinking
- Comparative advantage
- Nonprofit marketing
- Reputation management
- Strategic use of technology
- “Stabilize, simplify, transform”
- Business needs first approach
- Technology change management
- Three varieties of IT
- Governance model
- Operating model
- Strategic agility
- Digital strategy
- “Data is no longer on it’s own a strategic advantage”
- Social media “camps”
- Customer centricity
What strategic planning is
Strategic planning is a toolkit. There’s no one recipe or algorithm. You need to be able to bring knowledge to bear and think strategically in context. It’s not a soft science but a hard art.
Leadership really matters. Strategic planning is not a substitute for leadership, it’s a set of tools meant to help leaders.
Two most important tools for strategic planning - speaking and writing clearly and directly.
Every effective process will take advantage of strengths and build on opportunities to overcome weaknesses and threats.
Strategy is a transformative process which does not so much describe the future as cause this future to come into existence through its process
Strategy formation can be an emergent process. Emergent strategies are the result of strategic learning through experimentation and discovery.
Early in the process, limitations and boundaries to planning should be clarified. Mandates and restrictions may put significant bounds on the process or its outcome.
Even more important than going step-by-step is thinking backward from where you need to be to where you are to figure out what it will take to succeed.
If you’re stuck in a situation, attack the barriers.
Conceptually, it is useful to view strategic planning as the front end of strategic management.
The strategic management process is organized around mission, vision, and values and includes strategic planning, results-oriented budgeting, performance management, and strategic measurement and evaluation.
What it means to be strategic
There are lots of different ways to think about strategy, but generally to be strategic means using your resources wisely and getting the job done better.
Generally think of strategies as a pattern that define in practice what an organization is, what it does, and why it does it. Every organization has a strategy, mindful or not.
A strategic issue is a fundamental policy question or challenge affecting an organization’s mandates, mission and values, product or service level and mix, clients or users, cost, financing, organization, or management.
Strategic issues are few in number and emerge from evaluation of internal and external factors.
Strategic issues generally arise on the boundary of the organization with its environment, and have implications for how the org relates to its environment.
Strategic issues do not equal constraints. If there is nothing the organization can do about a situation, then there is no strategic issue. Organizations should focus their most precious resource—the attention of key decision makers—on issues they can do something about.
Strategy Change Cycle
The Strategy Change Cycle is a strategic management process used to link planning and implementation, consisting of 10 steps:
- Initiate the strategic planning process and agree on a process
- Clarify the organization’s mission, vision, and values
- Identify organizational mandates
- Examine internal and external strengths, weaknesses, opportunities, and challenges
- Identify strategic issues the organization is facing
- Review and agree upon strategies
- Create strategies to manage the issues
- Establish a vision for the organization
- Develop an effective implementation or business plan
- Review the selected strategies, progress achieved and whether established plans require adjustment
Mapping is what we do for when thinking matters.
The most common way of identifying issues is through regular conversation. People go to solutions really quickly, often too quickly and before defining what the problem is. The challenge as a facilitator is to hold the conversation open long enough to get a multitude of ideas out. Then work backwards, what is the issue to which they are answers?
“If you want to have a good idea, have lots of ideas”
Start by asking people what do you want to do, then ladder up into the goal system, and encourage them to imagine what they want to do.
Strategy maps visualize the logic of a strategic plan. The map flows upward from actions –> strategies –> goals –> mission
A strategy mapping exercise helps participants make sense of their world, what they may want to do with it, and why; and in doing so the exercise helps participants connect people, ideas, and other kinds of actors into a way forward.
If you make mapping part of your regular process, you’ll have a feedback effect. You hang onto them and build on them.
The key to success for public and nonprofit organizations is the satisfaction of key stakeholders as they define it.
Success happens when people take the time to figure out what stakeholders want, then set clear directions for what the solution needs to do, then consider lots of options to meet the need, then plan for implementation.
Always let purpose be your guide, don’t assume that you wholly understand your purpose until engaging with others.
Strategic management processes that employ a reasonable number of competently done stakeholder analyses are more likely to be successful.
Stakeholder analyses are a key to identifying problems that can and should be solved.
Stakeholders may not always tell you their priorities, but they do hold you accountable for those.
Stakeholders have competing interests. There’s more than one stakeholder to listen to. Listening to one stakeholder of a representative group does not mean that you’ve heard the concerns of that group as a whole.
Wise use of stakeholder analyses can help frame issues that are solvable in ways that are technically feasible and politically acceptable.
Disaggregating stakeholder groups to distill unique attributes is critical to analysis.
It is important to make stakeholders aware that their participation is vital. When you think of buy in, think of co-creation. Buy in is harder when people weren’t involved in developing the plan.
Shared strategic thinking, acting, and learning are what count, not strategic plans in and of themselves.
Strategic thinking is the process of collecting, interpreting, generating, and evaluating information and ideas to shape an organization’s sustainable competitive advantage.
Strategic thinkers are in constant pursuit of innovative ideas that will create a sustainable future for their organization.
Effective strategic thinking, acting, and learning seem to depend a great deal on intuition, creativity, and pattern recognition.
Strategic thinking is something everyone can do, regardless of title or position in the organization.
When everyone on a team or in an organization gets it, hundreds of daily decisions are informed and guided by that common purpose.
Difference between mission and vision
The challenge is that most people in organizations don’t understand the mandates. If you’re not clear about what you’re supposed to do you won’t do it.
Mission is a declaration of purpose. For the mission statement, an organization must ask how it plans to work towards its broad vision. When well defined, a mission gives the nonprofit’s leaders and managers a sense of the current reality, the social problem, and the organization’s approach to the problem.
Vision is a description of what success would look like for the organization. For the vision statement, the organization must ask what are the values or beliefs that informs its work. Vision identifies direction and answers the question “If we consistently fulfilled our purpose with excellence, how would the world be different?” The vision is in effect what the world can be and ought to be, and the visionary gets to say what the world isn’t yet but should be. A vision of success helps not with predicting the future, but with making it.
A vision expresses an organization’s long term goal and reason for existence, and a mission statement provides an overview of the organization’s objectives to reach that vision
If you don’t really believe in a vision - don’t do it. Going to backfire, come off as cynical, manipulative. Vision has to be authentic.
You’ve got to have a high level long term vision and a plan to execute on that vision, but in real life you also have to be flexible and work within the realities of your situation.
The vision should be widely circulated. A vision of success can have little effect if organizational members are kept in the dark about it.
On storytelling, you can throw all the facts and figures that you want at people, but in the end what they’re going to remember are the stories. Storytelling can help present your strategy in a cohesive way.
Set communications/messaging goals with the question in mind, “what do you want people to think about when they think of your organization?”
Is it readable? Too often when we write for ourselves, not an external audience, and load it up with jargon. Reality is, take it to about an 8th grade reading level.
How we tell stories now is less and less through traditional media channels, often now through social media and much more uncensored and unfiltered. It’s not always a source of truth or source of fact.
Honest, authentic communication will always be critical to maintaining stakeholders’ trust.
Planning should always be done with implementation in mind, and implementation should be viewed as a continuation of the process toward the ultimate goal of addressing the issues that prompted change in the first place.
Implementation structures are likely to consist of a variety of formal and informal mechanisms.
To be effective, performance measures must help inform and guide strategy implementation.
Learning is a major theme underlying successful implementation efforts.
Learning and reflection
The ability to learn is a competence, which impacts a person’s ability to grow.
When organizations create or redefine management roles to support reflection or systems thinking, they create learning infrastructures. Create space for learning and invite people into that space.
A team that listens to each other learns each other’s strengths and builds community around their collective strengths.
To really learn and develop, people must be able to share weaknesses as well as strengths and must view information about their present performance as hopeful and nonthreatening.
Absolutely critical not only that you’re self aware, but that you’re open to feedback.
Reflection that isn’t connected to action is what makes people think they don’t have time for this. Having simple protocols like AARs for connecting action and reflection matters, but having a supportive management environment is essential.
Organizational change is notoriously difficult. It is hard to sustain a commitment to change long enough to accomplish it. The fundamental challenge is that it takes long-term resource commitment and organizational discipline to solve recurring problems.
People need to be trained to accept change, there needs to be a shared strategy. Preparing employees for change means fostering buy in.
Technology is only an enabler; communicating requires that people are willing to share information with each other.
Enduring change needs to address the structure, system, and culture of an organization.
Implementing a new culture, organizational structure, or strategic plan requires leaders to engage and empower their staff to take ownership of the process.
Leaders focus on change by setting direction and vision, aligning people to that vision, and motivating people to achieve the vision.
Lessons on leadership
Leaders really need to pursue who they’re about and lead from who they are. It needs to start with yourself. Withhold nothing, become the person you started out to be and enjoy the process of becoming. The point is not to become a leader, point is to become yourself in order to make your vision manifest.
Leadership isn’t about positional equity or authority, it’s about developing people and creating more leaders. Leadership skills are critical for everyone in the company.
Effective leadership is a collective enterprise involving many people playing different leader and follower roles at different times.
A new view of leadership in learning organizations centers on subtler and more important tasks. Three fundamental roles characterize all leaders’ work: designer, teacher, and steward.
If you really want change leadership, both the leader and the follower need to be elevated to a higher moral plane. Everyone needs to feel that they can influence the group. Leaders cannot force motivation. Leaders can mold an environment that allows workers to motivate themselves.
The basic concept of leadership as partnership is two or more people sharing power and joining forces. For partnership to work, ownership, authority, and accountability must be felt at every level, by every person. In authentic partnerships and communities, individuals flourish.
Leaders’ understanding of the external and internal context of their organizations is important for recognizing emergent strategies.
What distinguishes outstanding leaders is the clarity and persuasiveness of their ideas, the depth of their commitment, and the extent of their openness to continually learning more.
Truly effective leaders seem to come to a shared appreciation of the power of holding a vision and concurrently looking deeply and honestly at current reality.
As leaders and managers you praise in public and critique in private, and you never surprise each other when you can avoid it.
Diversity as a learning and effectiveness paradigm
Diversity should be understood as the varied perspectives and approaches to work. Approaching diversity as a learning-and-effectiveness paradigm lets the organization internalize differences. Members of the organization can say, we are all on the same team with our differences—not despite them.
To have an inclusive workplace, nonprofit leaders need to be aware of their assumptions, beliefs, and biases and the ways in which these traits may affect who feels welcome and respected in their organization. Hiring managers need to be trained to recognize their biases.
Diversity and inclusion should be embedded across the organization. Few things are faster at killing a shift to a new way of thinking than feelings of broken trust, Important to set a tone of honest discourse, by acknowledging tensions, and by resolving them sensitively and swiftly.
In order to pursue a mission and mandates, you need to be able to draw upon competencies. Competencies need to draw upon the org’s comparative advantages. Doing so requires employing coherent and effective strategies.
Core competencies - you need some people who know how to run a business, and some who further the mission. There are some inherent conflicts but all perspectives are valuable.
Perhaps the most important strength is a passion for fulfilling the organization’s mission and contributing to the well-being of multiple stakeholders.
High levels of mission valence will tend to attract certain individuals who will self-select into the organization on the basis of the valence of the mission for them, but then their levels of mission motivation will further depend on their perceptions about the linkage of their work to the mission.
The culture and success of an organization is closely linked to its management and the quality of leadership.
“Culture eats strategy for breakfast.” If your culture doesn’t work, your strategy can’t work.
Family friendly policies
Work-life choices are not simply personal, but part of a societal and organizational pattern of power relationships.
Family friendly benefits are important because they reduce the pressure on people, and when they carry less stress into the workplace they’re more productive.
Availability of flexible work hours and other family friendly initiatives predicts retention and reduced turnover.
“No margin, no mission”
Funding and purpose need to go together .. “no margin, no mission”
Nonprofit is a tax status, not a business model.
If you’re spending every dollar on service delivery, you won’t have rainy day funds or money to invest in staff. Nonprofits can and must maintain positive balance sheets, reinvesting surplus funds in the organization.
The public is the rightful owner of any nonprofit organization
The community really is the owner of your nonprofit. In every state, the Attorney General has the power to shut down any nonprofit corporation.
“The lifeblood of a nonprofit is public trust” – if you lose that, funding and credibility goes away.
Need to be mindful of and true to the rubric of the values your nonprofit was founded upon.
It can be hard to do, but funding can’t be the only reason you’re doing something.
Mission trumps anything else you do - do not take money from sources counter to your values.
Accountability is not simply about compliance with laws or industry standards but is, more deeply, connected to organizational purpose and public trust.
Nonprofits are expected to be accountable to multiple actors, including upward to funders and patrons, downward to clients, and internally to themselves and their mission.
Downward accountability mechanisms remain comparatively underdeveloped. More and more often, however, perhaps aided by social media, stakeholders are realizing that they can protest unaccountability.
The complex nature of nonprofit work suggests that attention to more strategic processes of accountability are necessary for lasting social and political change. There is an urgent need for nonprofit leaders to take performance assessment seriously in order to justify activities with substantiated evidence. An overemphasis on measurable outcomes can lead to a push for quick fixes, but every organization should at least measure and report on its activities and outputs, as these results are largely within its control.
Clarity on all three components—operational mission, scale, and scope—is necessary in order to know what to measure.
Mission-centered accountability takes a long-term view of performance measurement by emphasizing iteration and learning. It suggests there are no panaceas, and that social problem solving requires an ability to cope with uncertainty and changing circumstances. Also indicates a critical role for nonprofit boards in internalizing the mission.
A strategy-driven accountability requires building internal capacity in nonprofits for adaptive learning.
As one moves from inputs to impacts, one tends to go further out in time, away from the center of the organization, down in degree of control, down in measurability, up in abstraction, and down in the degree to which one can confidently attribute causation.
Responsible organizations are candid, true to their missions, and act as if outcomes matter.
In some ways, our financial models are a setup for irresponsibility because they often have us paid by one stakeholder to provide service to another.
Nonprofits generally have a greater power advantage relative to the people they serve than for-profit businesses have relative to their customer.
Ethics are guidelines for conduct which addresses morality. Rules that govern the behavior of the person. Many people’s ethics and morals tell them what is the right thing to do, other people believe they have no obligation but to act within the bounds of the law. Lying, for instance, is unethical but usually not illegal.
Why do we care about ethics? It’s tied to decision making, also tied to accountability and maintaining the public trust.
Ethics equip leaders with a habit of mind. What are we approaching, how can I bring my ethics and values to the decision I’m making?
Much of the work of building more effective organizations needs to start, in particular, with the board members.
State policies vary, but generally boards are held to three standards: Duty of obedience, Duty of care, Duty of loyalty
Boards help answer the question, what are we doing and why are we doing it?
Groupthink is unhealthy for organizations. Boards need to have a variety of perspectives and healthy debates. Demographic heterogeneity on a board can facilitate sensitivity to stakeholders and innovativeness. But when you select board members, go beyond their demographic traits - find out about their skills and cultural competencies.
The structure of the board follows the functions needed from it. The structure and members of your board should be aligned with advancing your strategic plan. Look at those goals 2-3 years out and ask if you have people on the board with expertise in the areas that will be important. The priorities and achievements of a board may vary depending on funding sources, program challenges, and other factors.
Boards are likely to be high performing and to make positive contributions to nonprofit organizational effectiveness when they demonstrate six competencies: Contextual, Educational, Interpersonal, Analytical, Political, Strategic
An effective board will establish a culture in which members feel free to express opinions about issues and do not let conflicts turn personal. Candor at board meetings is important, as long as we talk about the issue and not the person.
Individual board members are underplayed. If you’re planning to become an ED, take a facilitation course and conflict management training.
Board members often have to be coached to ask forward looking questions. If a board doesn’t know what their work is, they’ll do management’s job. Once you figure out what the board’s value is, somebody needs to tell them. Telling them their value goes a long way, but it also needs to be genuine.
If boards just sit around in generative mode, nothing will happen. Need to balance three modes to work effectively: Fiduciary, Strategic, Generative
Better governance at a board level starts with board members themselves. They need to approach their work for a nonprofit as a matter not of passive service but of active participation in the direction of that organization.
Challenge of ED role
What makes an organization work well is when the board and CEO know their roles and play them strongly
The ED is an employee of the board and subordinate in some ways, but when crafting strategy for where the organization needs to go they’re partners
Executive directors need to understand, believe in, and clearly communicate their organization’s mission. By linking it to shared values, they can inspire others to work to achieve that mission.
The best nonprofits are able to master seven elements of “strategic leadership”: mission, strategy, impact evaluation, insight and courage, organization and talent, funding, board governance
The most effective nonprofit leaders are those that can look at a situation from multiple frames and act in ways that address the needs highlighted by each view.
Effective leaders manage the creative tension between the current reality and the vision.
Nonprofit leader’s job is to help others dream of what is possible and show them a path.
A nonprofit can develop a high degree of social capital even when its leaders are not individuals that attract followers through the force of their own personalities. Leaders can build strong connections among their nonprofit’s core constituents and create bridges to other groups or individuals outside this core group. Strength of these connections can motivate individuals because of coherence with the organizational mission.
Some strategic thinkers will ask generative questions - intended to generate ideas and discussion. It’s the art of saying, “tell me more about that.”
The concept of reflective listening is listening to hear, as opposed to listening for the purpose of formulating a response.
Engaging in generative thinking involves being aware of the routines that dominate processes like planning and learning and breaking out of them once they become limiting.
In the pursuit of innovation, flashes of insight can come from many sources.
True multidisciplinary collaboration requires people to combine their perspectives and expertise and tailor them to the client’s needs so that the outcome is more than the sum of the participating individuals’ knowledge.
“Quite simply, none of us is as smart as all of us.”
Comparative advantage defines an organization’s capabilities in relation to other providers. Acquiring, integrating, and leveraging resources to build a comparative advantage is central to organizational sustainability.
The success of any organization depends on having the right people, in the right place, doing the right things. Good HR management is about aligning workers to the mission.
Nonprofit marketing, like marketing in for-profits, relies on the marketing mix to accomplish its goals. The marketing mix is composed of the four P’s: Product, Promotion, Price, and Place
Although the discussion is often about these marketing functions, the larger, philosophical significance of marketing for keeping a focus on the nonprofit’s mission should not be overlooked.
Marketing starts with the nonprofit’s mission and strategies and relates the organization to customers, clients, and others that it seeks to provide benefits to or influence.
In many nonprofits there are two separate constituencies: those who subsidize the organization (such as donors) and those who will use or benefit from the nonprofit’s services. The effective result is that there are two target markets, and both markets must be taken into account in marketing plans and program.
In order to be effective, the marketing cycle needs to be embedded in and supported by a planning framework. Marketing planning should be consistent with and build upon the nonprofit’s mission, vision, and overall strategic plan.
In nonprofits, marketing is usually storytelling, case statements, testimonials from customers.
General management guidance suggests that positive reputations take a long time to develop and can be lost much more quickly.
Organizations should have a sense of what stakeholders expect from them and what they value, because this can be an issue if expectations are too high.
Consistency in organizational practices is very critical to reputation management as it simplifies the “message” of what the organization does and how it acts.
Fundraising is important for developing and demonstrating a base of support. Research consistently demonstrates that donors give because of the values they share with recipient organizations. Money is trust in nonprofits. Individuals are entrusting you with resources to do good in the world.
Other top reasons that donors give include the perception that organizations depend on them and knowing someone specifically affected.
When you find individuals who are passionate about your mission, they will be your champions and repeat donors, can have a multiplier effect activating their social circles to support you.
Stepping beyond shared values, today’s donor “expects you to ‘know’ them.” Today’s donors want more control over their giving and to understand the impact they are making.
Technological innovations have expanded the donor-nonprofit relationship by raising nonprofit transparency and providing the means for real-time engagement with stakeholders. “The capability to truly understand your constituent from a ‘360’ view, build lasting relationships and effectively communicate mission impact that is important to them will set many nonprofits apart.”
Strategic use of technology
Competitive advantage stems from how businesses utilize IT and the unique mix of complements around the technology. The real problem with not getting enough value out of technology is the disconnect between systems and strategic direction.
Research suggests that four organizational complements allow process GPTs to deliver improved performance: better-skilled workers, higher levels of teamwork, redesigned processes, and new decision rights
When thinking about enterprise IT, the complements should be in place before rolling out the technology.
It’s critical that executives stop looking at IT projects as technology installations and start looking at them as periods of organizational change that they have a responsibility to manage
Companies that have not been effective in using IT strategically should expect to invest in organizational learning. Organizations that will be successful 10 years from now will be the ones that develop technology proficiency across the organization to meet their mission.
Successful enterprises get the infrastructure balance right because they make regular, systematic, modular and targeted investments in IT infrastructure on the basis of an overall strategic direction.
The IT unit has to be perceived not only as being business focused but also possessing strong innovation and technology skills.
You have a technology strategy driven by business, and a business strategy driven by technology. Needs to be a bit of both.
Investments in shared infrastructure will shape, for better or worse, the opportunities available. If senior management directs transformation investments with that in mind, the company’s overall IT capability is more likely to support its strategic business direction.
“Stabilize, simplify, transform”
How do we get to being strategic users of technology? Some prerequisites as a company: Stabilize, Simplify, Transform
Even though simplification ends up with fewer systems, that’s not the purpose. The purpose is to simplify business processes. Examination of the business process is the starting point.
The challenges are getting people to be comfortable with the change, putting it in perspective, showing them all of the things that the change will free them up to do.
The culture of the company matters a lot in this context of change. Most companies who are successful at this are skilled at communicating to people that change is hard and we will support you through that.
At the heart of transformation is the question, what business problem are you trying to get technology to solve?
Challenge assumptions, ask how new approaches can solve old problems.
If you frame the problem in the right way, with stability and simplicity in place, transformations are possible.
IT enables complex transformations. It’s very powerful at shaping processes, which in turn shapes capabilities.
Transformation has to be business driven, and has to be focused on the customer. That drives the capabilities. Then go one step further and ask what processes develop that capability.
Places that manage to pull off a transformation are places where a leader with vision is able to implement good governance. Transformation efforts fail when change management fails.
Early on in a transformation, you need a very heavy structure to effect the change. As it becomes established, the structure skinnies down.
It’s not a silver bullet. No technology is going to solve your problem. Needs to come after you understand the business problem.
Business needs first approach
An inside-out approach puts the spotlight squarely on the business before evaluating the technology landscape.
Business and IT leaders should meet periodically to discuss the state of the company’s IT-based capabilities.
Technology change management
Happens all the time, what you think of as an IT project is actually a complicated business process project.
IT can’t make a project succeed. Success needs to be driven by change management on the business side.
Three varieties of IT
Three varieties of IT (Functional, Network, Enterprise) have fundamentally different characteristics, and result in different kinds of organizational change.
In stark contrast to FIT and NIT, enterprise IT is hard for companies to adopt. It doesn’t just enable new ways of working; it dictates them. The biggest mistake business leaders make is to underestimate resistance.
IT governance can be assessed by evaluating how well it enables IT to deliver on four objectives: cost-effectiveness, asset utilization, business growth and business flexibility
Governance question around IT is what needs to be company-wide, versus what needs to be department-by-department?
Effective IT governance involves both IT and non-IT stakeholders.
To make IT a proactive—rather than reactive—force in creating business value, companies should establish an operating model, defined as the necessary level of business process integration and standardization needed to optimize operations. By identifying the intended level of business process integration and standardization, the operating model determines priorities for development of digital capabilities and thus IT investment.
The operating model concept requires that management put a stake in the ground and declare which business processes will distinguish a company from its competitor.
Centralized decision making takes away control but increases cost effectiveness and efficiencies. You need to be nuanced in your technology decisions, because when you try to apply a standardized something to a distinctive unit it may cause more harm than good.
When the metrics for a business switch from being driven by growth to being driven by cost, it’s a different regime. Suddenly the things which formerly helped you are now holding you back.
In leading enterprises, each type of strategic agility requires distinct patterns of IT-infrastructure capability. And any company that can determine the type of agility it will need for specific business initiatives is more likely to make sensible infrastructure investments.
If managers can describe their desired strategic agility, they then can identify the IT-infrastructure service clusters that need to be above the industry average - and thus can create a distinctive competence.
Digital disruption is not a new phenomenon. But the opportunities and risks it presents shift over time. Competitive advantage flows to the businesses that see and act on those shifts first.
Digitized solutions strategies and customer engagement strategies address two different types of digital disruption, product development vs. go-to-market.
A great digital strategy adopts a kind of start-up mentality about business success, and addresses a perceived customer need as a starting point.
Adapt the strategy based on market response, seizing additional opportunities that present themselves. Because market response cannot be predicted, your digital strategy must be directional rather than targeting a given end state.
“Data is no longer on it’s own a strategic advantage”
Data by itself is no longer a source of competitive advantage. It is a huge advantage in the context of human capital and business strategies that effectively leverage smart people who manage to work together and collaborate.
Your ability to use a lot of the data hinges on your ability to combine data across the organization. When data is fragmented it’s much harder to combine and make sense of.
Companies should identify groups of micromarkets—or “peer groups” within their broader customer pool—that share certain characteristics.
The most advanced users of analytics typically have a strong data-oriented culture that supports and guides analytics use.
Social media “camps”
To realize the potential of social media for new product development, product developers must engage in three interrelated activities: listen to and learn from user-generated content, engage and facilitate dialogue with customer innovators, find an audience of early adopters to create excitement for new products and collect feedback for their improvement.
The new source of competitive advantage is customer centricity: deeply understanding your customers’ needs and fulfilling them better than anyone else. Figure out a customer’s pain point and find ways to make them feel better about bad experiences.
We maintain our competitive advantage by using our human capital and technology systems to get to know customers better.
Deep data mining and decision-science marketing would be worth little without an absolute focus on customer satisfaction.