Strategy vs. Tactics

On January 10, 2012 by Jennifer Matt

I don’t know of one print business today who isn’t thinking they urgently need to evolve, transition (insert your favorite synonyms for “change”). I believe there are two types of change, one produces incremental change, and the other produces real change. My favorite “what not to do example” is what larger companies frequently call “re-organization.” […]

I don’t know of one print business today who isn’t thinking they urgently need to evolve, transition (insert your favorite synonyms for “change”).

I believe there are two types of change, one produces incremental change, and the other produces real change.

My favorite “what not to do example” is what larger companies frequently call “re-organization.” Let me recap, company/business not performing, lets shuffle the people around, give them new titles, new bosses, maybe move their offices, heck lets be really radical and put them under a different division!

OK now that all the changes are complete – go out and conquer (by the way you’re selling the same product, the same way, with essentially the same team of people and nobody spoke to a customer about their opinion of anything!) Again and again and again – doing the same thing over and over expecting different results (the best definition of insanity out there), if you’ve ever worked in a big company, this has to sound familiar.

Real change is hard. Real change is risky. Real change requires strategic thinking rather than tactical thinking. The problem is most of us are very comfortable with tactics and very uncomfortable with strategy. Tactics produce incremental change, low risk change, paint the product a darker blue kind of change. I guess the risk is what everyone is avoiding because presumably nobody gets fired for incremental change right? Wrong. Everybody gets fired when incremental change goes on too long and the market makes the final decision to fire the entire product/business. We all can name more than a few printers who have gone out of business in the last couple years.

The aspect of all this that frustrates me the most – people are working their butts off on incremental change that isn’t producing the results! The worst of all possible scenarios, people are actually getting burnt out producing very little value! I like to work hard, sometimes too hard. But working hard at something that produces little value is supremely painful to our souls and therefore takes a larger chunk out of employee morale.

Think about the last time you painstakingly created a comprehensive analysis for a decision that shouldn’t even be on the drawing board (for example) but everyone is too risk averse to speak up. I understand, we have jobs to protect, mortgages to pay, college funds to save for, etc… I’m not advocating for mutiny (although mutiny isn’t always a bad thing), but I am noticing two alarming trends:

  1. Incremental change just aint good enough anymore
  2. The level of risk averse behavior is on the rise

Just when we need real change, strategic thinking, and risk takers our collective behavior pattern is sinking into what I like to call “active paralyzation” – yes, lots of activity but no real change.

If you want to do something new like:

  1. Expand your product set beyond print (human translated version of Marketing Service Provider)
  2. Expand into another kind of print manufacturing (e.g. digital, grand format, flexo, etc…)
  3. Attack a specific vertical (e.g. retail signage, financial/compliance, transactional, etc…)
  4. Transition your business to be primarily online

You need to start with strategic thinking because these are NOT tactical moves. This is not incremental change; this is real change that requires answering the hard questions from the perspective of your ultimate boss – THE CUSTOMER. Don’t start with the minutia of how this will change your workflow – that’s incremental details that can be worked out later IF during your STRATEGIC thinking process you answer the tough questions like “WHY?” way before you start attacking the “HOW?”

What do I mean by strategic thinking vs. tactical thinking? I believe it’s the act of staying on the BIG and UNCOMFORTABLE questions (WHY?) rather than succumbing to the pull of diving into the weeds of tactics (HOW?). I’ve been in hundreds of conversations where we start with an executive leader stating something like “we want to expand our business into product area X, and make it XX% of our revenue by X date.” This sounds exactly like what I was taught while getting my MBA – the next step would be to create a complex and all inclusive proforma on how this will play out over the next three years (total guess). Please don’t waste your time.

I think strategic thinking has to be outcome based – so yes the first step is to consider what you’re trying to create but you can’t limit it to results from your perspective. Revenues, market share, profitability – those are metrics we monitor for existing businesses, don’t make the mistake of trying to utilize them to create new businesses. The strategic thinking has to be from the perspective of your customers which might be both direct customers and channel partners. Strategic thinking starts with honestly asking yourself why customers would buy from you! At this point, the executive spreadsheet heads in the room start rolling their eyes and thinking “when are we going to get to the real business discussion?” I love this. I love when leaders disguise their unease with discussing the reality of their business in terms of it being fluffy and not serious enough (translate, cannot be tracked in a spreadsheet).

What if your answer to the question, “why would customers buy from us?” is actually hard to answer? What if when you ask that question, the only thing that comes to mind is all the things that prevent customers from wanting to buy from you? You might have just stumbled on some strategic initiatives that would help you grow your business ;-) Or you could go back to Excel and create another proforma based on wild ass guesses on what might happen ;-)

 

 

 

 

 

18 Responses to “Strategy vs. Tactics”

  1. Excellent article about the challenge of change. Thank you.

    An additional point is that real change takes deep motivation. If things are going along OK few are willing to undergo the pain of doing more than changing how the table is set. If you are faced with a competitive setback or a serious challenge to your business, this often provides the fuel that can drive the effort and commitment required to design and implement a new strategic direction.

    A starting place for change is to look inside at the urgency and need for it. Think of Butch Cassidy and the Sundance Kid suddenly standing on the precepice with the posse fast closing in on them, the urgency for change was clear.

    • Jennifer Matt says:

      David,

      Great point – our human nature tends to stay put until we are presented a compelling reason to change. The challenge is that sometimes the compelling reason appears and you’ve run out of time to instigate the level of change required to meet the challenge. There are new examples everyday of companies who missed major market changes and were unable to adjust in time (Blockbuster, Kodak Film Business, etc…)

      I like your idea of looking inside the company for the urgency and then motivating people based on that urgency. You sure have more options when you have some room (time and money) to invest in the change.

      Jen

  2. Ken Stewart says:

    Jennifer, I enjoyed reading this because I found myself disagreeing and agreeing with you at a couple of points. While I adamantly disagree with how you have created such a division between strategy and tactics, you wound up framing this in such a way as to hit upon one of the most important ways to not just stay strategic but stay focused on the prize – ask “Why?”

    However, I would content the “How?” and even “What?” are equally critical in this attention starved world we live in. More to your point though, I have found that it is the original “Why?” which has been perverted or even left for dead as so many of us cling to what worked in our past in the hope that we can still wring sustenance from the that withered fruit.

    Overall, well said. Keep challenging us all like this.

    Regards,
    Ken Stewart

    • Jennifer Matt says:

      Ken,

      I frequently find myself re-reading my work and agreeing/disagreeing on parts so we’re on the same page. I think Why? is really important, highly influenced by this TED Talk by Simon Sinek. I also read his book Start with Why?

      Here’s where I stand on the why? what? how? debate. If a project/activity/investment doesn’t pass the why? (compelling reason that has clearly defined desired outcomes) then there is no reason to go forward with the what? and the how? My point is that way too much activity takes place without stepping back to understand and communicate the desired outcomes. Therefore, we invest precious dollars and labor into the what? and how? and then wonder how we ended up missing the results.

      Jen

  3. Erik Nikkanen says:

    Jennifer, again you have proven that your thinking is sharp and on target.

    The only problem is that you are in the wrong industry. You might love to be in this industry but I suspect that you are wasting your valuable knowledge and wisdom on those that will not really appreciate it. (maybe not strategic)

    Of course, I might be wrong and maybe lots of people get a lot out of what you say. I hope so.

    I have to say that I have never read articles by others in this industry who provide the kind of perspective that you do. It is like reading the Harvard Business Review or Drucker instead of the usual Printing Business for Dummies type of simple material presented.

    Keep up the good work. It is always good to read good business wisdom.

    • Jennifer Matt says:

      Thank you for your kind words Erik.

      I love web technology and I know the print industry from so many angles (direct operator, pre-press, marketing, retail, sales, software, etc…).

      Now that I’m in business for myself I get to choose the problems I solve. So much of this industry needs help transitioning their business online and in my experience its easier on them to work with someone who really understands their business.

      Jen

  4. Chuck says:

    Very good piece, thank you Jennifer! And really good thoughts in the comments. Terrific point Erik. I, too, question whether Jenni is wasting her time in this industry. But she is young, so she may have a chance to escape.

    Can the next post be about the execution? Once you’ve established Why? you do need to address How? or even When?

    Let’s talk about a big company that reorganized in the last few days. A well articulated strategy, and some weirdly poor execution. “We want to dominate the consumer inkjet business by decimating our competitors profits”. Not a bad strategy, but they don’t seem to have executed. “Film is dying, so we need to transition to digital photography”. Where is the Digital Motion Picture Camera that they needed, or why were they a decade late to the point and shoot market?

    And yet, there are a lot of really good reasons, “Why?”s, to buy from them– tons of intellectual property, a lot of really good people, good products, good price points… what happened? Furthermore, even in the current weakened state there are great reasons to buy from this company, but execution over the next few months is more likely to determine their fate than another strategy initiative.

    • Jennifer Matt says:

      Chuck,

      You’re right, execution is critical as well.

      I find when companies are fabulously successful (e.g. Apple) or experience a major setback (e.g. Kodak) its so easy for us to assess the situation from the outside and with the benefit of 20/20 hindsight. It all seems very clear what was done right and what was done wrong. After I get over my ego trip of thinking I’m so smart – I realize I know nothing about what really went on inside those companies and I can’t be assured I wouldn’t have made the same mistakes.

      Our ability to think clearly is drastically impacted by our natural instinct to protect existing revenue streams. Almost all the examples of large business failures can be categorized by playing too much defense (of existing revenue streams) and not enough offense (cannibalizing your existing business to grow new business). Apple did that brilliantly, Blockbuster didn’t do it all. Kodak had a gigantic film business, digital photography obviously cannibalized that business but it wasn’t Kodak doing the cannibalization – it was others.

      What a crazy world we live in!

  5. Jim Daly says:

    Jennifer,

    I have coined the phrase “Desperately seeking average” to describe the behavior of most large companies and unfortunately, many printers. The crux being that if you duplicate what others have done successfully (as proven in a spreadsheet model) and you execute efficiently, you have a near 100% chance of never making a mistake. If you want to see a printer’s face turn ashen simply say “greenfield” or “if we build it they will come”.

    Further, the idea of dealing with the intangibles (it seems that I too am often accused of talking in “gushy” terms) of customer expectations and market opportunities is rather foreign.

    Let’s face it the consolidator play is always based on getting more efficiency via procurement and shared services, NOT on huge market ideas such as Vista Print realizing the incredible untapped opportunity available from 11 million small businesses who had an acceptable market price (value) in their heads, not a cost-plus of current manufacturing technology mentality. By focusing on serving a need and inventing (adapting) technology they’re enjoying continuous growth and profitability.

    The interesting thing to me is that with all of the change occurring in media channels, customer behaviors and even cost of production models, that folks continue to bury their heads in the sand rather than avail themselves of the tremendous opportunities they have to better serve their existing customers with improved solutions.

    To me, the risk cost of lying in the fox hole waiting for the battle to end is quickly getting dramatically higher than the risk of jumping out and taking on the fight.

    Jim

    • Jennifer Matt says:

      Jim – thanks for the fox hold analogy, a very good one. Duck and cover or run out and charge?

      Jen

  6. Jennifer,
    Your points on strategic thinking vs. tactical action are well applied to the dilemma the print industry has faced are well taken, even if some 10 years past due. If a company can’t add value in a transaction (services or goods) then there is only commoditization left. This is where print resides in today’s market place; and printers sat there and let it happen. Like the music business, like Kodak, there was a refusal to respond to the changes that were inevitable.
    An engineer from Kodak who worked on the digital camera in the 1980’s said (in a post mortem article) they never really considered it a product, but rather another form of technology that would drive more print consumables. Why the lack of vision? Because they did not want to disrupt the business they had that was so lucrative. Print suffers from the same mentality.
    Customers aren’t always the best source for asking what is needed. To add value, the seller needs to bring new solutions for the customer to achieve their goals. So that means knowing at least as much about their business and their goals as they do. The printer needs to be the subject matter expert that provides means to an end. Indeed, calling yourself a printer is probably self- defeating; being a solution provider, if nothing else, is more interesting. This is why consultative selling is crucial; and a knowledge-base is the value proposition. I mean, what a does a ‘printer’ say that speaks value: “I put ink right on the paper!” “I deliver it on time!”, “I buy you lunch!” Yet many printers, and their sales staff, still work this way.
    If your customer produces widgets, you should know all about the challenges facing the widget market. Asking the customer is but one task, learning the ins and outs of that market is why a customer will want to work with you as you can bring value to their operation, while they concentrate on their core competency. Only a handful of printers have made this a goal. An elite few that I know of, fully anticipate the day that output is rarely a printed piece. The process of feeding a range of media with the content they touch will be their value-add role.
    Imagine a printer with no presses. Imagine Kodak. Imagine buggy whips.

    • Jennifer Matt says:

      Robert – thanks for extending my thoughts so eloquently. I think the pace of change is amazing now, industries (film, record albums, etc.) seem to be disappearing overnight and then we all look back and go “why didn’t they see it, it was so obvious”. You’re dead on, when you have a heavy revenue stream – you get blinded by defense. Don’t disrupt the flow at the expense of innovation or seeing the “obvious”

      jen

  7. You wrote: “My favorite “what not to do example” is what larger companies frequently call “re-organization.” Let me recap, company/business not performing, lets shuffle the people around, give them new titles, new bosses, maybe move their offices, heck lets be really radical and put them under a different division!”

    That is exactly what a struggling Kodak has just done. Hmmmmmm :-)

    Good stuff!

    • Jennifer Matt says:

      Gordon – its a natural human reaction to crisis. Lets change what we have control of because not changing would be “what”?

      I have an interesting quote from a book I just finished, Great by Choice, by Jim Collins. “Far more difficult than implementing change is figuring out what works, understanding why it works, grasping when to change, and knowing when not to.” Southwest Airlines had a 10 point operating plan that didn’t change for 30 years!

  8. Scott Cappel says:

    Real change is hard.

    • Jennifer Matt says:

      Scott,

      I have an interesting quote from a book I just finished, Great by Choice, by Jim Collins. “Far more difficult than implementing change is figuring out what works, understanding why it works, grasping when to change, and knowing when not to.” Southwest Airlines had a 10 point operating plan that didn’t change for 30 years!

      Jen

  9. Dave Erwin says:

    There is a great book on this very subject. Simon Sinek’s “Start With Why – How Great Leaders Inspire Everyone to Take Action.” Simon has also been featured at Ted Conference (TED.com.

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