23 May

Creating a Clear Line of Sight Through Inputs, Strategy and Execution

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Last week Line of Sight Group delivered a presentation to the local chapter of the Product Development and Management Association (PDMA) entitled, “The Intersection of Strategy and Product Development/Management.” The event was held at Padilla in Minneapolis and attended by 50 product management and strategy practitioners.  Line of Sight Group Founder and President, Steve Schulz, opened with the question, “what do these have in common?” The metaphorical slide had pictures of a dinosaur, a telephone booth and a Blockbuster Video storefront.  All are now extinct, disrupted out of existence by stronger competitors that were better informed and equipped to survive.  Why?

Doug Hedlund, Participating Faculty at the University of St. Thomas Opus School, offered the first part of the answer, a Strategy Formulation and Execution Discipline involving the capture of key factors (an organization’s vision, mission, core values and strategic goals), internal environment factors (strengths and weaknesses) and external environment forces (competition and trends) as inputs.  Next, he walked through how the key factors inform the Strategy (Arenas, Vehicles, Differentiation, Staging and Economic Logic). Finally, he covered the execution levers (leadership, talent, organizational structure, systems/processes, and culture) and scorecard (metrics and dashboards) needed to successfully carry out the strategy.

Next, Schulz presented an interactive case study using the Strategy Formulation and Execution Discipline where the attendees helped to fill in the key inputs that shaped the strategy and execution. Schulz employed three useful frameworks to organize the external and internal data – PESTEL (Political, Economic, Societal, Technological, Environmental, & Legal) Analysis, Porter’s Five Forces Analysis and a Table Stakes Analysis in his presentation of the case.

Finally, Brett Norgaard, Line of Sight Group Principal, bookended the presentation with two stories highlighting the use of timely external environment intelligence leading to successful strategies and product launches under very different circumstances. (See Stealth and Telephone Switch blog entries.)

Starting with external environment research as the first step to creating a clear line of sight, from the inputs to the strategy formation and on through to the execution and measurement, ensures alignment of the strategic and go-to-market functions, including product development/management. Individuals that can identify and understand what is upstream and downstream from strategy formulation will be best positioned to help their organizations prevail and avoid extinction in increasingly disruptive times.

20 Apr

Line of Sight’s Competitive Intelligence System Now SCIP Endorsed

Line of Sight Group is proud to announce that our Market-i Competitive Intelligence System has been recognized as a SCIP “Endorsed” product!

Strategic and Competitive Intelligence Professionals (SCIP) is the nonprofit Association representing the Integrated Intelligence industry internationally for over 32 years.

What makes our system unique? Prior to launching Line of Sight Group in 2002, president and founder Steve Schulz conceived the Market-i System when he was running CI programs.  According to SCIP, this makes the Market-i system unique and different because it was developed by a CI practitioner, not by a consultant or technology specialist with no background in CI.

The idea behind Line of Sight’s intelligence services offering, including our Market-i System, is that the most effective way for organizations to understand, respond to and anticipate changes in their external environment (not only direct competitors) is to collect and process information that best represents leading indicators in a systematic and ongoing way. It is done in such a way as to identify changes that are significant enough to deserve a more in-depth look. In addition, our intelligence services fit directly with our analysis services – we get to know our clients and their business and are uniquely positioned to help our clients develop deep insight and strategic options.

Line of Sight Group joins other service providers highlighted in SCIP’s (first-ever) 2017 Service Provider Assessment Guidebook – Highlighting SCIP Endorsed and Certified Services in ISCI. The guidebook is aimed at providing its members and potential users of these services some insight into the features and benefits that may be of service to their decision support program.

If you would like more information about our Market-i Competitive Intelligence System, please Reach Out!  To learn more about SCIP or to become a member, contact them at www.scip.org.

06 Mar

Bob and Jerry on Competing in Healthcare

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For the past several weeks, we have been busily reading the myriad articles and forecasts on Healthcare (HC) trends for 2017. There was even an article about all of the other articles.  With trends like a dramatically changing regulatory environment, continued momentum in HC consumerism, advances moving big data and analytics into cognitive computing and Artificial Intelligence, value management, medical device and pharma innovation, mobility, cloud, security, privacy and so on, 2017 promises to be an exciting and challenging year. Not only are things moving fast, but there are a lot of them and the very foundations of the industry are shifting at the same time. If you are feeling a bit overwhelmed and seeking enlightenment, we offer the timeless wisdom of Bob Dylan and Jerry Garcia to make some sense out of the state of HC.

“For the times, they are a changin’” pretty well sums up the status quo. Thank you, Bob. For organizations competing in the HC space, it is particularly important to examine the increasingly complex and multi-layered external environment and to ensure that strategic plans are up-to-date, refreshed and aligned with the go-to-market initiatives. Leaders may also find themselves in the circumstance of playing offense and defense simultaneously.  Some built-in flexibility goes a long way when there are well funded start-ups seeking to innovate by employing new, simplified business models and established organizations seeking to do some disrupting of their own. No matter where the threats come from or where the opportunities may lie, it has never been more important to listen to what is happening in the market, connect the dots and then convert this into insight that can be acted upon. There are a lot of factors to consider.  Jerry rightly observes, If the thunder don’t get ya then the lightning will.

While most organizations conduct annual planning and align their go-to-market activities to the current conditions, it may not be enough. When in particularly challenging times, we might feel the need to regroup a bit and as Bob points out, “Come in, she said, I’ll give you shelter from the storm.”  Leading organizations monitor their external environments continuously in order to anticipate market changes and make appropriate course changes. There are many methods to accomplish this that involve primary and secondary research, analysis and the pulling of various execution levers.

2017 presents potentially turbulent conditions. With a good and continuous view of the external environment, a sound and flexible strategic plan in place and solid execution, you will be able to navigate and compete successfully in the HC market. As Jerry sang, “May the four winds blow you safely home.”  Good luck in 2017!

22 Nov

How do election results change my company’s strategic, business, and product plan assumptions?

Were your strategic, business, and product plan assumptions based on one candidate winning or did you have scenarios for either outcome?  Did you have a scenario in which one party would control the Presidency, House of Representatives and the Senate?  How dependent were your strategy decisions on U.S. trade policy, corporate and individual tax policy, the Affordable Care Act, immigration policy, the strength of the dollar, student debt forgiveness, a national minimum wage, environmental regulation, etc.?  Will policy and regulatory changes under single party control make your industry more attractive or less?  How will your competitors react to these changes?  Will political, regulatory, supplier, customer, investor, and competitor reactions be positive, disruptive or destructive to your industry and business?

If the questions above left you scratching your head it’s time to pull the strategic, business, and product level plans out and review the assumptions on which your forecasts and decisions were made.  Depending on your industry, you may need to simply update or completely redo your external analysis to determine the political, economic, consumer, environmental and regulatory implications for your industry and business.  Next, identifying what actions your competitors may take in this updated external analysis and monitoring for leading indicators that may signal competitor actions will position your company to be pro-active vs. reactive.

 

Doug Hedlund
President, The Hedlund Group, LLC
doughedlund@hedlundgroupllc.com

Doug provides Line of Sight Group clients corporate, business unit, and product level strategy development and execution facilitation and guidance. Doug’s disciplined approach to strategy development and execution helps our clients translate our industry research and competitive intelligence into focused, actionable strategies and execution plans. Doug has evolved the disciplines and tools he utilizes over a twenty-seven year career in corporate development and strategy leadership roles at Deluxe Corporation, CUNA Mutual Group, and Mayo Clinic. In addition, Doug has taught the Strategic Management Capstone course in the MBA programs at the University of St. Thomas and Augsburg College since 2008 and 2009, respectively and has helped numerous organizations formulate successful strategy and strategy execution plans.

10 Nov

OUR STRATEGY ISN’T WORKING

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Our strategy doesn’t seem to be working.  What’s wrong?  When company and business unit leaders or product and market managers share this question with me I answer with the following question:  Is it your strategy, strategy execution or both?  In most cases, they don’t know, so I take them down a path of a few more questions that include:

First, are your strategy decisions aligned and compatible with your company’s vision, mission and core values?  If not, execution can be very difficult because your company’s mission and core values are foundational elements of your company’s culture.  If not aligned and compatible, Peter Drucker’s statement “culture eats strategy for breakfast” can cause a strategy which looked great on paper to fail.

Second, are your strategy decisions based on a comprehensive identification and assessment of your companies opportunities, threats, strengths and weaknesses?  Successful strategies exploit company’s opportunities and strengths and mitigate company’s threats and weaknesses.  The absence of comprehensive industry, market and competitive research lead to strategies that can fail miserably.  Absent outside objective research and analysis companies tend to overstate their strengths and underestimate their weaknesses.  When viewed through internal lenses strengths may look like competitive advantages when in reality they are simply table stakes and offer no competitive advantage in the marketplace.

Third, are the required execution levers in place for your strategy to be successful?  The execution lever checklist begins with the right leadership, people, organization structure, systems and processes, and culture.  Keep in mind that current execution levers don’t necessarily work with strategy decisions that include new products, markets, channels, geographies, strategic partnerships and/or acquisitions.

Finally, superior strategy and strategy execution requires focus, discipline and alignment.

 

Doug Hedlund
President, The Hedlund Group, LLC

Doug provides Line of Sight Group clients corporate, business unit, and product level strategy development and execution facilitation and guidance. Doug’s disciplined approach to strategy development and execution helps our clients translate our industry research and competitive intelligence into focused, actionable strategies and execution plans. Doug has evolved the disciplines and tools he utilizes over a twenty-seven year career in corporate development and strategy leadership roles at Deluxe Corporation, CUNA Mutual Group, and Mayo Clinic. In addition, Doug has taught the Strategic Management Capstone course in the MBA programs at the University of St. Thomas and Augsburg College since 2008 and 2009, respectively and has helped numerous organizations formulate successful strategy and strategy execution plans.

05 Oct

External vs. Internal: The Difference between Strategy and Planning

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As we enter the first days of October here in Minnesota, the leaves are turning, football is back and our clients are diving deep into their strategic planning for 2017.
When the concept of strategic planning arrived in the business world in the mid-1960’s, corporate leaders embraced it as “the one best way’ to devise and implement strategies, according to Henry Mintzberg, the internationally renowned academic and author of ‘The Rise and Fall of Strategic Planning’. By the mid 1990’s amidst the dot.com bust, however, strategic planning had fallen from its pedestal and planning departments were being dismantled.

“Strategic planning is not strategic thinking. One is analysis and the other is synthesis.”
– Henry Mintzberg

Mintzberg explained that strategic planning had become, “strategic programming, the articulation and elaboration of strategies, or visions, that already exist.” On the other hand, he wrote that strategic thinking is about capturing what managers learn from all sources (including both ‘soft’ insights from experiences and observations as well as ‘hard’ data from market research) and then synthesizing it into a vision of the direction that the business should pursue.

In his 2014 HBR article ‘The Big Lie of Strategic Planning’ University of Toronto Professor Roger Martin laments that “strategic plans all tend to look pretty much the same.” They have three major parts: a vision or mission statement, a list of initiatives, and a conversion of the initiatives into budgets. While they may produce better budgets, they are not about strategy.

Strategic Planning Strategy
Internally focused: planning, costs, capabilities Externally focused: customers and competition
Short-term Future-oriented
Controllable Uncontrollable in long-term
Comfortable Uncomfortable
Accurate, predictive Imperfect, directional
Risk elimination Risk management
Objectives, steps, timelines Placing bets

Strategy is about what we choose to do as an organization (and not to do) and why. It is about where to place ‘bets’. Strategy focuses on the revenue side, where customers make decisions about whether to give their money to us, to our competitors or to a substitute. This is the hard work of acquiring and keeping customers. It is uncomfortable because our customers are making the decisions, not our own organization.

How to escape the comfort zone: embrace the angst

Because the problem is rooted in our natural aversion to discomfort and fear, Martin writes, “the only remedy is to adopt a discipline about strategy making that reconciles you to experiencing some angst.”

How can we stay focused on strategy this planning season and not fall into the trap of planning and cost budgeting? Some tips:

    Focus on choices that influence revenue (i.e.: customer decision makers). This boils down to just two basic choices: 1) where-to-play (which buyers to target) and 2) how-to-win (how to create a compelling value proposition for those customers). Customers will decide whether or not our value proposition is valuable and superior to competitors’, and whether or not to reward us with revenue.
    Acknowledge that strategy is not perfect. Managers and boards need to shift their thinking to focus on the risks involved in the strategic choices (i.e.: placing bets) rather than insisting on proof that a strategy will succeed.
    Explicitly document the logic. The assumptions about customers, industry, competition, internal capabilities, and others that drove the decisions should be documented and then later compared to real events. This helps to quickly explain why a particular strategy is not producing the desired outcome.
    Invest in data-driven decision making. Placing bets inherently involves risks. Because strategy is not perfect and risk cannot be eliminated, the objective is to increase the odds of success by understanding and managing risks. This is where knowledge and insight into customer needs and competitive offerings and dynamics provides tangible value.

Alignment

Of course, successful strategic planning occurs when both strategy and planning are aligned. The strategic “sweet spot” is the value proposition that meets customers’ needs in a way that rivals can’t. It must include both the external view of customers and competitors and the internal view of our own capabilities.

When the core elements of strategy are aligned (customers – competition – capabilities – mission/vision), and when decisions are driven by solid external knowledge, organizations can confidently place its strategic bets in a way that both grows revenue and delivers it in a way that is profitable for the company.

22 Jul

Disruptive Forces in Financial Services

Competition in Financial Services has always been intense amongst industry rivals. Increasingly, firms find themselves competing with Financial Technology (FinTech) start-ups going after a selective slice of the market with a disruptive offer.  Many FinTech firms have billion dollar valuations, are flush with cash, and are leveraging low cost, cloud-based delivery models. While incumbent firms have invested heavily over the years in a combination of technology-based infrastructures like ATM networks, branch office makeovers, online services and mobile apps, they still feel vulnerable to the threat of FinTech firms grabbing market share in specific areas like retail payments or online lending.

When clients share these kinds of challenges with Line of Sight Group, our first inclination is to turn our eyes and ears to the external environment and to connect the dots around what is happening, as well as what is likely to happen.  Thus informed, threats and opportunities emerge and become discussion points for the formation of strategic plans and subsequent go-to-market initiatives.  Financial Services firms have a vast array of levers to pull when it comes to competing successfully.  Technology is but one of these levers. Some firms find that their physical locations can be leveraged if they reconfigure them into optimized networks based on the specific needs of their clients.  In some cases, they may opt for a smaller branch footprint but implement Interactive Teller Machines that match a specific financial expert with a client virtually. Other Financial Services firms are partnering with FinTech firms by bringing new offers into these networks and blending them into a portfolio of offers.  Another tactic is to conduct hundreds of controlled tests annually (AB Testing) designed to gauge and measure consumer preferences and to then create new offers based on the results.

Line of Sight Group Financial Services clients utilize a number of methods to listen to the external environment in which they play. Some firms utilize strategic competitive monitoring on an ongoing basis to gather, sort and analyze value propositions, pricing and customer satisfaction levels. Financial Services clients who position large commercial offers utilize Win/Loss Analysis to understand why they win and lose deals. Firms seeking to enter a new market employ a Competitive Landscape Analysis to gauge the status quo and to look for unmet needs before making the move to invest.

By understanding the external environment on a continual basis, Financial Services firms can better navigate the ever changing mix of consumer preferences, technological advances and business model iterations to make good decisions. Technology is important, but rarely the only factor to consider.

12 Jul

Top Five Digital Health Trends for 2016: Disruption Can be a Game Changer if a Business Can Predict it

According to Accenture’s report, Top Five Digital Health Trends for 2016, “Disruption can be a game changer if a business can predict it.”  Here are the trends they identify and break down:
  • Intelligent Automation – big data, digital apps and devices handle the basics allowing people resources to focus on higher value tasks
  • Liquid Workforce – technology has enabled anywhere, anytime access to healthcare. Crowd sourcing and workforce flexibility are leading to better outcomes
  • Platform Economy – technology-enabled networks and the ability for consumers, providers, payers, and employers to all access them yield better outcomes at scale
  • Predictable Disruption – once the ecosystem is established, it becomes more powerful with the addition of new, innovative offers. Many are coming from outside of health care such as gaming and consumer-based technologies
  • Digital Trust – as ecosystems grow larger, vulnerabilities increase.  Yet, consumer demand for security and privacy remain high

Predicting disruption across digital health encompasses a dizzying array of forces at play – technology, economic business model, consumer engagement, regulatory, and more.  A thorough understanding of the competitive landscape where you play is a great first step to take if your market is rapidly changing.

This link will take you to a Sample Report for Line of Sight Group’s Competitive Landscape Program, making sense of disruptive and chaotic forces for our clients: Competitive Landscape Sample Report.
07 Jul

The Challenge of Being Different

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In a past life, I held the position of a product manager for a company that was the leader in a substantial and mature industry. As a product manager, I learned many things:

  • First I learned that the product manager role in any organization is extremely hard work and not for the faint of heart. I mean, who would even want the job of being in the middle of demanding customers, unruly salespeople, tentative engineers, anxious operations managers, out of touch managers and cautious finance and accounting folks? Sounds like a perfect job for a middle child, which I am not. In addition, even though we had good market research, I always felt like I was running in circles, responding to the largest customer or market anecdotes without a good sense of the real market needs
  • Second, I learned that responding to those counter pressures was the safest way to operate. While it was considered ‘customer focused’, in the end, our efforts often resulted in product features and pricing models that looked pretty much like everything else in the market, even though internally we felt we had invented something unique
  • Last, I learned that working to make my product line truly ‘different’ in the market required skill, courage, leadership, and even a little luck.

In her book ‘Different: Escaping the Competitive Herd’ Harvard Business Professor Youngme Moon describes the concept of ‘category blur’. Her argument is that once a product category becomes a blur to customers, they start to adopt a consumption posture directed toward the category as a whole, as opposed to the individual brands within it. Professor Moon says, “We [buyers] no longer see the trees for the forest so we cop a stance toward the forest instead.” On the other hand, what she terms ‘breakaway’ products and brands deviate from these stereotypes in such a way as to cast doubt on the validity of the original generalizations.

The concept of ‘different’ implies the ability to compare and contrast one against another – for both customers and product managers. In order to deliver products that are truly different product managers must start with knowledge of his or her own product, production and pricing capabilities, etc. (the internal environment). At the same time they must have deep knowledge of the competitor’s products and capabilities along with buyer needs, perceptions and behavior (the external environment). In addition, since the external environment is constantly changing as customer needs change, competitors change, and technology and other trends drive change, the awareness of differences must be continuous. (Refer to the difficult role of the product manager above).

When we started working with one of our very good clients several years ago, the senior executive told me, “We have launched so many new products and product improvements over the years that have failed.” He added, “They not only cost money but hurt our reputation with customers, and we know that solid investment on the front-end is critical.”

It is the external environment where Line of Sight Group helps our clients. Our approach is to help product management professionals improve their effectiveness by collaborating with them to ‘out-smart’ their competition by identifying the disruption that represents opportunities and threats before their competitors do. We help them benchmark the competition, watch their ever-changing external environment and help them connect the dots. They apply the insight to close gaps to reduce risk and Identify ‘white space’ opportunities to make their products truly ‘different’.

As noted above, sometimes being ‘different’ requires a little luck beyond the leadership and hard work of a product manager. Sometimes that luck comes in the form of additional knowledge and insight – and it can mean all the difference.

16 Jun

Connecting the Dots at DEVICETALKS

Last week, Line of Sight Group attended DEVICETALKS 2016 hosted by MassDevice. The one day event was held on Monday June 6th at the Science Museum of Minnesota and attended by 250 people.  There were keynote panels from medical device leaders and break-out sessions focused on industry trends and product management topics. The main point of discussion was the shift in the industry towards Value Management and favorable outcomes across clinical and economic dimensions.  There was considerable discussion around the ramifications for stakeholders – patients, doctors, payers and providers – and what this would mean for medical device makers.  For them, it was clear that the current model of focusing on FDA approval followed closely by how to get reimbursed would be changing swiftly in favor of valued-based methods for delivery and reimbursement.  Much of this change is driven by multiple factors including cost, quality and regulatory pressures.

There were speakers from medical device leaders, cloud based providers, innovation leaders, product management leaders, media, association and attorneys.  The product management break-outs discussed the medical device industry entering a new phase of software-defined value leveraging new levels of automation, big data, analytics, globalization and higher levels of engagement by stakeholders across the board. One of the goals likely to be enabled by the aforementioned is Personalized Medicine that will lead to more customization, just-in-time/low/no inventory, and predictive therapies.  When it comes to big data, several of the medical device makers said that they would need to partner with several players like Google, Apple, IBM and HP concurrently.

In listening to the speakers and talking to attendees, a number of items stood out.  The medical device industry continues to consolidate. The big examples were Medtronic/Covidien and Abbott Laboratories/St. Jude. With the smaller, emerging section of the market, there is a notion that once they achieve a certain run rate of $10M-$30M, they will be acquired. This is a complex industry with plenty of chaos and disruption, a lot of moving parts including shifting economics, high levels of innovation and regulatory pressures.

Events like this allow Line of Sight Group to listen to the market, observe, interact, engage and make connections. One of the key aspects that our Integrated Strategic Analysis requires is the ability to connect the dots when researching clients’ external environments to help them focus their strategic and go-to-market initiatives so they can protect and grow their businesses.