Emergent Strategy

Get Your Customers To Choose You (Again And Again)

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If you’ve spent any time trying to work out your business’s strategy you’ve probably come across a few resources. Probably more than a few, the internet is littered with all kinds of business building nonsense. Thank your lucky holiday stars you ended up here because there’s no quality standard on what someone can call “business strategy” these days. So before you download someone’s (who maybe isn’t super qualified to offer anyone any advice because they’ve never done anything ever when it comes to growing a business) free 87 page growth strategy guide, carve out a few minutes to make your way through this post.

Ohh, I’m feeling a kind of way already. I like it.

When it comes to moving the levers in your business there are the old favorites like the SWOT analysis, that no one really knows what to do with after you fill it out, and then there are frameworks like Porter’s 5 Forces Model. These frameworks are designed to help you organize your thoughts around what’s happening in your business and helping to illustrate why people should care. Something like Porter’s model is an amazing tool but it should be one piece of how you are evaluating what your business' strategy and subsequent hunt for competitive advantage will look like. Oh, and we can’t forget the most important business building faux pas, these tools aren’t going to tell you what you need to do next in your business...most of the time.

One resource that I really like and I’m guessing you haven’t seen is Mintzberg's Emergent Strategy framework. If you are a recent MBA graduate or have taken one of Mintzberg’s courses you will of course be one of the select few who have had the opportunity to dive into one of my favorite approaches. And if that description isn’t you like 99% of the world's population, you are in for a treat!

Mintzberg is responsible for Emergent Strategy. He’s the guy that made it cool to think about business decisions from a human perspective. He coined this way to think about business that weighed getting to the heart of why people make the decisions they do over time. I made reference to him and Emergent Strategy way back in the day, somewhere in the middle of 2016 and I wanted to break it down a bit more with this post. Took a few years but we’re full circle.

Emergent Strategy approaches strategy from a very human point perspective.

I love it because makes one really simple thing the contextual heart of deciding what to do next in your business. At the end of the day businesses succeed because people are choosing to engage with them. Sounds almost too simple but let’s break it down. Consumer’s choose how to spend their money for lots of reasons. Sometimes it’s price driven and sometimes it’s not. It can be about values, mission, and the intentions guiding how your consumer makes their decisions over time.

Did you solve their problem and are they coming back every time they needed that problem solved again. If you’re a restaurant, for example, are they coming back week after week to try something new on your menu? This way of thinking frames the choices your consumers make in terms of the outcomes desired/achieved. Notice I said outcomes and not goals because you need to think about your business in terms of the resources you have available to allocate to try to create an environment for success. As a business owner you should be all about doing the best thing you can and about making it easy for people to get that value from you - the latter is an outcome.

Figuring out what makes people tick fills lifetimes of work for the professionals in the fields of behavioral economics, psychology, strategy, etc. You don’t have that kind of time in your business. Let’s see if we can fast track your development of a systematic approach to making choices and getting human-people to identify the important choices to make when it comes to buying from you. Here are 5 things you can do now that will get you thinking like an Emergent Strategist:

1. Strategic Planning - Planning is not the be all and end all of business growth.

There are a four other points below this one that support Mintzberg’s framework. Planning is important because you have to take stock of the resources, capital, equipment, and people you have (or will need) in making your business work. Planning also means you need to be thinking about how your rivals are going to react to whatever you do in your market. Anticipating possible outcomes will help you get the most out of your resources!

2. Manipulation and Strategic Ploys.

Emergent Strategy is a more holistic approach and that means there’s a lot more grey area because people are not cut and dry (or rational). What can you do to better position yourself ahead of your competition? Nothing like good ole tricannery and manipulation! Kidding, maybe. Please, don’t be unethical here. But, you can use information to disrupt, dissuade or even discourage customers from engaging with competitors because they’d be making an inferior choice. That’s literally a big part of what marketing does. Slinging proverbial mud probably isn’t the best approach but communicating your value or worth over your competition’s is what you want. It’s all about triggering that FOMO.

3. Work on your patterns!

Remember building a business is about making good choices. Even if you are an organization of one, that doesn’t mean you are absolved from cultivating good organizational behavior. What are you doing every day to push your business forward? This is everything from your work routines and daily systems all the way to making the big risky choices. When you are on the clock, everything you should be working on should be in an effort to move your business forward.

4. Positioning.

In order for your business to work you have to have a really good understanding of the market or industry you belong to. This is where something like Porter’s 5 Forces comes in handy because through Porter’s model you’ll be able to figure out how you can best differentiate and offer value in your market. You will get to being profitable when you are offering something so awesome that your customers never use a competitor again. This is also a great place to be thinking about your core competencies and how you really differ from everyone else in your market space. Tastes, expectations, and a customer’s willingness to pay all change over time so make sure you are constantly checking in on your competitors and your market.

5. Perspective.

Perspective directly relates to the culture you are building in your business. Again this counts for you even if you are a one person show. What’s the environment you are building? Are you consistent with how you engage with customers? Your online presence? Do you encourage risk taking or innovation? These things shape culture and help you to build perspective. Remember, people are a big part of this strategy and how they perceive your brand counts just as much as them enjoying your products or services. Get your customers on board with how you do business!

Thinking in broader terms - in more humanistic terms is one of my favorite ways to approach to growing a business. Analysis and deciding on how to best allocate resources are important but anticipating the reactions of your competitors and the people you want to engage with shouldn’t be pushed to the end of your to do list. The world of business is kind of like the wild west at the moment. The internet makes it free to start a business but the other side of the coin is that anyone can do it. There are also lots of resources and tools and no one “right” way to find success. Don’t get stuck on just one way and take advantage of all of the resources that are available to help you move the needle in your business. Just maybe not that 87 free guide from someone who’s never done anything..just saying, check your sources.

Why Outcomes Matter In Your Business

There is too much focus on idea generation and idea management and not enough time given to trying things out and actually testing to see if an idea is worth iterating on. (Listen to Gary Vaynerchuk, he'll tell you that being an operator is everything!)  Every article and post I’ve seen lately seems to elude that the only way to find success through innovation is coming up with the next newest, brightest, sexiest, or most cost effective idea.


What happened to the iterative process?

The real iterative process. Not some watered down entrepreneur-light version that gets talked about in conversations between wantrepreneurs. 

What happened to going out and talking to your customers or potential market to figure out what they wanted? Then taking it a step further and seeing if they'd put their debit/credit card on the line for it. 

What happened to doing the work to test whether an idea had merit or could be adapted to succeed?

What happened to making real and action oriented decisions

In order to address those questions entrepreneurs have to first learn (re-learn) how to think about outcomes.

The funnest part about what I do is that I am always getting the opportunity to help entrepreneurs and even politicians understand that strategy is not just about a plan of action or a set of goals you might be working towards. It’s about creating systems to make good choices and to clearly evaluate possible outcomes for those choices. Thinking about as many possible OUTCOMES is such a big part of strategy!

I need you to think back to your high school or college economics classes. You may vaguely remember hearing about oligopolies as a particular kind of way a market might organize itself. It’s not a board game and I’m not going to give you a pop quiz about that particular market structure but what I do want you to try to remember are the concepts around Game Theory.

With me?

Even if you have no idea what I’m talking about I promise it will make sense in a second.

The neat thing about this simple “game” you played in your economics class or that you’ll see in the Game Theory Wikipedia entry is that all the possible outcomes were laid out in front of you. As either a player in that game or as an objective observer of the game, think Dungeon Master if you’re a D&D fan, you were able to always make the choices that were not only best for you but wouldn’t leave you making a decision that could get you into trouble. That’s dominating strategies vs. dominated strategies.

No one wants to be told that they are a bad decision maker but if you are constantly pushing yourself or your team to come up with new ideas you might be falling into bad idea territory. Before you make a commitment to allocate time and resources to idea generation you should evaluate the ideas or business choices that are already on the table. Are you measuring them effectively and can you make marginal changes to increase performance or get to however you are measuring success? Best of all you should be thinking about the outcomes of your ideas or choices.

You’re probably thinking at this point - ok that sounds good but what outcomes should I be looking for? The outcomes you are concerned with are the responses you could anticipate to your choices by your competitors and customers.

How might your customers respond to you offering a discounted version of your service?

Would they still perceive it as valuable?

What about your closest competitor? Would they try to undercut your new discounted pricing to try to stem market share?

Answers to those questions are outcomes. The better you get at trying to anticipate how people and businesses might react to the choices you make with your business the better prepared you will be and ultimately you put yourself in a position to be more profitable. You won’t have to waste time scrambling for the next idea or worry about losing customers because you will have responses and resources allocated/planned for the fallout (good and bad) of any choice that you make.

That’s strategy!

It came from iterating and evaluating not just rushing some new idea to market.

Don't Get Stuck In Strategy Sensory Overload

Henry Mintzberg is a man after my own heart. Too bad you, dear business builder, have probably never heard of him...yet. Emergent strategy is going to be the approach that makes sense for the agile, lean and <insert another word for business flexible> models.

You’re welcome.

Writing about strategy has been awesome for me. It’s forced me to really funnel through all the academic and corporate strategy hype so that I can bring you the most distilled and actionable pieces of strategy goodness. Recently I stumbled upon what is my new favorite definition of what strategy is - “the integrated set of choices that positions the business in its industry to generate superior financial returns over the long run”.

Integrated set of choices. It’s brilliant!

In this definition you don’t see the words: plan, technology, social media, or marketing. What we are talking about is getting to the heart of how you will decide to run your business. This post is dedicated to anyone wanting to up their strategy game and are paralyzed with conceptual strategy sensory overload. Here is your 3 part strategy jumpstart.

In thinking about your integrated set of choices you should be framing them (at least at the start) into one of two camps.  Are you going to differentiate or attempt to be the low cost provider?

I am drastically oversimplifying but if you are wondering what your first steps should be when trying to build a new strategy I would recommend the following 3 steps.

1. Work out your business model.

Business models can change over time and when most people think they are talking about strategic planning, they are really talking about outlining their business model. The what’s and how’s of their business. Flushing out your business model will give you a better idea of what the entire process might look like for the customer or client experience. This is how you will make money. Once you settle on something don’t worry about tinkering with trying to get a few extra fractions of percentage points in profit out of it. Odds are it will probably be changing over time. Leave it alone, start doing the work you outlined and start collecting outcomes.

2. Pick! It’s really hard to be the low cost innovator in any industry or business.

How you get to the golden “disruption” is by experimenting and iterating with your customers. I’m not saying it’s impossible to fly out of the gate and be the instant lowest cost and most needed differentiation in the market - I’m just saying you might get a better return on your immediate investments by picking one and working at it for a little while. I’ve seen many guru’s and self-titled experts misguide clients with hopes of finding the holy grail of competitive advantages that will place them leaps ahead of their competition. That’s not how it works. You need to pick first and then start doing the work to best serve who you think your best customers are right now while doing the best you can to understand the drivers and motivations of your market - especially your competitors because they are going to be the ones reacting to you!

3. Work on systematically making choices that support your pick from number

Any time a decision has to be made you need to be able to objectively qualify it as either supporting your overall strategy or not. If it doesn’t, is there a way to tweak it so that some part of it still might. This is where the fun stuff happens. It’s all in the rationalization. What I mean by systematically making choices is to constantly be evaluating how your are conducting business.

Here’s an example: As part of a service offering you provide paper copies of all your materials. You could go to Staples and keep buying paper because it’s closer, convenient, and instant. Because of that convenience you are probably not getting that paper as cheaply as you might be able to if you worked on creating a relationship with a wholesale or office supply dealer. Now, if you are competing for low cost you might want that mass distribution discount rate but if you are differentiating and Staples offers a very specific, specialized paper then you will have to translate some of that cost over to the end consumer.

This is the decision part. Are you the low cost provider or are you trying to differentiate?

Situations like this happen every day and it’s important to make choices consistently - yes even the smallest ones. This is how real strategies gain momentum, by adjusting behavior and monitoring outcomes. Yes there are bigger frameworks like Porter, Blue Ocean, and Resource Based View that you could be considering. You absolutely should but, don’t get bogged down in the learning and understanding that you never put those frameworks into practice.

Take the first steps and make a few choices now and hold yourself to them. Then iterate as you go!