Category Archives: Strategy

Strategizing Execution

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Take a Tip from the Oil Industry

Strategizing Execution

GUEST POST from Geoffrey A. Moore

When it comes to executing any market development playbook, the work should be organized around the same checklist of factors that structured our earlier blog on marketing strategy. Here is the overall framework to keep in mind:

The first four focus on constructing the ROI engine, the second four, on activating it. Or, to use the parlance of the oil industry, the first four represent the upstream work that locates and extracts the trapped value of an oil reservoir. This is the work of product management. The second four represent the downstream work of refining, distributing, and monetizing the end product. This is the work of product marketing. Both functions should report to a product line manager to ensure that end-to-end coordination is maintained throughout.

When a category is working its way through the Technology Adoption Life Cycle, the roles of the product manager and the product marketing manager change dramatically at each stage. In the early market, neither function has yet been staffed, as it is simply too early to organize for scaled deployment, but for the following three phases of the bowling alley, the tornado, and Main Street, these two functions lead the charge.

For the upstream product manager, here’s how the market development playbook evolves:

In the bowling alley, as we discussed at length in the earlier post on market power, the trapped value is due to a broken mission-critical process that needs substantial re-engineering only made possible by next-generation technology. The product manager needs to become an expert in this use case, and their role calls for them to both guide the product development roadmap and orchestrate the ecosystem to ensure the right partners show up at the right time.

In the tornado, trapped value has migrated from specific use cases to a whole host of potential applications. As a result, demand is widespread, infrastructure owners have budget for the new category and plan to spend it this year, and the goal is to win as much market share as one can. Product roadmaps are driven by feature competitions with others in category, and time to market with the next hot feature is the top concern. Partner recruitment now shifts to the sales side of the house where the goal is to win more market share by expanding distribution coverage beyond the limits of the direct sales force. The product manager supports this effort by driving a “partner-ready” track in the product development roadmap.

On Main Street, the “trapped value” is less like an oil reservoir and more like shale oil—it’s still there, but it is highly diffuse, collecting in small local pockets. Here the end user is in the best position to advocate for the improvements that would help most. Budgets are limited, however, so improvements need to be add-ons that are discretionary, ideally available through a digital-direct transaction.

Turning now to the downstream side of the market development checklist, here’s how the product marketing manager’s playbook evolves:

In the bowling alley, sales plays are consultative, organized around a diagnostic/prescriptive approach which the product marketing manager must continually update as more and more is learned about the problem process and how to fix it. The sales channel is direct, and the pricing is value-based, calibrated by the cost impact of not fixing the problem process. The offer competes with the status quo and the incumbent vendor who will push back with the best “good enough” response it can muster. The positioning has to make clear why that does not fill the bill and how the disruptive offer will take the problem off the table once and for all.

Inside the tornado, sales plays are competitive, organized around battle cards that are competitor-specific, which the product marketing manager must continually update to reflect the latest releases from the competition. Pricing is organized around company status in the market pecking order. Where there is proprietary technology involved, the gorilla sets the premium price for the category overall, chimps can set local pricing in their market segments if they are sufficiently differentiated to keep the gorilla out, and monkeys license or clone the gorilla technology and then compete on lowest price. Where there is no proprietary technology to create a barrier to entry, the same pecking order emerges, but it is much more fluid, meaning that it is much easier for a prince to depose a king than it is for a chimp to displace a gorilla. In all cases, competitions tend to get resolved via product versus product comparisons on features and benefits.

On Main Street, sales plays are transactional, ideally delivered through a digital self-service channel. Here the product marketing manager normally cannot rely on sending prospects to the corporate website—it is typically way too noisy a channel for this body of work—but instead either spin up a separate portal or work with a third-party digital distributor. Pricing and packaging matters a ton in any transactional business model, so the product marketing manager is responsible for frequent A/B testing or comparable experimentation on an ongoing basis. The competition is rarely direct—you are the incumbent vendor at this stage—but you must keep an eye out for the next-generation disruptor who sees your profit pool as a sitting duck. The more you can bolster your core offer with add-ons, the higher the switching costs for your end users, the less likely the challenger can penetrate your market.

Wrapping up

This concludes the sixth and final post in the Hierarchy of Powers series. Here are the links to the other five:

Framing Strategy

Strategizing Category Power: Portfolio Management

Strategizing Company Power: It’s a Team Sport

Strategizing Market Power: Target Market Initiatives

Strategizing Offer Power: The Importance of Overcommitting

I encourage you to print them out and staple them together as a reference guide to keep handy as you take on your next market development challenge.

That’s what I think. What do you think?

Image Credit: Unsplash, Geoffrey Moore

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The Killer Strategic Concept You’ve Never Heard Of

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You Really Need to Know About Schwerpunkt!

The Killer Strategic Concept You've Never Heard Of

GUEST POST from Greg Satell

When Steve Jobs returned to Apple in 1997, his first mission was not to create but destroy. He axed a number of failing products and initiatives, such as the ill-fated Newton personal digital assistant and the Macintosh clones. Under Jobs, Apple would no longer try to be all things to all people.

What came after was not a flurry of activity, but a limited number of highly targeted moves. First came the candy-colored iMac. It was a modest success. Then came the iPod, iPhone and iPad, breakout hits which propelled Apple from a failing company to the most valuable company on earth. Each move shifted the firm’s center of gravity to a decisive point and broke through.

That, in essence, is the principle of Schwerpunkt, a German military term that roughly translates to “focal point.” Jobs understood that he didn’t have to win everywhere, just where it mattered and focused Apple’s resources on just a few meaningful products. The truth is that good strategy relies less on charts and analysis than on finding your Schwerpunkt.

Putting Relative Strength Against Relative Weakness

The iPod, Apple’s first major hit after Jobs’ return, didn’t do anything to undermine the dominance of Microsoft and the PC, but rather focused Apple’s energy on a nascent, but fragmented industry that made products that, as Jobs put it, “sucked.” At this early stage, Apple probably couldn’t have taken on the computer giants, but it mopped up these guys.

Yet the move into music players wasn’t just about picking on scrawny weaklings, it leveraged some of Apple’s unique strengths, especially its ability to design simple, easy-to-use interfaces. Jobs’ own charisma and stature, not to mention the understanding of intellectual property rights he gained from his Pixar business, made him almost uniquely placed to navigate the challenges of setting up iTunes store, which at the time was a quagmire.

In Good Strategy | Bad Strategy management scholar Richard Rumelt makes the point that good strategy puts relative strength to bear against relative weakness and that is a key part of Schwerpunkt. In order to find your focal point, you need to get a sense of where your strengths lie and where are the best opportunities to leverage those strengths.

That’s exactly what Steve Jobs did at Apple over and over again. Entering the music player business would not have worked for Microsoft or Dell, who both dominated the computer industry at the time. In fact, after the launch of the iPod both tried to create competitors and failed. The iPod was Apple’s Schwerpunkt, nobody else’s.

Identifying The Focal Point

In a military conflict, leaders determine where to concentrate their efforts by weighing a variety of factors, including commander’s intent, or the desired end state, the situation on the ground gleaned through intelligence, the terrain and the enemy’s disposition on that terrain. Officers spend their whole careers learning how to make wise decisions about schwerpunkt.

Business leaders need to weigh similar factors, including the internal capabilities of their organization such as talent, technology and information, the market context, the competitive landscape as well as what they can access through external partner ecosystems. By the time Steve Jobs returned to Apple, he had become a master at evaluating the forces at play.

With respect to the iPod, he felt confident in Apple’s ability to combine technology with design and that the market for digital music players, as he liked to put it, sucked. By looking at what competitors had to offer, he was confident that if he could create a device that would “put 1000 songs in my pocket,” he would have a hit product.

The only problem was that the technology to create such a product didn’t exist yet. That’s where the external ecosystem came in. On a routine trip to Japan to meet with suppliers, an engineer at Toshiba mentioned that the company developed a tiny memory drive that was about the size of a silver dollar, but didn’t know what it could be used for.

Jobs immediately recognized that the memory drive was his Schwerpunkt. He produced a $10 million check on the spot and got exclusive rights to the technology. Not only would he be able to create his iPod with the “1000 songs in my pocket” he so coveted, for a time at least, none of his competitors would be able to duplicate its capability.

Getting Inside The OODA Loop

When he was still a pilot, the legendary military strategist John Boyd developed the OODA loop to improve his own decision making in the cockpit. The idea is that you first OBSERVE, your surroundings, then you ORIENT that information in terms of previous knowledge and experiences. That leads you to DECIDE and ACT, which will change the situation in some way, that you will need to observe, orient, decide and act upon.

We can see how Steve Jobs employed the OODA loop in making the decision to immediately produce a $10 million dollar check for a technology that Toshiba had no idea what to do with. He took the new information he observed and immediately oriented it with previous observations he made about the market for digital music devices.

Yet what happened next was even more interesting. When the iPod came out, it was an immediate hit, which changed the basis of competition. Other computer companies, which were competing in the realm of laptops, desktops and servers, suddenly faced a very different market and moved to create their own digital music players. Dell’s Digital Jukebox launched in 2004, Microsoft’s Zune came out in 2006. Both failed miserably.

By then Apple was already preparing the launch of the iPhone, which would change the game again, causing its competitors to Observe, Orient, Decide in Act in reaction to what Apple was doing. Boyd called this “getting inside your opponent’s OODA Loop.” By continually having to orient and react to Apple, they weren’t able to gain the initiative.

Today, it’s hard to remember just how powerful firms like Microsoft and Dell were back then, but they were absolute giants. Nevertheless, by employing the concept of Schwerpunkt, Apple went from near bankruptcy to dominating its rivals in less than a decade.

A Journey Rather Than A Destination

The biggest strategic mistake you can make is to try and win everywhere at once. To win, you need to prevail in the decisive battles, not the irrelevant skirmishes. That, in essence, is the principle of Schwerpunkt—to identify a focal point where you can direct your resources and efforts.

When Steve Jobs returned to Apple, computer companies were duking it out in the PC market, yet he identified digital music players as his Schwerpunkt and the iPod made Apple a serious player. As his competitors were still reacting, he launched the iPhone and on it went. Whenever Steve Jobs would, towards the end of a product presentation say, “and just one more thing,” You could guarantee that he had identified a new Schwerpunkt.

Notice how Schwerpunkt is a dynamic, not a static, concept. It was Jobs’ ability to constantly innovate Apple’s approach, by constantly observing, reorienting and shifting the competitive context. In each case, his strategy was uniquely suited to Apple’s, capabilities, customers and ecosystem. Competitors Microsoft or Dell, more suited to the enterprise market, couldn’t be successful with a similar approach.

There is no ideal strategy, just ones that are ideally suited to a particular context, when relative strength can be brought to bear against relative weakness. Discovering the center of gravity at which you can break through is more of a journey than a destination, you can never be sure beforehand where exactly you will find it, but it will become clear once you’ve arrived.

— Article courtesy of the Digital Tonto blog
— Image credit: Unsplash

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Fearless Fashionistas Are Staying Ahead of Change

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Why Aren’t You?

Fearless Fashionistas Are Staying Ahead of Change

GUEST POST from Janet Sernack

As a fashion and lifestyle conceptualist and analyst for a major Australian department store group during the pre-Internet era, I co-created, with the GM of Marketing and GM of Women’s, Men’s, Children’s Apparel and Accessories, a completely new role. I took on the responsibility of forecasting and predicting customer, lifestyle, and fashion trends two to three years ahead of the present. While forecasting involves estimating future events or trends based on historical and statistical data, making predictions involves forming educated guesses or projections that do not necessarily rely on such data. Both forecasting and predictive skills are vital for developing strategic foresight—an organized and systematic approach to exploring plausible futures and anticipating, better preparing for, and staying ahead of change.

In this exciting new role, I had to ensure that my forecasts and predictions did not cause people to become anxious and tense, leading to poor or conflicting decisions involving millions of dollars. Instead, I needed to make sure that my forecasts convinced people that the well-researched information had been collected, captured, analyzed, and synthesized effectively. To ensure that the discovery of new marketing concepts is prompted by the development of strategic foresight, which enables people to make informed, million-dollar investment decisions by staying ahead of change.

This was before the revolutions in Design Thinking and Strategic Foresight. It taught me the fundamentals of agile and adaptive thinking processes, as well as the importance of creating and capturing value by viewing it from the customer’s perspective. It was initiated through rigorous research that involved framing the domain and scanning for trends by mentally moving back and forth among many scenarios, making links, connections, and unlikely associations. The information could then be actualized, analyzed, and synthesized to focus on evaluating a range of plausible futures as forecast scenarios. To envision the future by identifying the most promising or commercially viable trends in Australian marketing and merchandising, thereby supporting better policy-making across the organization, which consisted of forty-two department stores.

At the time, Australian fashion and lifestyle trends were considered six months behind those in Europe and the USA. This allowed me to utilize current and historical sales data, along with statistical methods, to create a solid foundation for the sales and marketing situation across various merchandise segments. Having completed a marketing degree as an adult learner, I applied and integrated marketing concepts and principles from product and fashion lifecycle management. Through being inventive, I built a fashion and lifestyle information system that had not previously existed, enabling the whole organization to stay ahead of change.  

I conducted backcasting research and built relationships with top Australian manufacturers that supplied our customers, gathering evidence and feedback that supported or challenged my approach to developing trend-tracking processes over a three-year period. I traveled widely four times a year to Europe and the USA to research the fashion and lifestyle value chain, visiting yarn, textile, couture, and ready-to-wear shows to explore, discover, identify, and validate emerging and diverging trends, providing context and evidence of their evolution and convergence. This was further tested and validated by analyzing and synthesizing the most critical and commercially successful fashion and lifestyle ranges marketed and merchandised at that time in major global department stores and leading retail outlets.

Formal research was also carried out through various channels, including desktop research, fashion and lifestyle forecasting services, as well as USA and European media, to gather customer insights that could then be identified, analyzed, synthesized, and developed and implemented into key fashion marketing and merchandising trends across the entire group of forty-two department stores. This enabled them to present a coordinated marketing and merchandising approach across all apparel to customers and stay ahead of change.

This was my journey into what is now known as strategic foresight, laying the vital foundations for developing my brain’s neuroplasticity and neuroelasticity, and becoming an agility shifter, with a prospective mind and adaptive thinking strategy that enables me to stay ahead of change.

Staying ahead of change

It took me many years to realize that I was chosen for this enviable role, not because of my deep knowledge and extensive experience, but for my intuitive and unconventional way of thinking. In Tomorrowmind, Dr Martin Seligman calls this ‘prospection’, an ability to metabolize the past with the present to envisage the future. He states that a prospective mind extracts the nutrients from the past and the present, then excretes the toxins and ballast to prepare for tomorrow. He defines prospection as “the mental process of projecting and evaluating future possibilities and then using these projections to guide thought and action.”

This develops the ability to stay ahead of change by anticipating and adapting to it, and includes many elements, such as:

  • Being able to adopt both a systemic and tactical approach, as well as a structured and detailed perspective alongside an agile and flexible view of the current reality or present state, simultaneously.
  • Sensing, connecting, perceiving, and linking operational patterns, and analyzing and synthesizing them within their context.
  • Generating, exploring, and unifying possibilities and options for selecting the most valuable commercial applications that match customers’ lifestyle needs and wants.
  • Unlearning and viewing the world with fresh eyes through sensing and perceiving it through a paradoxical lens, and cultivating a ‘both/and’ bird’s-eye perspective.
  • Opening your heart, mind, and will to relearning and learning, letting go of what may have worked in the past, focusing your emotional energy, towards learning new mindsets and mental models and relearning how to perceive the world differently.
  • Wondering and wandering into fresh and multiple perspectives underlie the development of a strategic foresight capability.

This approach helps shift your focus across the polarities of thought, from a fixed, binary, or linear and competitive approach to one that is neuro-scientifically grounded. It aims to foster your neuroplasticity and neuroelasticity within your brain, enabling the development of new and diverse perspectives that support prospective, strategic, critical, conceptual, complementary, and creative thinking processes necessary for staying ahead of change.

  • Improves strategic thinking

Strategic foresight aims to anticipate, analyze, synthesize, adapt to, and shape the factors relevant to a person, team, or company’s business, enabling it to perform and grow better than its competitors and stay ahead of change. It requires confidence, capacity, and competence to partner effectively and to think and act differently, using cutting-edge analytics, proven creative tools, and artificial intelligence (AI). This approach empowers, enables, and equips individuals with better, more risk-informed strategic thinking. It also provides a foundation for creative thinking by helping people better understand the options and alternatives available to them. Additionally, it identifies potential developments that could lead to building a competitive advantage at the individual, team, or organizational level, enabling them to stay ahead of change, innovate, and succeed in an uncertain business environment.  

  • Increases adaptability

In a recent article, ‘Navigating the Future with Strategic Foresight, the Boston Consulting Group stated:

“It’s not about gathering more data than everyone else but about being able to detect forward-looking signals, stretch perspectives, and interpret the data with fresh eyes. Uncertainty does not dissipate; rather, strategic foresight offers the clarity of direction that comes from greater confidence in data, assumptions, and analysis”.

The information gathered through strategic foresight enhances people’s ability and willingness to adapt their responses to uncertainty and unexpected situations and embrace change. It provides concrete evidence, in the form of data, assumptions, and analysis, to support people in being adaptive. This requires being open to unlearning, relearning, and learning, protecting you against anxiety, stress, and burnout, and helping you stay ahead of change and become resilient to create, invent, and innovate through chaos, uncertainty and disruption.

This is an excerpt from our upcoming book, “Anyone Can Learn to Innovate,” scheduled for publication in early 2026.

Please find out about our collective learning products and tools, including The Coach for Innovators, Leaders, and Teams Certified Program, presented by Janet Sernack. It is a collaborative, intimate, and profoundly personalized innovation coaching and learning program supported by a global group of peers over nine weeks. It can be customized as a bespoke corporate learning program.

It is a blended and transformational change and learning program that will give you a deep understanding of the language, principles, and applications of an ecosystem-focused, human-centric approach and emergent structure (Theory U) to innovation. It will also upskill people and teams and develop their future fitness within your unique innovation context. Please find out more about our products and tools.

Image Credit: Pixabay

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Strategizing Market Power

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Target Market Initiatives

Strategizing Market Power - Target Market Initiatives

GUEST POST from Geoffrey A. Moore

Market power derives from addressing an urgent mission-critical use case in a particular vertical industry requiring a specialized solution that the incumbent vendors either cannot or will not provide. Power aggregates around a single vendor who is the first to provide an end-to-end solution (what Ted Levitt taught us to call the whole product), typically with the support of partners whom the vendor has recruited to the task. Once success has been verified, prospective customers rally around the new solution, making it the de facto standard for that market segment, effectively excluding all other competition. This dramatically lowers the cost of acquisition and maximizes the lifetime value of the addressable market.

The mechanism for obtaining market power is called a target market initiative. It begins with the selection of a target market segment. Here the criteria for selection are three:

  1. Big enough to matter. The goal is to win well over 50% of the total segment within a three-year horizon, with the resulting revenue providing a material portion of the organization’s total revenue, and an even more meaningful portion of its profit contribution.
  2. Small enough to lead. Again, if your organization is going to win over 50% of the segment within a three-year period, the segment must be small enough to make this feasible given your current size and funding.
  3. Good fit with your crown jewels. To address an intractable problem requires breakthrough capability that others do not have, or what we like to call your “crown jewels.” These accelerate your path to success and provide a barrier to entry to protect your market segment leadership position once it is attained.

The playbook for running a target market initiative is described at length in Crossing the Chasm. It is organized around the following set of factors:

  • Target Customer. The bullseye target is the business process owner for the broken mission-critical process. They will provide the subject matter expertise. A secondary target is their executive sponsor. They will create budget to fund the effort.
  • Compelling Reason to Buy. The use case has to be both mission-critical and urgent, in order to overcome a pragmatist’s normal inertial resistance to embracing anything categorically new. Here pain, not gain, is the source of the trapped value that moves the customer to lean in and collaborate, and all your sales and marketing should be focused on the relevant pain points and their remedies.
  • Whole Product. This is the bill of materials for the complete solution, everything the customer needs to take the problem off the table, with nothing extra added. It is designed backward from the customer’s problem, not forward from your supply chain or your financial goals and objectives.
  • Partners and Allies. Whatever is on the whole product’s bill of materials that is not provided by your company must come from a partner. One of the functions of a target market initiative is to orchestrate the coming together of such partners to ensure timely delivery of the whole product. The focus is on completing the solution, not adding sales coverage.
  • Distribution. Target market initiatives require a direct sales channel to execute a consultative sales process, organized around a diagnostic/prescriptive approach, supported by marketing that speaks directly to the business process owner and their executive sponsor. This must not be outsourced, as it is through these direct interactions that you establish your company as the market segment leader.
  • Pricing. Pricing is value-based, calibrated by the consequences of the current as-yet-to-be-fixed broken mission-critical business process. Discounting is never appropriate as the customer is far more concerned about addressing their urgent needs than saving on the purchase price.
  • Competition. There are two classes of competitors in play. The first is the incumbent vendor who is not solving the problem satisfactorily at present but who could throw people at it in an attempt to get to “good enough.” The other is a vendor with breakthrough capabilities similar to yours who has not made the commitment to deliver the whole product but who has a partner that might try to do so.
  • Positioning. You are the breakthrough vendor who has made the whole product commitment, meaning you have demonstrated a deep understanding of the customer’s industry and its problem process, and you have developed a repeatable solution that will get better as each new instantiation leads to more useful features and a more engaged ecosystem of partners.
  • Next Target Customer. For start-ups, this will normally be an adjacent segment, either a new use case from the same customer base or the same use case from a different segment. For established enterprises whose size dictates that target market segments can never be material to total revenues, winning a target market segment creates a hook for M&A as well as makes you a lot more knowledgeable about which companies are worth acquiring.

Target market initiatives are the most reliable play in the B2B innovation playbook, as witnessed by the staying power of Crossing the Chasm, currently in its fourth decade of being in print, pushing two million copies in total sales worldwide. In closing, then, let me leave you with eight great reasons for building one into your next annual plan:

  1. Gain market adoption for a disruptive technology. This is the classic chasm-crossing play.
  2. Penetrate a new geography. Establish your reputation as a worthy vendor.
  3. Get out from behind the market leader. Gorillas can never defend themselves against highly focused chimps. All they can do is try to isolate you from making any further progress.
  4. Anchor a turnaround. When your enterprise has been on a losing streak, it is critical to “win one for the Gipper.” Target market initiatives are your best bet.
  5. Solve for the “stuck in neutral” problem. When the macro economy is in the doldrums, and customers are slow to buy anything, a truly problematic use case overcomes their hesitancy.
  6. Capitalize on a great niche opportunity. There are use cases where the size of the market is small, but the trapped value is enormous, and you can build a major franchise without ever leaving the segment, as has happened in CAD, Wall Street, health care, and aerospace.
  7. Exploit the “granularity of growth.” In mature markets where average growth rates are in the low single digits, there are always pockets of double-digit growth around problematic use cases. You just need to target them directly.
  8. Capitalize on a market in transition. As markets are working through long-lead transitions, short-term progress can be made locally rather than globally. The evolution of the hybrid workplace would be a current example.

That’s what I think. What do you think?

Image Credit: Pexels, Geoffrey Moore

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Three Executive Decisions for Strategic Foresight Success or Failure

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Three Executive Decisions for Strategic Foresight Success or Failure

GUEST POST from Robyn Bolton

You stand on the brink of an exciting new adventure.  Turmoil and uncertainty have convinced you that future success requires more than the short-term strategic and business planning tools you’ve used.  You’ve cut through the hype surrounding Strategic Foresight and studied success.  You are ready to lead your company into its bold future.

So, where do you start?

Most executives get caught up in all the things that need to happen and are distracted by all the tools, jargon, and pretty pictures that get thrown at them.  But you are smarter than that.  You know that there are three things you must do at the beginning to ensure ultimate success.

Give Foresight Executive Authority and Access

Foresight without responsibility is intellectual daydreaming.

While the practice of research and scenario design can be delegated to planning offices, the responsibility for debating, deciding, and using Strategic Foresight must rest with P&L owners.

Amy Webb’s research at NYU shows that when a C-Suite executive with the authority to force strategic reviews oversaw foresight activities, the results were more likely to be acted on and integrated into strategic and operational plans.  Shell serves as a specific example of this, as its foresight team reported directly to the executive committee, so that when scenarios explored dramatic oil price volatility, Shell executives personally reviewed strategic portfolios and authorized immediate capability building.

Start by asking:

  1. Who can force strategic reviews outside of the traditional planning process?
  2. What triggers a review of Strategic Foresight scenarios?
  3. How do we hold people accountable for acting on insights?

Demand Inputs That Challenge Your Assumptions

If your Strategic Foresight conversations don’t make you uncomfortable, you’re doing them wrong.

Webb’s research also shows that successful foresight systematically explores fundamental changes that could render the existing business obsolete.

Shell’s scenarios went beyond assumptions about oil price stability to explore supply disruptions, geopolitical shifts, and demand transformation. Disney’s foresight set aside traditional assumptions about media consumption and explored how technology could completely reshape content creation, distribution, and consumption.

Start by asking these questions:

  1. Is the team going beyond trend analysis and exploring technology, regulations, social changes, and economic developments that could restructure entire markets?
  2. Who are we talking to in other industries? What unusual, unexpected, and maybe crazy sources are we using to inform our scenarios?
  3. Does at least one scenario feel possible and terrifying?

Integrate Foresight into Existing Planning Processes

Strategic Foresight that doesn’t connect to resource allocation decisions is expensive research.

Your planning processes must connect Strategic Foresight’s long-term scenarios to Strategic Planning’s 3–5-year plans and to your annual budget and resource decisions. No separate foresight exercises. No parallel planning tracks. The cascade from 20-year scenarios to this year’s investments must be explicit and ruthless.

When Shell’s scenarios explored dramatic oil price volatility over decades, Shell didn’t file them away and wait for them to come true.  They immediately reviewed their strategic portfolio and developed a 3–5-year plan to build capabilities for multiple oil futures. This was then translated into immediate capital allocation changes.

Disney’s foresight about changing media consumption in the next 20 years informed strategic planning for Disney+ and, ultimately, its operational launch.

Start by asking these questions:

  1. How is Strategic Foresight linked to our strategic and business planning processes?
  2. How do scenarios flow from 20-year insights through 5-year strategy to this year’s budget decisions?
  3. How is the integration of Strategic Foresight into annual business planning measured and rewarded?

Three Steps. One Outcome.

Strategic foresight efforts succeed when they have the executive authority, provocative inputs, and integrated processes to drive resource allocation decisions. Taking these three steps at the very start sets you, your team, and your organization up for success.  But they’re still not a guarantee.

Ready to avoid the predictable pitfalls? Next week, we’ll consider why strategic foresight fails and how to prevent your efforts from joining them.

Image credit: Pexels

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Strategic Foresight Secrets to Success

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Strategic Foresight Secrets to Success

GUEST POST from Robyn Bolton

Convinced that Strategic Foresight shows you a path through uncertainty?  Great!  Just don’t rush off, hire futurists, run some workshops, and start churning out glossy reports.

Activity is not achievement.

Learning from those who have achieved, however, is an excellent first activity.  Following are the stories of two very different companies from different industries and eras that pursued Strategic Foresight differently yet succeeded because they tied foresight to the P&L.

Shell: From Laggard to Leader, One Decision at a Time

It’s hard to imagine Shell wasn’t always dominant, but back in the 1960s, it struggled to compete.  Tired of being blindsided by competitors and external events, they sought an edge.

It took multiple attempts and more than 10 years to find it.

In 1959, Shell set up their Group Planning department, but its reliance on simple extrapolations of past trends to predict the future only perpetuated the status quo.

In 1965, Shell introduced the Unified Planning Machinery, a computerized forecasting tool to predict cash flow based on current results and forecasted changes in oil consumption.  But this approach was abandoned because executives feared “that it would suppress discussion rather than encourage debate on differing perspectives.”

Then, in 1967, in a small 18th-floor office in London, a new approach to ongoing planning began.  Unlike past attempts, the goal was not to predict the future.  It was to “modify the mental model of decision-makers faced with an uncertain future.”

Within a few years, their success was obvious.  Shell executives stopped treating scenarios as interesting intellectual exercises and started using them to stress-test actual capital allocation decisions.

This doesn’t mean they wholeheartedly embraced or even believed the scenarios. In fact, when scenarios suggested that oil prices could spike dramatically, most executives thought it was far-fetched. Yet Shell leadership used those scenarios to restructure their entire portfolio around different types of oil and to develop new capabilities.

The result? When the 1973 oil crisis hit and oil prices quadrupled from $2.90 to $11.65 per barrel, Shell was the only major oil company ready. While competitors scrambled and lost billions, Shell turned the crisis into “big profits.”

Disney: From Missed Growth Goals to Unprecedented Growth

In 2012, Walt Disney International’s (WDI) aggressive growth targets collided with a challenging global labor market, and traditional HR approaches weren’t cutting it.

Andy Bird, Chairman of Walt Disney International, emphasized the criticality of the situation when he said, “The actions we make today are going to make an impact 10 to 20 years down the road.”

So, faced with an unprecedented challenge, the team pursued an unprecedented solution: they built a Strategic Foresight capability.

WDI trained over 500 leaders across 45 countries, representing five percent of its workforce, in Strategic Foresight.  More importantly, Disney integrated strategic foresight directly into their strategic planning and performance management processes, ensuring insights drove business decisions rather than gathering dust in reports.

For example, foresight teams identified that traditional media consumption was fracturing (remember, this was 2012) and that consumers wanted more control over when and how they consumed content.  This insight directly shaped Disney+’s development.

The results speak volumes. While traditional media companies struggled with streaming disruption, Disney+ reached 100 million subscribers in just 16 months.

Two Paths.  One Result.

Shell and Disney integrated Strategic Foresight differently – the former as a tool to make high-stakes individual decisions, the latter as an organizational capability to affect daily decisions and culture.

What they have in common is that they made tomorrow’s possibilities accountable to today’s decisions. They did this not by treating strategic foresight as prediction, but as preparation for competitive advantage.

Ready to turn these insights into action? Next week, we’ll dive into the tools in the Strategic Foresight toolbox and how you and your team can use them to develop strategic foresight that drives informed decisions.

Image credit: Gemini

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Company Power Strategy is a Team Sport

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Company Power Strategy is a Team Sport

GUEST POST from Geoffrey A. Moore

Company power is primarily a function of the amount of ecosystem support for your offerings, which in turn is due largely to the market-making opportunities you create for partners to resell or flesh out your whole product. Market share leaders enjoy the most extensive ecosystem support because their installed base creates the majority of partner opportunities.

Let me note, however, that in the context of our Hierarchy of Powers framework, market share is a misnomer. The correct phrase would be category share. That’s because in our taxonomy markets are defined by groups of customers whereas categories are defined by groups of competitors. When financial analysts talk about market share, they are referring to category share, and it is your share of the category that sets the upper bounds of the opportunities you can create for ecosystem partners, the percentage of the total category you can make available to the ecosystem.

After category share, the next most important determinants of company power are barriers to entry and barriers to exit, or what we often just call “stickiness.” Because sticky offerings create ongoing opportunities for up-sell and cross-sell, as well as resist being displaced by lower-cost competitors, they enable vendors to sustain above-commodity pricing margins for the life of the category.

Gorilla Royalty Game

The strongest form of stickiness comes from proprietary technology that is category-enabling, the kind that Oracle has had in databases, Qualcomm in smartphones, Microsoft in operating systems, and Intel in microprocessors. When a category consolidates around such companies, it creates a hierarchy of company power we call a Gorilla Game, entailing three roles — gorilla, chimp, and monkey. In the absence of proprietary technology, categories form an analogous hierarchy with much lower switching costs, something we call a royalty game, organized around a parallel set of roles — king, prince, and serf. Cellular telephony, Wintel PCs, WiFi networking, and DRAM memory chips all exemplify categories with this latter type of structure.

The difference in stickiness between these two hierarchies creates dramatic differences in market capitalization. In the gorilla game, the gorilla dominates the category for the entirety of its life cycle, and thus its market cap gets a very high premium indeed. Chimps also have proprietary technology, hence stickiness, but are not the market standard, hence more limited scope. Their best play is to develop an independent ecosystem organized around high-value use cases specific to particular vertical markets, the way the Unix workstation vendors competed successfully against PCs with CAD-like applications for cinema, semiconductor, oil exploration, fluid dynamics, and high-frequency trading. And finally, there is a very large market open to being served by monkeys who are able to clone the gorilla technology and deliver a plug-compatible alternative at a much lower price.

When it comes to royalty games, the absence of proprietary technology with high switching costs leads to a much more fluid hierarchy of power. The category leader is still the king, but it can be deposed by some up-and-coming prince, the way that Compaq displaced the IBM PC, the way that Micron can challenge Samsung in DRAMs, the way that Aruba can challenge Cisco in Wi-Fi. Here the low-cost providers, whom we termed the serfs, have an easier time gaining entry into a large and growing market, but a harder time sustaining even the most modest of margins, as there is always some hungrier low-cost competitor looking over their shoulder.

Overall, the key takeaway is that, while the gorillas and gorilla games get the bulk of the attention, especially from the investment community, all six of these strategies are perfectly viable provided you play within the parameters of your role. The key is not to hallucinate about what role that is.

That’s what I think. What do you think?

Image Credit: Pexels, Geoffrey Moore

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Your Legends Define Your Culture

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Your Legend Defines Your Company Culture

GUEST POST from Shep Hyken

It was about 50 years ago, in or around the mid to late 1970s, when a brand’s legendary story was born. This true story perfectly articulates this brand’s culture. It perfectly demonstrates how empowered employees should act and defines how customers should be treated. The story is Nordstrom’s legendary tire story.

The short version of the story is that a customer brought a pair of tires into a Nordstrom store in Fairbanks, Alaska, and asked to return them. He insisted he purchased them at that location. Craig Trounce, the store associate who was working that day, gave the customer a refund.

Obviously, Nordstrom doesn’t sell tires—and never did. However, in 1975, Nordstrom purchased three retail stores owned by Northern Commercial Company, which did sell tires. Once Nordstrom took over the stores, it restocked them with its own inventory, which didn’t include tires.

According to the story on the Nordstrom website, “Instead of turning the tires away, Craig wanted to do right by the customer, who had driven more than 50 miles with the intention of returning these tires. Knowing little about how tires are priced, Craig called a tire company to get their thoughts on how much the tires were worth. He then gave the customer the estimated amount, took the tires and sent him on his way.”

That story became the legend that defines Nordstrom’s culture. So, as a leader of your organization, what story does your company or brand have that defines your culture? If you don’t have one, maybe it’s time to find it. And it’s never too late.

John W. Nordstrom and his partner, Carl F. Wallin, opened their first store, a shoe store, in 1901. It wasn’t until 22 years later that they had their second store. In 1963 the store expanded beyond shoes and started selling clothing, and in 1971, the company went public and officially changed its name to Nordstrom.

The point is that it took almost 75 years for a company that already had a reputation for delivering an excellent service experience to create its legend. This single act of customer service has been told countless times in training sessions, books, articles and keynote speeches. It’s not just about tires or refunds. It’s about empowering employees to make good decisions. It’s about emphasizing a company’s culture. And if you could monetize it, how much money would a company have to pay to generate the positive PR this created for Nordstrom?

Many other companies have similar stories. Some of the more recognizable brands with “legend status” stories can be found through a Google search and include the Zappos 10-hour phone call that some say is an all-time customer service call record, the story of how empowered employees at the Ritz-Carlton are allowed to spend up to $2,000 to solve guest problems and many more.

So, what’s your legend? And if you don’t know, how do you find it?

I’m going to bet there is some account of how someone in your organization responded to a customer or did something of note that is worth sharing and turning into your version of the Nordstrom tire story. That’s the place to start. And the best way to go about it is to simply ask every employee to share their favorite story about how they created an amazing experience for one of your customers.

In this first round, don’t make this a huge writing assignment. Just ask for a few sentences. From there, someone (or a team) will sift through the responses and look for five or 10 that stand out. You’re looking for:

  1. moments in which employees went above and beyond
  2. situations that perfectly demonstrate your values
  3. stories that are simple to tell but powerful in impact

Then go back to the sources of these stories and ask for more detail. In a short time, you’ll have several great stories to consider. And in the process, you’ll also discover ideas based on these stories to turn into “best practices” examples that other employees can learn from and emulate.

Your service legend doesn’t need to involve tires or thousand-dollar gestures. It simply needs to authentically represent who you are as a company and what you stand for. The best legends aren’t manufactured. They’re discovered in the everyday actions of employees who truly understand and embrace your culture. When you find your story, celebrate it, share it and let it inspire the next generation of customer service excellence in your organization. After all, somewhere in your company today, an employee might be creating the next legendary story that will define your culture for years to come.

Image Credit: Pexels

This article originally appeared on Forbes.com

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Portfolio Management and Category Power

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Portfolio Management and Category Power

GUEST POST from Geoffrey A. Moore

Portfolio management is the most consequential and the most challenging element in strategic planning. There is typically a ton of data, but none of it can really speak to the host of underlying risks that underpin long-range investments in net new lines of business, ones that pay off primarily in the out years. The best one can do is leverage experience, frameworks, and pattern recognition to navigate what are inevitably uncharted waters. With that in mind, here are some things to keep in view.

  1. Category Maturity Life Cycle: Tornadoes versus Main Street. Who doesn’t want a growth portfolio? To get one, however, means your enterprise must have meaningful plays in categories that are undergoing secular growth. Secular growth happens when net new budget is being created for a new purchase category across a broad spectrum of customers, a phase in technology adoption we have termed the tornado. Once the tornado has passed, the category will have an established place in these customers’ budgets going forward, a stage in the life cycle we call Main Street, one that is characterized by cyclical growth. Cyclical growth rewards inertial momentum, the goal being to leverage incumbency to grow wallet share more than market share. Secular growth rewards disruption, the goal being to displace an established profit pool by leveraging an emerging one. These dynamics transcend the efforts of most companies to influence (gorilla leaders being the exception), so assessing category power is first and foremost getting clarity on the hand you have been dealt. That will shape your ambitions for next year’s performance and set a baseline for future investment.

  2. Valuation: Growth investors versus value investors. Both forms of growth, secular and cyclical, are valued by investors for their respective risk-adjusted returns, but in different ways for different reasons. Growth investors are looking for a big pop and are willing for you to take considerable risk to get it. Value investors by contrast seek predictably consistent performance—an earnings-oriented approach that outperforms bonds with a minimum of additional risk. Both groups discount the value of the other group’s approach which exposes the market cap of established enterprises to a “conglomerate discount,” a painful penalty given that their stock is the major currency that will fund any M&A. Managing for shareholder value, in other words, gets hung up on the question, which shareholders? The reality is that most publicly held companies have a mix across the board, so the salient issue to address is how much of our operating budget should we commit to the current year versus the out years? Having a principled discussion on this topic leading to a definitive commitment is essential to creating a coherent strategy.

  3. Capital market status: PE-backed versus publicly held. Strategic planning in privately held enterprises is typically more straightforward because the board of directors representing the investing firms share a common approach to risk-adjusted returns. This is why when publicly held companies like Dell reach a crossroads that requires a patch of difficult sledding, they choose to take themselves private in order to accelerate their course corrections. The price to pay for this option is committing to operating principles, performance milestones, and a management discipline that meets the PE investors’ approval.

  4. Leveraging M&A: Incubate before you commit. Pundits like to claim that most M&A transactions fail to deliver on their promise (although recent research puts the odds at closer to fifty-fifty). Some of the failures, however, are self-inflicted wounds that can be avoided by taking a multi-step approach. If your enterprise has a venture investment capability, taking positions in disruptive start-ups with observer rights is a good way to test the waters. In parallel, the goal is to incubate comparable initiatives internally and get them into the market as trial balloons. The difference between this and the early-stage venture model is that you cannot wait for these organic efforts to scale—it will simply take too long. So, you are not trying to win the game with your new offers, just learn it. Sooner or later, you will turn to M&A to acquire something of meaningful mass, the difference being, because you have spent the intervening time in the market competing, you will be a much more knowledgeable acquirer than you otherwise would be.

  5. Synergy management: Year One is the one that matters most. Value-oriented M&A is intended to consolidate mature categories with cyclical growth. It is based on an inside-out approach to cost reduction focusing on eliminating duplicated functions, typically in the back office and the supply chain. Growth-oriented M&A, by contrast, takes an outside-in approach focusing on accelerating bookings and revenues through a series of go-to-market and customer success initiatives. When a smaller high-growth enterprise gets acquired by a larger, slower-growing one, the opportunity is to galvanize the latter’s existing customer base and ecosystem relationships, as well as its global sales and service footprint, to capture market share under highly favorable selling conditions. The trick is to do this quickly, while the iron is still hot, and that requires special incentives and strong management support to build trust between the old and new guards and to overcome the initial inertial resistance that accompanies any acquisition. In sum, what looks good on paper could very well be good in actual fact, but only after you execute Captain Picard’s famous dictum: Make it so!

  6. M&A integration: Year Two is the one that matters most. If the first year is all about getting the go-to-market right as fast as possible, the second is about creating lasting relationships that will enable the two enterprises to operate as one. There are four areas of interest here—the product team, the sales team, the management team, and the culture overall—and each one calls for a slightly different approach. The single most important outcome is to keep the product talent in place—they have the keys to the new kingdom. The sales team can and normally should continue to function as an overlay during the second year, but in parallel a transition to an integrated organization must begin so that in Year Three the overlay is eliminated. The management team is a wild card. Despite all the best intentions on both sides of the table, including vesting incentives of various kinds, entrepreneurial CEOs rarely stay, nor should they. The skillset for disrupting does not translate well into the skillset for scaling and optimizing. This suggests that from the outset a leadership transition should be on the table, typically enlisting an up-and-coming executive from the acquiring enterprise to personally throw themselves into the gap and pull the two organizations together leveraging every talent and tool they have. Finally, large enterprises necessarily entail an enormous amount of process management, something that goes against the grain of entrepreneurial culture, so one needs to tread carefully here, with the understanding that long term there can only be one enterprise, and by virtue of its scale, it will be process-driven for much of its day-to-day work. To promise the acquired company anything else will only create disillusion and disintegration down the line.

  7. Decision Time: To play or not to play. There is no formula for making transformational decisions, but there are some guidelines to keep in mind. The first is few, and far between. Transformations are disruptive to the core business that is funding your overall operation, and it takes time for everything to stabilize around a new portfolio. A second principle is existential threat. If the emerging category obsoletes a pillar of your core business, the way digital photography obsoleted film, the way that streaming is obsoleting conventional TV, then you must take action. Absent such a forcing function, a third principle to consider is value to the existing customer base, with the corollary of opportunity for our existing ecosystem. In other words, does the world want you to do this? Transformation takes a village, and it matters a great deal how much your constituencies will lean in to help you through it. Finally, when your competitors hear about this, will they smile and laugh, or will they say Oh sh*t! If the latter, it just puts icing on the cake.

  8. Plan B: Leverage the updraft. The stars have to align to make any transformational portfolio play work, and sometimes they simply won’t. Plan B is to incorporate a portion of the tornado category into your existing portfolio as a supplement. Take Gen AI, for example. You don’t have to be in the category like Open AI or Anthropic to participate in the new spending. Virtually any enterprise application can benefit from a Gen AI bolt-on to improve the user experience or simplify the administrative one. Prior experiences with adding mobile applications and digital commerce to legacy systems have delivered similarly positive returns. You don’t have to be in the lead, but customers do want to see you are still in the game, and assuming you show up with a working product, they are more than happy to consume it.

That’s what I think. What do you think?

Image Credit: Pexels, Geoffrey Moore

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Re-Framing Your Strategy for the Chaos of 2025

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Re-Framing Your Strategy for the Chaos of 2025

GUEST POST from Geoffrey A. Moore

Spring is in the air, which brings to mind the season’s favorite sport — no, not baseball, strategic planning! Let’s face it, 2025 has been a tough year for most of us (and it’s still early days), with few annual plans surviving first contact with an economy that was not so much sluggish as simply hesitant. With the exception of generative AI’s growing impact, most technology sectors have been more or less trudging along, and that begs the question, what do we think we can do with the rest of 2025? Time to bring out the strategy frameworks, polish up those crystal balls that have been a bit murky of late, and chart our course forward.

This post will kick off a series of blogs about framing strategy, all organized around a meta-model we call the Hierarchy of Powers:

The inspiration for this model came from looking at how investors prioritize their portfolios. The first thing they do is allocate by sector, based primarily on category power, referring both to the growth rate of the category as well as its potential size. Rising tides float all boats, and one of the toughest challenges in business is how to manage a premier franchise when category growth is negative. In conjunction with assessing our current portfolio’s category power, this is also a time to look at adjacent categories, whether as threats or as opportunities, to see if there are any transformative acquisitions that deserve our immediate attention.

Returning to our current set of assets, within each category the next question to answer is, what is our company power within that category? This is largely a factor of market share. The more share a company has of a given category, the more likely the ecosystem of partners that supports the category will focus first on that company’s installed base, adding more value to its offers, as well as to recommend that company’s products first, again because of the added leverage from partner engagement. Marketplaces, in other words, self-organize around category leaders, accelerating the sales and offloading the support costs of the market share leaders.

But what do you do when you don’t have company power? That’s when you turn your attention to market power. Marketplaces destabilize around problematic use cases that the incumbent vendors do not handle well. This creates openings for new entrants, provided they can authentically address the customer’s problems. The key is to focus product management on the whole product (not just what your enterprise supplies, but rather, everything the customer needs to be successful) and to focus your go-to-market engine on the target market segment. This is the playbook that has kept Crossing the Chasm on entrepreneur’s book lists some thirty years in, but it is a different matter to execute it in a large enterprise where sales and marketing are organized for global coverage, not rifle-shot initiatives. Nonetheless, when properly executed, it is the most reliable play in all of high-tech market development.

If market power is key to taking market share, offer power is key to maintaining it, both in high-growth categories as well as mature ones. Offer power is a function of three disciplines—differentiation to create customer preference, neutralization to catch up to and reduce a competitor’s differentiation, and optimization to eliminate non-value-adding costs. Anything that does not contribute materially to one of these three outcomes is waste.

Finally, execution power is the ability to take advantage of one’s inertial momentum rather than having it take advantage of you. Here the discipline of zone management has proved particularly valuable to enterprises who are seeking to balance investment in their existing lines of business, typically in mature categories, with forays into new categories that promise higher growth.

In upcoming blog posts I am going to dive deeper into each of the five powers outlined above to share specific frameworks that clarify what decisions need to be made during the strategic planning process and what principles can best guide them. In the meantime, there are still three more quarters in 2025 to make, and we all must do our best to make the most of it.

That’s what I think. What do you think?

Image Credit: Pexels, Geoffrey Moore

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