| Issue 30 |

Strategy or tactics?

What comes first – strategy or tactics? It’s more accepted that a strategy has to be formulated first, meaning starting from the “top down”. First of all to define which customers we will focus on (niche or mass market?), what will set us apart from others (some added value or low prices?), how we will consistently attain a competitive advantage over the competitors (thanks to technology, branding or exclusive distribution agreements?), what our organizational DNA is (what is our vision, what are our values?), etc. And then, after we have formulated our business and marketing strategy and have written a perennial strategic plan, we can plan our objectives for the upcoming year and develop specific tactics to achieve our goals.

For example, a cellular company formulating a strategy can choose to focus on business customers in Europe (a niche) and offer them prices that can’t be beat (low cost strategy). They will achieve this by using VoIP technology (technological advantage to be attained for example via partnership agreements with Skype), and using the vision of “mobile is cheaper than a land line”. After the strategic plan has been written, different objectives will be determined for the upcoming year. And if, for example, the decision was made that 100,000 subscribers need to be recruited in Germany during the following year, there will now be a need to formulate specific tactics (=plans of action) on how to achieve this goal. For example, to first contact private owners of small organizations in Germany (where they consider each business expense to come out of “their own pockets”), or to develop a calculator that will show potential customers how much they will save if they become the new cellular company’s customers.

However, even though it is acceptable to develop tactics from strategy, the opposite option is also definitely an option! In other words, to identify a winning tactic and adapt a strategy to it. A classic example is Domino’s Pizza, which currently has 8,400 branches worldwide and whose revenues were 5.1 billion dollars in 2006. As Tom Monaghan the founder stated, Dominos grew not thanks to a better pizza, but thanks to the tactical idea that he developed way back in 1965, when Dominos had only 3 branches. The idea was simple: “to arrive at the customer in 30 minutes, guaranteed”. Tom developed a comprehensive strategy that would support his idea. This is why, for example, a very small range of products was offered in order to improve efficiency and speed (2 pizza sizes, only 6 types of toppings, and only one drink – Coca Cola). Also, the distance between two proximal branches was determined by the need to arrive at the customer within 12 minutes. In addition, the baking technologies were refined in order to be able to bake a pizza within only 10 minutes from taking the order. It also turned out that the ultimate customers were hungry college students living in dormitories (and new branches were opened accordingly close to the universities). In other words, Dominos tactics determined their strategy: the customers they should focus on (students), what set them apart (quick pizza deliveries), the technologies to speed up delivery times and entrench the competitive advantage, and the organizational values (expeditiousness, speed, efficiency).

Here are a few more examples of companies, goods and services that started as a first rate tactical idea that generated their growth and led to the development of an entire strategy around it:

1. Little Caesars pizza chain – which always (and only) offers “two pizzas for the price of one.
2. The 7-11 mini market chains – open from 7 a.m. to 11 p.m.
3. FedEx – day-to-day delivery (from anyplace to anyplace).
4. Surf – a laundry detergent with twice the fragrance of other competitors.
5. Google – a search engine that ranks the relevancy of content according to the number of related links.

The conclusion we can draw from all of these examples is that sometimes superb tactics can serve as inspiration for an entire strategy. Therefore, it’s very worth it to have your finger on the pulse, open your eyes and to see what “simple” tactical changes can generate a greater demand among customers. Continuous sales? Longer opening hours? Faster service? Stronger scent? Sorting customer queries? If you found something interesting that changes the standard rules of the game – it may be that you can develop an entire strategy around it. Sometimes, thinking from the “bottom up” can be the key to your success!

• For workshops on Strategy and Marketing: click here (PDF booklet, in Hebrew)
• For articles on strategy and other topics: click here
• Information on strategic consulting: click here

Ideas for innovation in washing machines

The following ideas were developed using various thinking tools, and do not exist at present (to the best of our knowledge):

1. A washing machine with two separate compartments and water systems (to separate whites and colors)..
2. A transparent washing machine (you can see the washing cycle from all angles).
3. A corner washing machine – it looks like an equilateral triangle from above (saves space, and it’s convenient to see what’s happening inside because the angle is diagonal to the triangle and faces the center of the room).
4. A washing machine with a separate compartment for delicate wash (protects it, and lets you remove the wash before the spin cycle).
5. A washing machine with liquid laundry detergent and fabric softener dispensers (convenient – you pour the contents of the bottles in and the correct amount is released into the washing cycle during each wash).
6. A washing machine whose window is also a magnifying glass (you can see an enlarged version of the washing cycle).
7. A washing machine with a built-in and removable basket on top (you always leave the basket on top of the machine anyway).
8. A washing machine whose laundry compartment is also a removable laundry basket (you take everything together to the dryer).

• Articles on Systematic Innovation 
• To learn about Systematic Innovation Workshops: click here
• We will be glad to read your comments and suggestions

Colleague Forum

Do you want to help your employees develop, learn, bond, and help each other but don’t have the time or suitable resources? How do you feel about delegating authority and letting your employees do this on their own through reciprocal learning?

Take a group of brand managers for example. Set a fixed date for them, such as the first Sunday of every month for example, when they can get together for three hours in a brand managers forum. Predefine regular interest topics, similar to those on television programs, but with work-relevant features. For example:

1. The first participant will present a PowerPoint presentation that he developed (for sales purposes, for example), and others will give him feedback
2. The second participant will recruit the other participants’ help in gathering ideas for creative public relations for his brand.
3. The third participant will present a new advertising campaign and collect feedback and suggestions for improvement from his colleagues.
4. The fourth participant will review a professional book that he read.
5. The fifth participant will lead a brainstorming session to raise ideas for innovations in his product.
6. All the participants will raise managerial problems they have encountered and receive suggestions for solutions from their colleagues.

The participants should be given enough time to prepare the part they are responsible for. During the forum it is important to stick to a set time for each “topic”, say 30 minutes. Tasks should be exchanged at the end of each colleague forum, so that each participant will be responsible for a different “topic” during the next forum. This should be recorded on a suitable form that will be handed out to all the participants at the end of the forum. One of the participants (for example, the sixth participant) should also be responsible for summarizing what was discussed during the forum, and to distribute it to the other participants.

A colleague forum not only helps in refining the level of employee professionalism, but also unites them as a team: each participant is more exposed to his colleagues’ activities (for example, he becomes familiar with the brands they are responsible for), and practices helping them and being helped by them on a regular basis, and not only during the forum. In addition, since everyone learns about the other participants’ activities, they can cover for each other and fill each other’s place (if a colleague is on vacation or has left) quite easily.

We can help you set up these types of forums, and attend the first few meetings. We can even instruct a preliminary course that will give participants the tools and methods in the areas they will be discussing in the forums. For example, a Brand Management Creativity course where the participants learn, among other things, tools to systematically develop ideas for innovation, communication awareness, and advertising. For more information, contact us. 
 

• For information about Brand Management Creativity courses - click here    (Page 23 in PDF booklet, in Hebrew).