Day: March 22, 2021

5.03 Customer Segmentation

Customer Segmentation — 5.03

Markus Westerlund

Strategy is my passion! I love to simplify complex work and finally squeeze the strategy on one single page, the Strategy 1Pager.

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Today’s topic is customer segmentation. Do you know what the definition of work is? Work is about removing people’s troubles and worries. These people are called customers. Customers’ have different types of worries, because everyone is an individual. It would be easy if we could sell the same product to everyone! Then we could specialize only in one service or product. What could we do to get efficiency into our work? The answer, of course, is by segmenting customers into groups!

I have been doing segmentation work ever since 1996. For 11 years it was a full-time job for me, and now I create strategies. The goal of almost every strategy is to improve the organization’s segmentation and customer experience. I have a great desire to simplify complexity, and over the years it has become my passion. Now I will explain how customer segmentation can be simplified and how it can even be made into an art.

Why segment customers?

Precision offerings. Why should customers be segmented? They need to be given an offer that tackles their need specifically. When the offer strikes the customer’s worry and need exactly, things run smoothly. I use the word worry, because the need is the answer. The customer has a worry, and we satisfy the need by providing a solution. The customer is happy that we got rid of their worry, and therefore they thank us by paying us.

More sales. Another dimension is, of course, our self-interest. We want more sales, because that’s the way our company grows. It is also the way we are able to pay everyone’s salaries. The more customers we are able to help, the better we have carried out our purpose. It isn’t necessarily only about sharing dividends to the shareholders. It’s about growing sales, helping customers, which is a fine societal task – You could even say our duty.

Better profitability. When we finally know how to compose offerings that tackle the customer’s need with precision, we can then make the whole process more fluent and profitable for ourselves. This creates a win-win situation between us and the customer. We both benefit a great deal from it.

Value for us. The customer base is often visualized as a pyramid. I have for many years simplified this work. Customers can be divided into groups according to their importance: Gold-Silver-Bronze, for example. To us, certain customers are Gold-customers, Silver-customers, or Bronze-customers. The trick is to divide the customers into these groups, based on how valuable they are to us in a monetary sense.

During a flight safety demonstration, it is mentioned that the oxygen mask should be put on yourself before helping others. If we don’t stay alive, we’re not capable of helping others. That’s why our self-interest comes first.

Customer needs. Another way to divide customers according to a customer dimension, in which customers are segmented based to their needs, which I earlier described as worries. This creates a segmentation model. I’ve learned not to make things too complicated!

Back in the day, we made a mistake by making the segments too detailed and intelligent in appearance. Because of this our customers weren’t able to implement the model. In the previous pyramid image, we divide it into six segments. For some companies even a six-way split can be a lot! A division by two vertical segments are usually a pretty good, sometimes three works as well. The next image has examples of various ways a company can segment its pyramid.

Some companies may only have one segment, where every customer has the same needs. In addition, there are three value categories, and several varieties of them. Segmentation is often done intuitively, and after a moment of thinking the solution turns out to be completely different. It isn’t easy-peasy.

One option is to have one Gold-customer, all the rest being Bronze-customers. It’s also possible to have no Gold-customers. Services and offerings are usually tailored to them. Usually, consumer businesses only have Bronze-customers. For instance, McDonalds only has one type of customers. They have different products, but they deliver the same way to everyone.

After 10 years of doing this for a living, I decided to buy a marketing automation software. It taught me not to segment companies, but individuals. My head just about exploded!

Could it be, that even in B2B customer relationships selling should be aimed at individuals, persons, avatars? That’s human-to-human business. Suddenly, segmenting became even more interesting, but also more challenging. Which model would bring the most success?

Drawing the above image took me 10 years. I often tried to explain this verbally, but I didn’t know how to describe it as an image. Then finally I succeeded! This image shows which products and services we sell to different segments.

There exists a basic model offer, that is grey and can fit for any customer. Then there is a white offer or service, which fits the first segment. The blue module only fits only the second segment, and those customers don’t want the white one.

When we rise to the Silver level, we can begin to tailor our services, because these customers buy more and they pay more. That’s why they can also be offered silver modules. Modules can be sold separately or they can be bundled into an offer. Some want solutions, others want to purchase the modules separately.

Gold level customers can be sold everything, in addition to a tailored gold module.

Care models. On the right side of the image you can find the care models. There are many Bronze-customers, and they buy less. Bronze-customers need to have a well standardized care model, in order to optimize our service and to lower our costs. Nowadays these often are online businesses. As we go up to the Silver level, the care model consist of more tailored services and F2F communication. Gold-customers have a largely custom tailored care model.

Segmentation model. The catch is to do segmentation in two dimensions. Value for us and value for the customer. Products are built so that the customer gets an offer that precisely tackles their situation. Precision products are delivered with a care model, which are differentiated to varying degrees of extent.

As you see, this isn’t the easiest job in the world. I can, however, say that this is the simplest presentation I’m able to produce about this! The most challenging thing is to build the products. That is something that makes me humble, every time!

As many as seven versions are created in segmentation work before the iteration begins to slow down. There are so many options to choose from. If you segment like your competitors, you end up analyzing similar needs and services as them. If we look at this from a differentiation angle, it would be really good if you could group the entire cake according to specific criteria.

Precision offering is the trick. It creates happy customers who buy more, while our company grows and the work becomes more profitable.

Ignite your strategy! Read more.🔥

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Stradigo

Stradigo is a brand owned by Rdigo Oy (Business-ID: 2120844-1).

Learn more from our Imprint.

Rdigo Oy is registered in Finland as a Limited company. We are a strategy consultancy located in the Helsinki capital region.

We’ve been in business since 2007. The company name comes from the latin word Redigo, meaning both ‘I shape’ & ‘I renew’.

Stradigo combines the word strategy with Rdigo.

Strategic Leadership

2.05 Agile Hybrid Organization

Post author By Markus Westerlund
Post date March 22, 2021
3 Comments on 2.05 Agile Hybrid Organization

Agile Hybrid Organization | 2.05

Markus Westerlund

Strategy is my passion! I love to simplify complex work and finally squeeze the strategy on one single page, the Strategy 1Pager.

We held an amazing workshop online, and I’m so excited about it. We modified the strategies from the perspective of an individual and from a customer perspective. We came to a realization that we are building an agile hybrid organization. I need to share this with you.

This image below is our old friend, the hierarchical organization. This style of hierarchy is not doing very well in the present day. Even though it has immensely good features, it also has great weaknesses.

Hierarchichal organization

It’s interesting, that in a hierarchical organization everything needs to be flipped upside down every 3-4 years. A new CEO comes in and decides that things should be done the other way around, with the reason that the other way is “as it should be done”. Then after a while the same pattern repeats.

I have gained experience in this subject. No matter which organization model one creates, in a few years the cons grow bigger and the strenghts are no longer as strong as in the beginning. Because of this the model needs to be changed once again, which the CEO thinks is the biggest innovation. Sometimes the organization is organized into a matrix organisation, at other times the organization gets organized according to functions. It can also be something else, depends on what the CEO wants. That’s everyday life.

Let’s look at why the hierarchical organization is doing poorly.

Hierarchy is slow in action

The main reason why hierarchical organizations are doing poorly is that they are slow organizations. The slowness comes from this. If I have a problem, I need to ask upstairs for permission. The bigger the issue, the higher up the person needs to go in the organization to get permission. If the issue goes flat, the response never comes back down. Decisions aren’t being made. Instead, the issue is left hanging in the air waiting for the next meeting. This causes the customer to suffer, because decisions are not made. Many draw the above model upside-down, so that customers are on top and the management are on the bottom. However, it’s only a semantic change. A hierarchical organization is slow, and doesn’t tend to cope well with the competition, who oftentimes are much faster to react and to decide. A better meeting structure could help.

Less profitable

Another problem with the hierarchical organization is that it’s less profitable. Say what? Exactly. When matters are sustainable, profitability decreases. Lead time isn’t fast enough and the inventory doesn’t move. Surprise, surprise! Higher profitability models exist! Profitability is everyone’s advantage because salaries will continue being paid, customers are number one and the customers are happy. The owners, as well, tend to get more dividends because the company earns more money, which it doesn’t know how to invest properly, so the money is returned to the investors and owners as larger dividends.

Expensive to upkeep

The third problem is that the hierarchical organization is also expensive to upkeep. People need to be controlled and a huge amount of key performance indicators are created. What can’t be measured, doesn’t exist. Reward systems need to be looked at through the indicators, and that’s expensive. As you may guess, controlling costs money. That’s oversight in a nutshell. The more that needs to be measured, the more control measures need to be deployed, and that adds to costs. Simple, right?

Demotivating

The fourth problem is on an emotional level. The hierarchical organization is often demotivating. People don’t like having to wait and not being allowed to do what’s reasonable.

But, a hierarchy has its advantages.

Clear

First of all, it’s really clear and people desire clarity! People know exactly who’s where and who’s in charge of what.

Good in crisis

Hierarchy is fantastic in a crisis situation. You give orders, and that’s that. That’s pretty amazing. This ability can’t be lost! If it’s lost, we lose a lot.

Measure of success

To many individuals, hierarchy is also the measure of success. If I go high up in the hierarchy, it’s pretty motivating, almost like winning an Olympic medal.

Teams discuss and decide

Another organizational extremity is not to have a hierarchy at all. Instead, a team organization is created, where people are completely self-managing. This has already been in use since the 1950s. It works! However, it needs common ground rules, a Game Book, so that things aren’t going all over the place.

Quite many are scared to switch into a complete self-managing model. The word self-managing is in itself pretty bad. A business owner easily gets scared that people will just start doing whatever they want.

Visions of organization

I found the above image in Perttu Salovaara’s PhD Thesis. He named the image “Visions of organization”. It has two axis, co-operation and leadership. There’s not too much co-operation on the bottom level, only individualism. Co-operation begins in the middle, in teams, and spreads up to the top level.

The leadership axis has three stages. Is leadership completely top-down and lead from the outside? Or, is it involving, or are people given permission to self-manage? Salovaara came up with nine models. It’s a good image because the myriad of possibilities are made clear. It’s not so, that the next step from a total hierarchy is a total self-managing model. There’s so much in between!

At Stradigo, we consider simplification as part of our organizational DNA. I’ve wondered if Salovaara’s MATRIX could be simplified. That’s when the idea of an agile hybrid organization model struck me. What if we built a hybrid, in which hierarchy and team leading are combined?

Agile hybrid organization

Let’s build an agile hybrid organization with self-managing teams. The hierarchical organization stays in the background. That’s when we have a spine and agile teams. Teams are where most of the work is done. Teams come and go, as necessary. The home team, of course, is where one works the most, but in addition to that, there are many other teams one is a part of. They are on top of the hierarchy.

In a world like this, it isn’t important to communicate through the hierarchy. Anyone can speak to whom they like without the manager getting upset. Please, don’t get upset! People must trust themself and their leadership skills in order to not mind this taking place, that is, if their boss chooses to go past you, for example, by talking directly with your subordinates. The decision is made where the best information is.

When I presented this idea at one of my clients, the idea immediately got a round of applause. The agile hybrid organization model is therefore a most natural thing! People said that, yes, this is how it is, this is already how we operate. So, let’s make it formal! Let’s make the organization both clear and agile!

Now quick decisions can be made where the information is. When hierarchy retreats into the background, but doesn’t fade, and people are allowed to do what’s reasonable, a level of autonomy is created that is strongly motivating. Control improves, because the team members control each other, so that the team makes reasonable decisions.

As a young man I used to work at Nokia Electronics. No-one knew in which direction the world was going, as the new area of business was developing rapidly. A “Let all flowers bloom” culture spread throughout the company, yet there was a hierarchy, and it was in the background. It didn’t interfere with practicalities.

Individuals have several roles

Because an individual is a member of several teams, they have plenty of different colored t-shirts in their bag. One team has a certain colored shirt, and when a person switches teams, their t-shirt color and role changes. This has been studied around the world. According to one study one person had approximately 6,8 roles. Therefore, we all have many roles, perhaps even seven, like in the image above.

If you’re a CEO of a company, you, as well, have many different roles. One role is active when you’re a member of the board. Another role is when you’re leading your own management team. The third role is when you’re speaking to a customer. The fourth role is when you’re speaking to the investors, and so on. You might also be a part of several customer projects as a great salesperson. All of us have many roles just like this, no matter what role or responsibility we happen to have at any one given time.

This is a question I’ve been asked many times. I always say that there’s no specific person that defines the roles. WHAT?! Let people define the roles for themselves!

A senior HR consultant once told me:

“You know, Markus. Half of Finland’s HR people write standing orders, and the other half tries to implement them.”

It’s completely useless if roles and their definitions are written down somewhere. The definition of work changes constantly! Let people define their roles for themselves, within the appropriate boundaries, of course. The definition creates the lines, but after that, write your own work definitions! Team members write a card on a common digital board, in which the role is shortly described. Everyone gets to pick a sensible and pleasant role for themselves. The team discusses what needs to be added and agrees on it.

Towards the sun by helping customers

One must remember that our job is to help the customers. That’s why the company exists. It’s the big sun and the Purpose. People share in this Purpose and agree that it is important, and they rejoice since they can help.

When a team exists, it must sense and react immediately to the customer’s needs. That’s when the team is doing well.

Everything I’ve told you isn’t new information. This is actually about making documentation transparent. There are millions of self-managing teams all over the world. Since the 1950’s humans have created a new way to organize. Hierarchy and self-management have existed, and there are plenty of companies that work as a hybrid. The transformation, however, can be slightly painful, if a proper Game Book isn’t written.

Ground rules

One must define a handful of central ground rules: For example, in soccer it’s not allowed to kick other players in the legs, and only the goalkeeper can catch the ball with their hands. Some rules are needed, in order for these two organization levels to work well together.

I have facilitated the transformation of a Finnish company into a self-managing model. I suspect that this is among the first transformations in the country, perhaps even the very first. No matter what the truth of the matter is regarding this “firstness”, it is not that common to see these types of transformations in practice. This is quite a new thing after all! What happened after the transformation? This organization’s profit grew with two million euros in their first year post-transformation. We have also created many Gamebooks to tens of organizations.

What kind of rules give us and our customers the WOW feeling? It’s funny that WOW actually stands for Way-Of-Working. New central game rules should be written down in the Gamebook! I always tend to use volunteers for this.

A Gamebook is needed to make all this work out in practice.

Long live the agile hybrid organization!

IGNITE YOUR STRATEGY! Read more.🔥

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Stradigo

Stradigo is a brand owned by Rdigo Oy (Business-ID: 2120844-1).

Learn more from our Imprint.

Rdigo Oy is registered in Finland as a Limited company. We are a strategy consultancy located in the Helsinki capital region.

We’ve been in business since 2007. The company name comes from the latin word Redigo, meaning both ‘I shape’ & ‘I renew’.

Stradigo combines the word strategy with Rdigo.

Strategic Planning

1.13 Assumptions of the Strategy

Post author By Markus Westerlund
Post date March 22, 2021
2 Comments on 1.13 Assumptions of the Strategy

Assumptions of the Strategy — 1.13

Markus Westerlund

Strategy is my passion! I love to simplify complex work and finally squeeze the strategy on one single page, the Strategy 1Pager.

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Today, I’m talking about the assumptions of the strategy. But first, let me begin with a wise quote:

This is a quote from futurologist Kjell A. Nordström, and a fantastic one at that! It means that everything we think about the future is merely assumptions and guesses. A mastermind, who accurately predicts tomorrow’s events, simply doesn’t exist. Probabilities can be calculated, but they are all guesses. I’m beginning to think that this is a very wise quote.

To go forward, we must live at the mercy of assumptions. We make good predictions about the future, but they are nothing more than beliefs. Very interesting.

Strategy is built on top of our current assumptions

Strategy is a journey from point A to point B, and it is built on top of our current assumptions. The point is that no one actually knows what point B is. It will become clear later down the road! If you try to define point B, you might not end up there, because a better waypoint was discovered along the way.

In fact, we are proceeding within a specific sector. A sector is my best metaphor for the strategy. The borders of the sector are defined by the strategy, and people are given the task to find the best direction within the sector. However, at the beginning of the journey the situation often looks like this:

We are in point A, and we define our sector in which we wish to travel. However, we don’t know what point B will be. Point B represents the target we intend to reach. While we travel inside the sector, we constantly encounter various challenges. The people, that work with us inside the business, are tasked with finding the best path forward, while staying inside the sector at the same time. It is a bit like navigating a boat. You constantly sense and respond to changes and find the best course while on the sea. Because of this the staff will be able to reach point B in due course.

Agile strategy

I believe that thinking about the future in this manner lays the groundwork for an agile strategy. I believe agile strategies are more competitive than a carefully planned linear strategy. Linear strategies have an issue. Even if the organization spends a huge amount of time to plan out everything meticulously, including the end point, the strategic plan will end up becoming outdated very quickly as the world moves along. It can even be outdated tomorrow.

So, why invest so much time and money into something that easily becomes outdated? Doesn’t feel like a terribly smart idea, which is why we can circumvent these issues by creating an agile strategy instead. The most dangerous thing an organization could do with a linear plan is that it starts to believe in the plan. If belief is strong, then the organization runs the risk of losing its sensitivity to changes. People may see what is going on, but it is too difficult to adapt because the established plan takes precedence. In a sense, death by bureaucracy.

Assumptions define the quality of strategy

It’s a good idea to clarify the assumption, and also to challenge them. If we have a good assumption, it creates a good strategy.

If we have a bad assumption, it creates a bad strategy. It’s quite simple in the end. The challenge is that assumptions are often invisible, just hanging in the air.

Every community and company has assumptions, but they haven’t been made visible. That’s why we aren’t necessarily aware of what the strategy is being built upon.

Challenge

These assumptions can be about the market, customers, products, etc. I believe that assumptions should be visualized and vigorously challenged. Outdated assumptions are not a good foundation to build on.

I have challenged assumptions for many years through my career. I can say from experience that three of the ten most important assumptions within the organization about the market may be outdated. Before they were competitive, but now something has changed. Assumptions no longer create a competitive advantage for the organization, on the contrary, they have become a burden and they are in fact slowing it down. If business continues as usual, with the actions built on top of these outdated assumptions, the organization loses out!

Technology often enables change to take place and it challenges old beliefs. One must constantly be able to spot when the game changes. That’s why it’s good to find out how technology is able to help you, and to realize which assumptions are outdated and which ones are valid.

Challenge the mantras!

Challenge your mantras! Whether we’re talking about a company or a community, mantras begin to form in practice. We begin to repeat the key beliefs of success. Slowly it becomes dangerous because we begin to believe them ever stronger. “You start to believe your own bullshit”, as someone brilliantly said.

It is often smart to bring in an experienced third party, because they are able to challenge with fresh input and questions. A third party also isn’t part of the inner political game, which always exists in a company.

The appropriate way of challenging could be crucially important if you wish to create a good strategy journey into the future.

Good assumptions lead to a good strategy, and a good strategy is very exciting! It’s great to be involved in executing the purpose, the sun. It’s great to be a part of the winning game. Success is a great motivator.

Ignite your strategy! Read more.🔥

Finding Us On Social Media

Stradigo

Stradigo is a brand owned by Rdigo Oy (Business-ID: 2120844-1).

Learn more from our Imprint.

Rdigo Oy is registered in Finland as a Limited company. We are a strategy consultancy located in the Helsinki capital region.

We’ve been in business since 2007. The company name comes from the latin word Redigo, meaning both ‘I shape’ & ‘I renew’.

Stradigo combines the word strategy with Rdigo.

Strategic Planning

1.12 The Company Purpose

The Company Purpose — 1.12

Markus Westerlund

Strategy is my passion! I love to simplify complex work and finally squeeze the strategy on one single page, the Strategy 1Pager.

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Today I will talk about something really powerful, which will allow your company to take off. I’m talking about the purpose of the company.

First, let me ask you a question. Why does a company exist? What is the point of it? The answer, which you give spontaneously, centers on the core of your culture. There are many ways to answer this question. In my opinion, however, one answer can be better than the other.

Let me rephrase the question. Why do customers buy from us? Is the answer to this question the reason why our company exists?

Another question. Why do people work with us? Is this the point of our existence or is there a greater idea behind the company?

Why have investors invested their money into our business? Is the ultimate reason to earn money for the investors, who have risked their money? Some would say, of course! Others say that it is necessary, because without investments the company would not exist. Correct, people take out their invested capital by selling their ownership, if they think the returns on their investment are not sufficient. Likewise, the investors tend to prefer the company to increase in value over time.

It is also possible to think, that the company exists because all the stakeholders – the owners, the customers and the employees – believe and care deeply about what the company is trying to achieve.

A belief in good!

They can believe, for example, that the business idea can truly make the world into a better place, and create value for themselves, the customers, and the owners at the same time. This way the company also contributes tax revenue for the government, which naturally it likes very much. The government then does with the tax revenue what the bureaucrats and politicians think is necessary. Tax revenue expenditure is a controversial topic, let’s not talk about that beyond this point.

Everything I just mentioned will happen, you only need to make the right strategic choices.

The Purpose

We have a purpose! The purpose is above all other things in importance. If customers feel like they receive a lot from us, then we, the staff, enjoy our success. The customer buys more from us, and the owner of the company sees that money is flowing in like water flows into the faucet from the tap. The invested capital is generating returns!

I must add, that the investor can be a young family that has invested all of their extra little money they have, in us. The investor must, of course, receive something in return for the risk they have taken upon themselves. Charity is something else. It’s not rude to give people compensation as thanks, it’s the decent thing to do. They have taken on risk and invested their financial capital in us, who are working towards a worthy cause, and they are helping us by investing their money into our cause. So, let’s be grateful for this investment and pay the investors dividends as thanks when appropriate, and increase the value of our company for everyone’s sake.

Purpose into a context

I’ll explain how this can be presented as a concept. Everyone in business has encountered the words vision and mission. Both words are controversial and usually people understand them differently. Sometimes people get the word definitions mixed up. Many use the words without a clear shared understanding. This is why we launched a new way of thinking, by combining mission and vision together into a single word. This is when we started to use the word purpose.

I’m talking about the word Purpose. You lead a company with it.

I have shown these two opposite models to twenty customers during a strategy preparation process, and asked, which model they would like to use. The classic mission-vision model, or the simplified purpose concept? Everyone has agreed that The Company Purpose is the winning path forward for them. They have understood that the purpose concept is the winning path to a successful future for their business.

The above equation, that describes the situation, is absolutely solid in its clarity. Purpose equals mission + vision. Let’s dive into this equation more thoroughly.

The Sun model

Let me introduce you to the sun model. This metaphor is something I came up with on my own, but the idea itself comes from Cynthia Montgomery, a Harvard Business School professor, who has written the book Strategist. This book mentions something she calls System of Advantage. She uses a steering wheel for visualization, but I realized I can use my own sun symbol, which I have used for years in other situations. This created the Purpose concept. The purpose concept portrays how the company purpose shines onto our daily tasks and how it affects our everyday life.

Our tasks are located between the rays of the sun. The space in between are practically speaking various sectors. Each sector can be labeled as things like customers, products, services, sales, pricing, logistics, finance etc. Everything is there.

Purpose Concept - How our purpose shines on our operation

The company purpose has to be clearly visible inside the different tasks. Implementation can take place on different scales, which means some tasks have come further in adapting The Company Purpose. Some tasks haven’t come as far as the others.

If this is our Purpose now, what is like in the future?

In the future the sunbeams will shine stronger and reach further. Our “vision” is to complete the process in these different tasks inside the sectors. However, if the first sun image is the current situation (which often is referred to as the company mission) and the second picture (visible above) is the “vision”, aren’t we talking about the same thing? The Purpose doesn’t change, it only becomes stronger as the company moves into the future.

Case

Here is a case. I have crystallized this myself, so this isn’t an official slide. It is pretty good nevertheless. Look at the bullet points, and try to recognize what company it is. Start by reading the circle in the center: “Stylish furnishing for the many”. Then proceed to read the text inside the sectors. Customers have small living spaces and appreciate design. Prices match the wallets of many. A restaurant is at the front of the department store. Which company is this?

– IKEA, of course!

Cynthia Montgomery uses IKEA as a case example. IKEA has, as a business, created an unbeatable concept that has a long-term competitive advantage, a Sustainable Competitive Advantage. Any furniture company is able to copy any of these bullets, which I call gold grains. Any competitor can try to imitate any single golden grain, like the restaurant concept, but will the competitor be able to perfectly imitate every single golden grain that IKEA has? Practically speaking no, that’s impossible.

The whole IKEA concept is deeply embedded inside the company culture, that it’s impossible to imitate effectively.

Also, Ingvar Kamprad created a foundation, which owns IKEA. The fact that IKEA is owned by the foundation prohibits it from being sold to a third-party. IKEA can’t be bought. If you try to copy them, you are many steps behind by the time you think you are done. Meanwhile IKEA has improved its concept and gone further. What a way to create a competitive advantage by building it on golden grains!

Gold grains

Almost all customers I work with have said, that they are lost with the idea of differentiation. What makes us (the customer) different from the others? I answer by using this example of gold grains: If you’re in the forest looking for a lump of gold, you’ll never find it. The Californian gold rush ended ages ago. The big lumps of gold have already been collected. These days it is not a good idea to try to rely on one thing, one golden grain. Instead, put some effort into finding 30 grains of gold. When you combine them together you end up creating something unique. This will create a sustainable competitive advantage for you.

When you have a Purpose, you learn to adapt it to what you are doing and you create a sustainable competitive advantage from several golden grains. Pretty amazing when you think about it.

This means that you can build a whole strategy with The Company Purpose as a guideline. Once you have a clear purpose concept you can effectively choose what will be the most important focus areas in your strategy.

The Company Vision

When I ask Finnish companies what their visions are, I know their answer already in advance. How come? Everyone’s vision is always the same. They want to be No. 1. When I ask them: Isn’t the number 1 spot a position? They answer, yes. Then I ask them a follow-up question. Who gives you this status? They answer, the customers! Then I ask another follow-up question. What is the great thing you do, that allows you to earn the right to be No. 1? After that question the room usually become eerily quiet. The conclusion is that it is not clear what golden grains make up the company purpose.

I encourage you to build this system, because then you are able to overcome the challenge with differentiation. Recently I introduced this idea to a public company, and both the CEO and the board got really excited about the approach.

This is how the whole concept can be represented. This is good, in the sense, that it can be easily communicated both to the staff and to the customers. If we aren’t excited about our company’s Purpose, how on earth is the same purpose going to be exciting for the customer? Customers realistically only become excited about what we do if we ourselves are excited about what we do.

Dear friend, create the sun model for yourself! Ignite your strategy! That is how you achieve sustainable competitive advantage. Your staff will radiate with joy and excitement and the customers are thankful for it. Your customers will give you’re your well-deserved reward, which means deals and money that flows into your business. This is a win-win situation for everybody involved!

Ignite your strategy! Read more.🔥

Finding Us On Social Media

Stradigo

Stradigo is a brand owned by Rdigo Oy (Business-ID: 2120844-1).

Learn more from our Imprint.

Rdigo Oy is registered in Finland as a Limited company. We are a strategy consultancy located in the Helsinki capital region.

We’ve been in business since 2007. The company name comes from the latin word Redigo, meaning both ‘I shape’ & ‘I renew’.

Stradigo combines the word strategy with Rdigo.

Strategic Leadership

2.06 Multiplying Meeting Efficiency

Post author By Markus Westerlund
Post date March 22, 2021
4 Comments on 2.06 Multiplying Meeting Efficiency

Multiplying Meeting Efficiency — 2.06

Markus Westerlund

Strategy is my passion! I love to simplify complex work and finally squeeze the strategy on one single page, the Strategy 1Pager.

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Today I will reveal a secret. The secret is how a company can multiply its meeting efficiency! Over the years we have achieved this level of efficiency consistently. Let’s look at how it’s done.

Time spent in meetings

It’s pretty dramatic how much time we spend on meetings. Many have the opinion that they will spend a lot of time on meetings in the future as well. But, is there a way to be more efficient during meetings? Of course!

The magic of online meetings

We have, by necessity, discovered the magic of online meetings. We can share videos and talk to each other over the internet. The current situation with the pandemic required us to start using this technology properly in a serious manner. As a result, our societies have made a digital leap. I am truly grateful that this leap has taken place.

At Stradigo, we began holding online meetings back in 2016. Once we had discovered the efficiency benefits that online meetings gave us compared to face-to-face meetings, there was no going back to the traditional way of doing things. That is pretty exciting. Our customers agreed with this. Working online was much more efficient. An infinite stream of meetings very often bogs down employees, so efficiency is highly appreciated. 80-90% of my meetings have been held online already for several years.

So, what is the feature that makes online meetings preferable? A lot of people say that they prefer a physical meeting. Of course, it’s a more humane way to interact. However, if we look at this from a business perspective, the online meetings are far more efficient timewise. The strategy must also be present in everyday operation. If we desire human interaction, there will be plenty of time to socialize outside our meetings because our meetings are fast and efficient. Everybody wins.

Are we distant after all?

Distance is an interesting word. Distant from what? If you’re working from home, the meeting is nearby. It totally depends on which angle you are looking from. Are you looking at it from my point of view or an employee’s point of view? Attending a distance meeting is also about going to the workplace, isn’t it? It is the perspective that strongly defines whether it is distant or nearby.

The only thing that has started to bug me is people’s timidity to switch their videos on during meetings. I’ve heard all the excuses:

“My hair isn’t straight!”

“Technology isn’t working.”

“My kitchen is too messy!”

Ugh! It’s so easy to change one’s background nowadays. Think if we were as rude when arriving at physical meetings. It’s the same as giving everyone else eye masks so that no one can see you. Come on, show yourself!

Screen sharing

Another thing which everyone has learned, is sharing their screen. A PowerPoint is screenshared and everyone’s videos are placed on one side of the browser. There are several software available for this.

Microsoft Teams and Zoom, for instance, have spread quickly. For a long time we used Zoom almost exclusively, because back then it allowed us to have hundreds of participants join quickly into the workshops. These days both Zoom and Teams allows us to sort people into smaller breakout rooms for small-scale group work. In the future, we may have even better software to help us out, but for the time being Microsoft Teams and Zoom have worked great for us.

The fact that one person shares their screen and gives a presentation while others are commenting, is a massive digital leap. Now, I will, however, visualize what the problem is.

The fight for airtime

During a meeting, many people stay quiet because they do not want to compete for airtime. Because of this, many great insights and thoughts remain unheard. There could be many reasons. Some people are shy. Some don’t want to compete for attention with attention magnets, the very talkative people. Each company has extroverts and introverts, and everything in between. Even then, the best thoughts and input can reside with the quiet ones. If we only listen to the ones who are talkative, then the best ideas will not emerge. When everyone gets an equal chance to express themselves, that’s when the efficiency starts to increase.

Common writing surface

“The 5x Magic!” We can use a common digital writing surface, like a whiteboard! Some have claimed that group efficiency increases significantly there is a common writing surface, a common board, that everyone can edit at the same time. When everybody can be active participants at the same time the meeting efficiency will skyrocket. People can be active participants if they can contribute with editing and commenting no matter who happens to be talking at that specific time in the meeting. When this happens, the meeting experiences The 5x Magic!

Here you see the point in online meetings. I have held workshops with over 150 people, who I can divide into 50 breakout rooms at will. Everyone can contribute input at the same time.

I use Trello boards as the common writing surface.

A board for each meeting

Every meeting has its own separate board, on which the full meeting agenda is clearly visible. The agenda proceeds from left to right. If it is the first time I’m facilitating the meeting with the organization, I always begin the meeting with a briefing where I introduce them to the work process. It’s very simple to understand.

The board layout allows everyone to see and follow what is going on. This includes the introduction and the wrap-up of the meeting. I also collect pulse comments regularly during the meeting, which allows me to keep tabs on how everything is going. Pulse comments are a great way to gather feedback, because from them I learn how we did during the meeting and what should be done in the next steps of the process. Each column on the board represents a specific topic that needs to be covered during the meeting. We go through them one by one and we get input from the meeting participant.

At the end, everyone writes their thoughts about the meeting and what they learned from the experience. I have also built a course that teaches how to utilize this working method, and it is suitable for a larger group.

People should be activated in different ways during the meeting according to the topic that is being covered. Personal comments and tasks, including groupwork, can be assigned to the various participants. We can also encourage participants to brainstorm. We can identify the best ideas by asking everyone to give thumbs-up to the input people write on the board. By doing all of these things we can turn online meetings into an absolutely solid way of working together. And on top of this, at the end of the meeting we already have everything documented. In a regular meeting all the documentation work would have to be done separately after the meeting. Quite a time sink! Like… it used to go like this:

No more sticky notes!

The old way is to sit in a conference room and post sticky notes on the wall. The wall becomes colorful, but no-one is able to read the text from afar – let alone see the handwriting! When the meeting ends, someone wraps the brown paper into a roll and after two days you finally get the transcription of the sticky notes. What a waste! So slow.

With a digital writing board everything is taken care of all at once: The notes are immediately transcribed, they can be opened with a click and discussed about. Everyone is able to comment on the note simultaneously. And every comment is on the same platform automatically. This medium enables meeting efficiency to increase.

I often ask people to give one-word feedback to questions, e.g. “How was the strategy meeting today?” By using software we get hundreds of comments compressed into a word cloud, which makes it easy to see all the feedback. Pretty efficient!

Another benefit with holding online meetings is that we polute much less, since people don’t have to travel. No-one has to drive their car to a meeting. We save time by not commuting. Online meetings also tend to begin punctually, and people rarely come in late (at least in Finland).

Include everyone!

Here is an example of our strategy process and its digital boards. We include the staff at the beginning, middle, and end of the process. We hold workshops with volunteers in between these meetings, and every meeting has its own digital board. The agenda is visible, and everything is open for everyone to see. This is full transparency in practice. The boards can also be looked at later if somebody is absent from a meeting or a workshop or wants to make revisions.

If you learn this facilitation method, you can achieve great efficiency! Tasks are completed faster, and the quality of the output increases because the meeting efficiency gives time to iterate during the meeting. This way, we can get so much more done!

Efficient meetings increase productivity and probably result in more money coming into the business down the road. When the business makes money, it can pay out salaries to its employees.

Ignite your strategy by multiplying your meeting efficiency! Read more.🔥

Finding Us On Social Media

Stradigo

Stradigo is a brand owned by Rdigo Oy (Business-ID: 2120844-1).

Learn more from our Imprint.

Rdigo Oy is registered in Finland as a Limited company. We are a strategy consultancy located in the Helsinki capital region.

We’ve been in business since 2007. The company name comes from the latin word Redigo, meaning both ‘I shape’ & ‘I renew’.

Stradigo combines the word strategy with Rdigo.

Customer Strategy

5.02 Digital Sales for Dummies

Post author By Markus Westerlund
Post date March 22, 2021

Digital Sales for Dummies | 5.02

Markus Westerlund

Strategy is my passion! I love to simplify complex work and finally squeeze the strategy on one single page, the Strategy 1Pager.

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For ten years I have put an enormous amount of energy and time into understand digital sales, and what digitalization actually means in communication, marketing and sales. Also, I have invested a great amount of money. Luckily, some of the investments have borne fruit. I have frequently visited the United States and London and found the best people who are at the top of their league in digitalization.

It has been my great ambition to produce this text. Now I will tell you what the point of digital sales is. In my opinion it’s as big as the invention of the telephone. Phones have existed for years, but very few understood their power in the beginning. Let’s look at what digital sales is.

Hot leads

Point number one is that this thing called digital sales exists. Everyone wants hot leads in B2B marketing. Where do the leads come from?

From marketing, of course. The purpose of marketing is to bring hot leads to sales, and then it’s the sales’ job to close the deal.

In the old world the lead could come from trade fairs in the form of a business card. What if the lead isn’t hot, but lukewarm? Or cold? I have the business card, so who cares?

Nurturing

The question is: Can I nurture the customer with scalability? Think, if I could nurture a big group of customers… I’m talking about a massive group, even thousands of people! That would be intense!

This is what it’s all about in digital sales: We can nurture thousands of people on a weekly basis! It’s impossible to personally meet thousands of people, or even phone them all.

Nurture the customer

The above image, in my opinion, is the main point of this whole blog text: Is marketing giving leads? Nowadays the marketing unit has begun to market digitally a lot, but marketing very often measures its success in clicks. LinkedIn, for example, measures in clicks. But is it enough? No, it isn’t. We need a name!

Sales call their customers in order to get a sales meeting. The salesperson gives a spectacular presentation with all the PowerPoint-slides needed, and in the end the customer says:

“Really interesting, but not now. We have so much going on at the moment”.

Sounding familiar? What happens next? A long wait. 3-6 months later the salesperson meets the customer again. What does the customer say?

“Really interesting, but we have other things going on at the moment”.

This pattern goes on, and on, and on. What do we do in between the meetings? Most people wait aggressively by the phone, expecting a phone call or an email from the customer.

Give personal professional knowledge

What if WE sent messages to them? We have their business card; we have the right to send them messages and emails. Messages can be written by the salespeople or by a professional who was present at the meeting. Messages should contain personal professional knowledge, meaning we give the customer our best practices for free -experiences and cases, for example.

Text Messages can also be sent, marketing review reports, for example. The content has to contain substance, this means something that the customer wouldn’t come to think of on their own. A business has a lot of experience from its own field, and that’s the kind of information and know-how that the customer probably isn’t aware of, which makes it both insightful and valuable.

The customer needs to be nurtured with information and understanding, and we shouldn’t be guarding it jealously! This is called digital sales.

The second option is receiving an email address from the marketing department, without even meeting the person. We can, however, begin to nurture this customer personally through digital sales, just like I’m now telling you about all this. Yes, our idea behind these blogs is to give you sneak peeks and valuable insights. We not only want you to get something practical, that you can implement on your own, but to also get a clear idea if you would like to have us help you more in-depth. (Please don’t hesitate to get in touch.)

As I’m writing this blog, I’m at our vacation home in the Porvoo archipelago. We just arrived here with my wife. I have an office here as well, from which I work remotely quite often.

The thing about email addresses is so interesting. If I were a CEO of a big company or working in a company with tens of people, I would give the market one central measure:

“How many email addresses have you collected during this month?”

Clicks are only a waypoint. The culmination of the click is the email address. Did you get the address or not? Immediately when we have the address, we can launch a marketing automation sequence of multiple emails that contain substantial value for the lead. Not spam, valuable substance.

Digital sales is the same thing as the coming of the telephone. Before cell phones we, of course, knew how to sell. We went straight to the customer and knocked on their door and met them. Of course, letters were sent, and advertisements were posted in magazines. But then, cell phones came. Was the salesperson with a phone more efficient than the guy who ran around meeting everyone in person? OF COURSE, because they had the time to call many more people.

Now we can do digital sales! A massive amount of people can be reached with digital sales. Thousand times more than before with just a phone.

A personal professional relationship starts to build up. They start to know you.

First of all, I can create a personal, professional relationship with the customer. When I write this text for you to read, I need to speak to you as an individual. I’m not speaking in a large auditorium; I’m speaking to you as an individual and sharing my best tricks with you. This is how a bond is created between us. On the video it’s even more lively.

You begin to know me, and that is, of course, valuable. That’s when a customer might think:

¨Hey, that guy seems to know a lot and he’s telling me lots of useful things for free. In fact, I might start following this guy, because he seems so nice.”

I have many whom I like and follow quite intensely. Of course, all the time I don’t have the energy to read the messages I’ve received, but very often I look at them.

In 2007 I met Chris Cardell in London, and I have followed him ever since. He sends five messages a week, which I always don’t have the energy to read. I know, however, that in the beginning he gave me so much for free, that I was amazed and didn’t understand how that could’ve been profitable for the business. This is the catch. A person can sense this person genuinely wants to help, and not only sell.

There is always someone who needs help and will buy. But it’s wonderful if one can help businesses to succeed, even if they carried out a plan their own way without asking me for help. That’s the great mission. Of course, money needs to flow in. Someone always needs help in practice, but if someone can improve their business using the info I share, or some other presentation, it’s just wonderful!

There is no need of being scared of the competition. They can copy, but they also have their own beliefs and framework and their own way of doing things. It isn’t so easy to copy, and if someone copies me, I’ll be just around the corner the very next week developing something new, so at least in my business, the competition doesn’t matter because I move faster than the competitors can copy and implement my stuff. By they time they successfully develop and deploy my things, I have already made that same thing obsolete through new innovations.

Automate!

This way I can nurture thousands of people weekly. At the moment I have five thousand CEOs and management leaders on my mailing list, to whom I send a minute-long video every week. This type of short video is hard to do, because it can’t contain any extra word, because one minute is a very short time. I can easily speak 20 minutes or even 2-3 minutes, but compressing everything to a one minute speech is challenging. Every word needs to be examined, in order to make sure there is substance in the video.

I can share my message to thousands of people all at once. My customer’s salesman Jani had found 3500 contacts on LinkedIn, that could potentially be interested in the company’s services. He has met several customers face to face, altogether about 200. What does he do with the remaining 3300? Does he aggressively wait for someone to call? That’s when he realized he can approach them digitally and personally. There’s no way he would have the time to call all three thousand and meet them. Instead, he can nurture them. When the time is right and the customer realizes they need help, that’s when Jani might get a call or an email from a customer – without ever meeting them. Jani is already familiar to the customer.

Document experiences

I recently learned a new thing from my guru: Don’t create new content, document what you did”.

You don’t have to make up content! Just explain what you learned. That’s why I’m trying to become sensitive towards the moment I experience a Heureka-moment. Every week I get a feeling that “this was pretty interesting, I’ve learned something new”. I make a video about what I’ve learned, and send it off every Thursday.

I have been doing this for so long, that I suddenly have an archive of 300 videos! Producing a one-minute video no longer takes that long, because I’ve standardized the process for myself. Before, I was thinking a lot about how to get them done in my everyday life and what kind of technology and lighting I need. Here’s a tip for you: Talk with someone, who has figured things out and can help you get started. That way things go easy. Also, the best thing is that recording a video doesn’t have to cost you any money.

Goal of digital sales: The Meeting

The goal of B2B sales is the meeting. Not the fact that the deal would be done on the internet. These deals are usually very big. Nobody orders anything online with big sums of money, they invite you to a meeting. Then the traditional and physical offer negotiations begin. The goal in B2C is to secure the purchase. Same principles as in B2B apply, but closing is different online.

Traffic

Everyone wants traffic on their webpage. They want the email address. Traffic is wanted and it can either happen fast or slowly. Buying traffic is faster. In other words we advertise our pages to a large group on Facebook or LinkedIn. We get people to click and to download our “magnet”. The price is the email address. The feature of bought traffic is that it fades, people stop following after a while even though they had clicked on the link.

However, the traffic that comes from people who find our webpage on their own or through Google, is the traffic we own, because we have their email addresses. Even though Facebook, LinkedIn and everything would end, we have email. Facebook and LinkedIn can identify the people who have visited their pages. That’s when we can buy advertisements that are published directly to these people on those platforms, not outside of the platforms. However, we don’t get their email addresses if we just rely on advertising on the massive digital platform and ecosystems. We don’t own the traffic, which means we are in trouble if we are banned from using the advertising systems on these platforms.

The blue line in the image above is more valuable in the long run, but it is advisable to use both ways of traffic in the beginning.

Relevant content

Many think email is a disappearing medium and that nobody has time or bothers to read them. Yes, nobody reads a message that isn’t relevant to them! I say, however, that the receiver will most definitely read the message if it’s truly relevant to them.

A magnet has to exist, something that they want for themselves. It could be an e-book or a video series. A CTA (Call to Action) button is placed on the web page stating “Order this”, or “Download here”, for example. The email address is the what the user gives in exchange for the thing that they want.

It’s interesting when I asked a company management how many email addresses they have. They didn’t know! This in my opinion states that nobody has acknowledged that a new telephone has been invented. Otherwise they would’ve known the exact amount. This morning I had 7416 addresses, 5000 of which are in Finland and the remaining ones abroad. I can see these numbers directly in my information dashboard, and I keep track of them often — daily or weekly.

The List

This is an important point: Email addresses form my list. I have many many addresses on my list and together they are a huge asset, capital to our business. The list is important because it consists of current customers as well as prospective customers. If we have a quality list, it raises the valuation of our company.

The list is absolutely essential: You should collect email addresses, and in a way that the person is willing to give it. Then you grow the list systematically. This is the reason I would set the amount of new email addresses as a central KPI (Key Performance Indicator).

Of course people will leave the list when they no longer want to follow – and that’s ok. The more people leave, the better. That’s when the quality of the list grows because you don’t want to spam people who are not interested in the information that you are sending out. I, as well, clean out my list. I intend to send everyone that hasn’t followed or looked at my mails, a message. I will inform them that I will stop sending mails to them, but they can continue the subscription by clicking the button in the email.

Automatic nurturing

Once the message has been written, you don’t need to do it again. The computer takes care of the rest. Some people can think that automation makes the message impersonal. It isn’t impersonal, it’s me writing it! It’s just that the message comes with a delay. That’s how it was during the war when a letter came from the trenches. The letter had been written by a person, it just took time to arrive at its destination. The message has to be written in real time with a personal touch, but the delivery comes with a delay.

Digital sales allows us to take care of personal customer relationship development in a scalable fashion, in practice this means thousands of people. You are giving valuable information for free. The content has to be so solid, something you find difficult to decide if it is a smart choice to hand it out, because it something so valuable. You however are an expert, and you know how hard it is to actually implement your expertise. So even if the other party gets super high-value information, then they may not even have it in them to successfully implement that information. Those who truly value your expertise and value their own time, will realize that the most valuable choice for them is to contract you to help them out personally. Those who don’t value your input, come to the conclusion that they much rather do things by themselves. That is fine, because you will have more time to dedicate to the customers who actually value your input. Everybody wins.

“Wow, I’m getting so much for free, I wonder what I would get if I paid?”

Learn to collect email addresses and how to systematically build the list.

The goal of B2B sales is to get the meeting.

Ignite your strategy! Read more.🔥

Finding Us On Social Media

Stradigo

Stradigo is a brand owned by Rdigo Oy (Business-ID: 2120844-1).

Learn more from our Imprint.

Rdigo Oy is registered in Finland as a Limited company. We are a strategy consultancy located in the Helsinki capital region.

We’ve been in business since 2007. The company name comes from the latin word Redigo, meaning both ‘I shape’ & ‘I renew’.

Stradigo combines the word strategy with Rdigo.

Strategy Implementation

3.02 The Game Book of Actions

Post author By Markus Westerlund
Post date March 22, 2021
2 Comments on 3.02 The Game Book of Actions

The Game Book of Actions — 3.02

Markus Westerlund

Strategy is my passion! I love to simplify complex work and finally squeeze the strategy on one single page, the Strategy 1Pager.

Share this blog

Customer Segmentation — 5.03

Markus Westerlund

Why segment customers?

Recent Posts

Finding Us On Social Media

Stradigo

Agile Hybrid Organization | 2.05

Markus Westerlund

Hierarchichal organization

Hierarchy is slow in action

Less profitable

Expensive to upkeep

Demotivating

Clear

Good in crisis

Measure of success

Teams discuss and decide

Visions of organization

Agile hybrid organization

Individuals have several roles

Towards the sun by helping customers

Ground rules

Recent Posts

Finding Us On Social Media

Stradigo

Assumptions of the Strategy — 1.13

Markus Westerlund

Strategy is built on top of our current assumptions

Agile strategy

Assumptions define the quality of strategy

Challenge

Challenge the mantras!

Recent Posts

Finding Us On Social Media

Stradigo

The Company Purpose — 1.12

Markus Westerlund

A belief in good!

The Purpose

Purpose into a context

The Sun model

Purpose Concept - How our purpose shines on our operation

Case

Gold grains

The Company Vision

Recent Posts

Finding Us On Social Media

Stradigo

Multiplying Meeting Efficiency — 2.06

Markus Westerlund

Time spent in meetings

The magic of online meetings

Are we distant after all?

Screen sharing

The fight for airtime

Common writing surface

A board for each meeting

No more sticky notes!

Include everyone!

Recent Posts

Finding Us On Social Media

Stradigo

Digital Sales for Dummies | 5.02

Markus Westerlund

Hot leads

Nurturing

Nurture the customer

Give personal professional knowledge

A personal professional relationship starts to build up. They start to know you.

Automate!

Document experiences

Goal of digital sales: The Meeting

Traffic

Relevant content

The List

Automatic nurturing

Recent Posts

Finding Us On Social Media

Stradigo

The Game Book of Actions — 3.02