Video Of The Week: Purpose, Mission, Strategy
Last month my colleague Nick Grossman gave a really great talk at The Next Web in Amsterdam. In it, he talks about the importance of purpose, mission, and strategy and how to connect them in your company. And he shares a lot of great examples from our portfolio in his talk.
This is simply great!I know everything thing he is saying.People hire me to tell them this.I felt inspired!Thanks Nick!
We’ve never met so this was a good way to see your enthusiasmIt came throughI’ve already sent it to a subsection of my clients
Thanks – appreciate thatAnd hope it’s helpful!
Last night I was at a talk where one of the speakers pointed out that founders often sell something when customers need something else.https://uploads.disquscdn.c…
I hope he/she attributed it to Michael Porter who wrote that in the 1980’s
Pretty sure it was Ted Levitt, not Porter.
Good lord I just went down that rat hole. Some say it was Frank Watts in 1975. Some say it was Ted Levitt, I remember Michael Porter.https://en.wikipedia.org/wi…In any case Twain Twain is right it is that makes the U.S. successful.
Re: Solution Selling. (hot buttons)Best example of screwing up in this area I can give is when I was buying (in the 80’s) a high end typesetting machine (Linotronic). Salesman comes in and tells me about the extensive font collection that is the pride of the company among other things. I tell him a few times ‘don’t care about that tell me about how quickly you will be here when the machine needs service’ (in so many words). Amazingly, even though they had a great service program, he wasn’t listening and failed to address my hot button which I easily lobbed to him. Kept hammering on the font collection.As far as the hole that is a good quip but I am not sure it even applies for a few reasons.1) Mr. Workman buys a good brand for more than the hole that will be created. Just like I buy a new car not just to get from point a to b (it’s in my head for sure and I know that) and you drive that old truck but I assume afford a much nicer brand new one. (Ditto for @jlm and his red car).2) Nobody needs a hole they need whatever the reason for the hole is. Others have said this I am sure because it’s so obvious. But that does not reduce down to a cute simplistic phrase no matter who the author is.I walked into my stepdaughters room the other day and she was taking apart a lens from a $500 Sony camera that her friend had dropped on the floor. Friend had dropped the lens. So now she was watching a youtube video on how to disassemble a lens. She had asked me the day before if I knew where the micro screwdriver set was. But that is not the story. The story is I got all excited and said ‘wow I have a million things at work I can bring home that you can take apart’. She said ‘why? I am just taking this apart because I need to fix it’. No camelot I was really sad that she didn’t take me up on that.
I think I have two pivotal moments in my childhood. One was the “fix it shop” in Kindergarten. We had a handyman come in twice a week and we would bring in broken items and we would take them apart and see how they worked. (There was no fixing)
A reason US tech sector’s been so successful is that technical innovation and execution have been hand-in-glove with business model knowhow.
Could not agree more. But I am going to go a step further.It’s because great companies do not view the tech team as the “hired help, geeks, minorities and worse”Also the tech team cannot view the sales/marketing people as “idiots and worth nothing, thinking my product could sell itself”I watch this, it is the easiest way to see what is going to happen.It’s my second principle right after hiring the best people. Orchestrate. The brass section is nice but if they overwhelm the strings the orchestra sucks.I conduct.We accept and celebrate differences. I had a guy tell me Friday he was going to some event where people dress up as video game characters and “wrestle” (it’s fake) like Pokemon versus Donkey Kong. He had a shirt on. Oh, we laughed and laughed, but our resident wildlife photographer who carries a five figure camera at all times was happy to understand and he is happy to share her happiness at a great picture she took.The final point which cannot be stressed enough is a culture to be able to tell your superior she is wrong. If somebody doesn’t tell me I’m stupid and wrong once a week then all I have is group think.
I conduct too. Inclusion and enabling my teams to achieve their potential is super-important. My team of strangers has placed Top 3 in 8 different big hackathons. I’ve been the sole common factor.https://uploads.disquscdn.c… https://uploads.disquscdn.c…https://uploads.disquscdn.c…And my approach to encouraging women in tech is very hands-on rather than “panel of talking heads”. https://uploads.disquscdn.c…In banking, I was a transactions person who could code. That made it easy to draft the Technical Product Roadmap for the build of the e-Intelligence platform and to collab with the Director of Engineering and his devs.
Re holding senior people to account, I did ask a Prof of AI in front of 1500 people at a data science conference if their proclamation, “Computers emulate the human brain and simulate evolution” was right.I noted that computers start from the basis of the mathematical logic functions of the neocortex with language processing and emotions now being bolted on — whereas our human brain evolved from the emotions of the reptilian brain out to the limbic where language understanding happens and finally to the neocortex.So computer intelligence and evolution is actually the inverse and opposite of human brain evolution.He admitted I was right and AI is different from us.
Ted Levitt quoted Leo McGinneva who said “Last year one million quarter-inch drill bits were sold — not because people wanted quarter-inch drill bits but because they wanted quarter-inch holes.” This quote first appeared in “The Marketing Mode: Pathways to Corporate Growth” in 1969.This quote is commonly mis-attributed to Levitt, but Levitt is the one who popularized it, not the one who said it. He used a slightly different version of this quote in his 1983 paper (later a book) “The Marketing Imagination”. McGinneva was a marketing adman.Regardless, it is a simplification. The reason we buy anything is because we have a desired outcome (in current parlance, a job to be done), and as @le_on_avc:disqus points out below, success is measured by how well this outcome is achieved, not by the partial result of a hole (i.e. why did you need a hole?) The aphorism and visual is useful to remember the idea, but in practice it’s important to think about what the customer really wants to achieve, because that is what drives their choices.
what is going on with Numerai?- changing the rules of the game half way through a tournament is a not good thing to be doing.
you are referring to this: https://forum.numer.ai/t/th…I can’t speak for them, but in general it just explains that there are many unknowns in this space, and there will be a lot of experimenting, everywhere
The unknowns on the AI side have to do with the inspectability of hedging algos:* http://www.pewinternet.org/…This is not a new problem …2012 …”At the M.I.T. conference, a panel was asked to cite examples of big failures in Big Data. No one could really think of any. Soon after, though, Roberto Rigobon could barely contain himself as he took to the stage. Mr. Rigobon, a professor at M.I.T.’s Sloan School of Management, said that the financial crisis certainly humbled the data hounds. “Hedge funds failed all over the world,” he said.http://www.nytimes.com/2012…2008: http://www.nytimes.com/2008…On the Ethereum side, issues include:* Quantum Computing* Scalability & security* How future forks would affect data integrity
I want to give 2 up votes. Disqus will not permit it.
Lots of maths, science and economic modeling problems still need to be solved for both AI and blockchain.There’s also something of a paradox, right? Deep Learning is “black box” opaque. Yet a core tenet of blockchain is transparency.
@nickgrossman great job, great points and great video.
.The basics of company building continue to be a mystery proven by the notion that the revelation that Purpose (Vision), Mission, Strategy are linked and essential to success.If a founding group is able to define:Vision,Mission,Strategy,Tactics,Objectives,Values, Culture,Business engine canvas,Business process graphic,Elevator, taxicab, boardroom, on-boarding pitches,Dollar weighted org charts plotting growth,Precise Basis of Employment documents which incorporate objectives,A Performance Appraisal system which focuses on objective attainment, and,A thoughtful comp program which includes salary, benefits, short term bonus incentive comp, long term incentive, and “something special”they can almost not fail to succeed. [There are three more I could add, but that’s for the folks who plow through this list first. And you could add a few, but if you accomplish these things, you are a top 0.1% performer.]This, or course, pre-supposes they have a legitimate reason to exist by virtue of inventing something new, disrupting something horrible, curing the world’s pain.In the last week, I have had the great pleasure of working with an Irish entrepreneur (he gets the Irish discount because he’s in Galway and I’m half Irish) and a CEO of a going concern who is crushing it by sheer instinct. Watching them knock this stuff out was so pleasant, I wanted to pay them.When you turn talent loose with a plan you end up with a Manhattan Project kind of performance.It always mystifies me when VCs do not require such “normal” planning from entrepreneurs they fund. Not done in two weeks, but over the first year.It is, literally, like watching people discover sex. They always try to take credit for it. And, no, your generation did not invent sex. Peter Drucker did.Well played, Nick Grossman. Well played, indeed.JLMwww.themusingsofthebigredca…
It always mystifies me when VCs do not require such “normal” planning from entrepreneurs they fund. Not done in two weeks, but over the first year.Do not require because they are not in a position to require negotiation and competition wise. Certainly part of the reason, eh?If you were not married and had a chance to date a supermodel (not my cup of tea but perhaps yours?) what demands would you place on your date?
.That she speak five languages, bear me children, and be named Melania? Or Marla? Or Ivana?OK, I get it that was a trick question and I fell for it.JLMwww.themusingsofthebigredca…
What would I want in her? Young men sit down, listen up:That she (1) continually tells me what she is thinking and feeling, that is, keeps me up to date on knowledge of herself, e.g., she doesn’t cut off communications and keep secrets from me, (2) cares about me in all respects, is on our team, e.g., doesn’t try to manipulate me, exploit me, take advantage of me, use me for her personal outside interests, doesn’t try to engage in some sabotage of me in some bitter competition with me, (3) gives me respect, e.g., not contempt, and (4) responds to me, e.g., doesn’t brush me off, isolate me, hold me in contempt.So, it’s four: Knowledge, caring, respect, and responsiveness.Those four can form a pretty good secret scorecard: Look at other couples and grade them on all four.For any couple that tries to have all four, they are easy enough to have, but you will commonly find lots of really low grades and darned few high ones.Why? First cut, a lot of people have drives, motives, interests, concerns often from various anxieties that conflict with those four.E.g., there are still some strong influences from when in the Great Depression a lot of men were not able to do well taking care of their wives and children. As a result, since then a lot of mothers told their daughters in stark terms never but never have to depend on a man and instead have your own career, don’t get married, if you do get married, don’t have children, etc. Those influences are still with us.In addition to those four, she should very much honor the first part of standard marriage vows, “We gather together to join this man and this woman with the bonds of Holy matrimony”. If she doesn’t want to bond her life to mine, for emotional security, financial security, a good life, e.g., is just a gold digger, someone who just wants to use me so that she can give up her miserable job and watch TV soap operas for the rest of her life, no thanks.She should want to be, in a word, a very central word, PRODUCTIVE, for the sake of both of us and all of our family.She should very much want to join with me in our building a good life together, with love, home, and family. In particular, she should want big times at Thanksgiving, Christmas, New Years, Easter, our wedding anniversary, Mother’s Day, Father’s Day, all the birthdays, parties for every good excuse, e.g., children doing well in academics, athletics, small business, personal interests in art, science, the family business doing well, etc.Then with such times and events, she wants us to accumulate a collection of activities, accomplishments, memories, traditions that we like a lot, don’t want to lose, can’t get anywhere else, and will bond us together.More details will be in Girls 101 for Dummies — Boys. For the above, credit to E. Fromm, The Art of Loving.
This, or course, pre-supposes they have a legitimate reason to exist by virtue of inventing something new, disrupting something horrible, curing the world’s pain. Or, a famous recipe for rabbit stew starts out, “First catch a rabbit.”.A recipe for good original research in applied math starts out, “First find an application.”.Well, for a startup, first find a problem: Want a problem such that the first good or a much better solution will be valuable enough to create a major, new, financially successful business.For the solution, find one that is the first good or much better for that problem.Of course, do want some or all of some more common features — the solution is not just a nice to have but a must have, there are good barriers to entry, high profit margins, e.g., via low cost of delivering the product/service, e.g., not labor intensive, means of user lock in, network effects, economies of scale, proprietary data, etc.And want to avoid a long list of bad features — making people angry, getting into legal trouble, having bad public relations, hurting people, etc.So, the “Purpose”? Build a financially successful business with nothing significantly wrong. Simple.”Mission”? Personally, I don’t give even a weak little hollow hoot. To me, it sounds like a detour.”Strategy”? Just as above — problem and solution with lots of good features and few or no bad features.But Nick’s talk emphasized and explained mission so much that maybe he found some things important about it: E.g., whatever I think as founder, owner, etc. about mission, employees, users/customers, the public, etc. might care a lot about mission. Nick gave some examples.Okay, for my startup:The mission is to let people do much better finding Internet content for the full range of safe for work human interests, e.g., entertainment, good citizenship, people, culture, information, education, skills.In addition, for the employees, the mission is to permit them to do well in a sense of accomplishment in their work, financial security, family formation, and a rich and full life, essentially the usual needs as in, e.g., the Maslow hierarchy.The aid to good citizenship should help governments, their countries, and their citizens.There should be many good secondary effects on economic growth, happiness, etc.Simple.Gee, progress: Yesterday I spent in absurd, nonsense mud wrestling. But I won! One supplier wanted to hold me up. They wanted an increase of14.1%Well, I ended up with a decrease of27.2%of their old price and decrease of36.2%on their new price.
I just completed a week long strategy engagement with a large truck manufacturer. Half the company (manufacturing, IT, Engineering and the back-end) is all about the mechanics and science of making a customized truck. The other half of the company that is customer and dealer facing is all about selling, managing, and retaining relationships with large enterprises that buy fleets of trucks for transportation. The former (engineering and manufacturing) call all the shots in the company.When the company is structured product-out, or inside-out as they are, the delivered customer experience is not intentional or purposeful. It is whatever it turns out to be. When the industry is on the cusp of transformation being catalyzed by autonomous vehicles, TCO measured by in-truck sensors, etc. a product-centric mission/purpose does not quite make the cut and prepare you for the future.This leads to all types of mismatches: You solve more for the process than the customer, you do not train your dealers and ecosystem to ensure a minimum level of expertise, your systems are optimized more for self than customer engagement/delight, you focus on the transaction of selling the truck than the TCO over the life cycle, and on and on…As traditional industries get transformed by technology, it is not good enough to have a mission/purpose around making great products. The larger mission has to be around enabling greater value to customers, tracking and measuring it, and being a trustworthy partner in the process. Technology and the products you sell are a means to that end, and not an end in itself.
.Oil v water.Sell the product we made v give me more capabilities at a lower price.This is why the most successful companies approach sales as a team effort. It is easier to do with soft revenue generators like advertising, but it can be done with a determined effort to integrate both capabilities into the same sales effort.There are times, like aircraft, when the engineering is dominant over sales. Not too many, but some.This is new wine in old bottles.JLMwww.themusingsofthebigredca…
Yes. Nothing is really new here and has occurred all through history.Companies often get too absorbed in the shit they make vs. what it does to who they sell it to. It is not different from what happens in relationships and marriages.
Peterbilt is a great company, I might argue the fact that because they are willing to make a customized truck, Manufacturing, Engineering, and IT are actually bending to the will of sales and marketing.Henry Ford said you could have any color you wanted as long it was black.Autonomous vehicles will happen. When is a question.When they do then all of Peterbilt’s customizations go away. Who the hell cares what it looks like when you don’t have a driver that cares that her truck looks the way it does and is configured how she wants it.That goes to commodity.
Yes, I agree on the point about mass customization being actually a response to customer needs and sales. However.. there is mass customization by general intent and mass customization by design. The former leads to a poor customer experience (difference in what customer wants vs. what is ordered by the sales rep vs. what is built, expected time vs.actual ship date, etc..).Mass customization by design is when you can customize something exactly to what the customer wants, but the thing is so well institutionalized that you understand costs, profitability, what it takes and how long to precise detail.And yes, in the long term, it might all become commoditized to “transporting goods as a service” executed by self driving trucks. However, the largest customers of the trucking industry (Walmart, Target, oil & gas companies, etc.) see transportation as a core part of the value chain. They capex truck purchases and manage them internally. For this to change, the cost profile for outsourcing has to look dramatically better.
I agree completely with your core part of the value chain. The really successful companies do this. They figure out every part of the business that is important to them and they do not outsource it.I’d argue Walmart is an IT and logistics company that has physical locations that sell goods they buy and ship.
Great enthusiasm in your delivery!