Category Archives: Strategy

Death of the Third Place

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Ventured into my first Starbucks since March. The parking lot was empty, signs on the floor for social distancing, but no customers to distance from. Two baristas behind the counter mentally wrestled with who was to take my order. Waiting, I looked around at the cordoned seating. Is this the death of the Third Place?

Most companies have managed to return to some threshold of spaced out (space between people) operations. Products are moving, services provided. But, what of the customer experience.

Starbucks built their business on the notion of the Third Place and caffeine. I am certain they could have been more efficient had they applied six sigma principles to the order taking and coffee preparation, but what would be the point? Starbucks was all about the Third Place between home and the office where time was NOT of the essence.

What has changed about your customer experience? “Yes, you can come to our office, but please text us when you arrive. Remain in your vehicle until we confirm by text that we are ready for you.”

What happens to the Third Place in your business model?

Agile

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I let others conjecture the path of COVID-19, AND a couple of things are clearer. My focus is not on the pandemic, but your business-model-response to shifting circumstances.

  • The heat of summer in the northern hemisphere will reduce the ability of the virus to survive, creating a seasonal impact. This does not appear to be true.
  • There will be waves of contagion. I don’t know if we are in the second wave or the lingering impact of the first wave. Does it matter? There will be more waves.
  • Hope against hope, there will not be a vaccine until early next year.

Those business models that survive will be those who adapt to reality.

  • Find a market with a business need, set out to solve it.
  • Test the solution to be adequate and understand its value in the market.
  • Determine if the cost of the solution is less than the market value (profit).
  • Determine if the market is large enough (enough profitable transactions) to build a business.
  • Determine the next adaptation required to sustain the business model.

This begs the question of innovation and creativity. What is the agility of your organization?

Time to Re-think is Over

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The time to re-think is over. The time to adapt is now. Actually, never too late to re-think.

  • Employee shuttle buses will have spaced seating, one person for every six seats.
  • Employees will wear face masks, take the stairs and walk one-way around the office.
  • Lunchrooms will have only 25 percent seating capacity.
  • In-office meetings will still be virtual.
  • Larger conferences are canceled through 2021.
  • New budget lines for PPE.
  • Building admittance will see temp screening and self-declared wellness protocols.
  • Flying will be more rigorous than entering a building.
  • Shopping inside a store will see a transformed retail experience.
  • Cash and checks will disappear, in favor of touch-less (NFC) digital transactions.
  • Drive-thru shopping will see re-marked traffic lanes around stores.
  • Restaurants will shift from dining rooms to take-out and delivery.
  • Arena sports will yield to open-space sports.
  • Movie theaters may never re-open, throwing film distribution a curve-ball.

All of these things will impact your business model, the way your customers interact with you, the way team members interact with each other. Intrinsically, we are social animals who want to be together.

These permanent adaptations will seem clumsy at first, but permanent nonetheless. And the clumsiness will become practiced, and those among us who practice will become competent at a new way. And the new way will improve on par with the old way. And, we will wonder what took us so long to get over our resistance.

Death of the Doorknob

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I asked on Wednesday, what is likely never to return. Doorknobs will still have their place in private homes, but building designers may rethink surfaces that have to be continually sanitized. Post COVID-19, what will change about your business model?

  • The way you interface with customers.
  • The channels you use to market to customers.
  • The texture in your customer relationship.
  • Your value promise.
  • The price your customer is willing to pay for your value promise.
  • The resources you need to fulfill your value promise.
  • Your cost structure to pay for those resources.

Death of take-out
“I appreciate you as a customer, and I am glad you ordered a meal in my restaurant. No, you may not come inside, not even to pick up your food. We do not offer take-out, we only offer drive-thru.” Long ago, restaurants realized the disparity between the capacity output of the kitchen and the seating capacity in the dining room. Some current restaurants have dedicated parking spaces for take-out, those will disappear. New restaurant construction will consider ingress to drive-thru lanes to expedite meal throughput. The capacity of the restaurant will now be on the output of the kitchen.

Death of cash
This may also be the death of the swipe or chip credit card. NFC (near field communication) terminals allow touch-less transactions at the checkout counter. The checkout counter will no longer have a person standing behind it.

Death of the cashier
We all hate those self-serve checkout counters. The bar code doesn’t read because it’s frozen over or smudged with dirt. Doesn’t matter. Any transaction not requiring a human (or fewer humans) will be performed by a computer.

Death of the doorknob
Keyless entry, building security will all go touch-less. Your smartphone will gain your access, with a code connected to your identity.

Most of this technology already exists. Post COVID-19, its adoption will be accelerated. Think long and hard about your business model.

These permanent adaptations will seem clumsy at first, but permanent nonetheless. And the clumsiness will become practiced, and those among us who practice will become competent at a new way. And the new way will improve on par with the old way. And, we will wonder what took us so long to get over our resistance.

Clumsy at First

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Last week, I published the following excerpt –

Those permanent adaptations will seem clumsy at first, just not the same, but permanent nonetheless. And the clumsiness will become practiced, and those among us who practice will become competent at a new way. And the new way will improve on par with the old way. And, we will wonder what took us so long to get over our resistance.

Now, a list of questions, from which I would like to get your response.

  • In your business, what have you learned over the past month, that you did not know before?
  • In your business, what changes have you made out of necessity?
  • In the changes that you have made, what might become permanent?
  • How are you practicing those new things, to become competent in those new things?
  • In your business, what is likely never to return?

Post your comments, I am curious. -Tom

Wash Your Hands Again

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After 9-11, the question emerged, how do we get back to work? Sure there was a lot of short term (and important) work in putting our lives (country) back together, but we soon emerged to a new normal. And we had to get back to work.

COVID-19 presents the same problem. While we are in the midst of hand-wringing, wondering what we can do short of washing our hands seven times before lunch, at some point we have to get back to work. There is no basketball, no hockey, no soccer, perhaps a three year old football game on ESPN. At some point we have to get back to work.

And, what does it look like when we get back to work. While we are thinking about washing our hands one more time, could we think about our first moves to the new normal. We have changed our routines. Handshakes become chicken wings to the toe tap to more distance greetings. Some things we have adapted will become permanent.

Those permanent adaptations will seem clumsy at first, just not the same, but permanent nonetheless. And the clumsiness will become practiced, and those among us who practice will become competent at a new way. And the new way will improve on par with the old way. And, we will wonder what took us so long to get over our resistance.

So, what are you thinking about as you wash your hands, again?

Not Just a Picture

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“We have to find a purpose that has us?” Rachel was confused. “I’m not sure I understand. We are trying to do strategic planning for 2020. I get that we have to define our purpose. I know that purpose will drive the rest of the plan. But you make it sound like that purpose has to be some powerful compelling force. We bake bread.”

“Exactly!” I said. “What kind of bread do you bake?”

“Well, we bake all kinds of bread.”

“So, why do you bake bread?”

“I don’t understand.” Rachel’s head was moving from side to side. She wasn’t disagreeing, but she was having difficulty with the question.

“Why do you bake bread?” I repeated.

“Because our customers buy it.”

“And, why do your customers buy it?”

“Well, bread is consumed at almost every meal in some form or another. People eat a lot of bread. It’s a comfort food.” Rachel was trying.

“Why is bread so important to people?”

“It’s just part of life, bread goes with everything. It’s universal. Around the world, all cultures eat bread. When people get together, they break bread. It’s almost a bond between people.”

“And do you bake quality bread?” I asked.

“The best,” Rachel smiled. “Hot out of the oven, warm, soft, drizzle a little honey on it, just the smell of it makes you feel good.”

“Rachel, you are on the right track. Somewhere in what you describe is purpose. Somewhere in there is vision. Somewhere in there is mission.”

“It’s funny you should say that,” she said. “In the hallway is our mission statement, only it’s just a picture, of a steaming loaf of bread emerging from an oven door.”

The First Strategic Question

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“Why and which?” Rachel repeated. Come the first week in January, Rachel had to present her 2020 plan to the rest of her management team.

“How did you approach this plan last year?” I asked.

“I’m not sure, seems like we just got the group together and set some goals for the year.”

“Interesting. And, how did that work out?”

“It’s funny,” Rachel said. Her eyes wandered to the ceiling. “We never really looked at the plan again, until last week when I started thinking about 2020.”

“Did you accomplish any of the things you set out to do?”

“We knocked a couple of things off the list, but I have to tell you, some of the stuff didn’t even matter. It was really kind of vague.”

“So, why did you create the plan?” I asked.

“Because we were supposed to,” Rachel replied.

“So, you never really asked the question –why-?”

“Maybe, you are right, that is the first question.”

What Went Wrong?

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“What do you think is the most difficult, planning or execution?” I asked.

“Planning is no slouch,” Travis replied, “but execution is where things go wrong. We may have a perfect plan, but we don’t have perfect execution.”

“Travis, sometimes I look at all the things a company wants to do, process changes, re-engineering, efficiency programs. They are all good ideas, yet, most fail. Why?”

“Execution?” pondered Travis.

“So, why did the execution fail? I saw the written plans. I attended some of the meetings. I observed the training. I watched the pep rallies. I saw the teamwork posters on the wall. I know incredible amounts of money, resources and energy went in to make it happen. In the end, not much changed. So, what went wrong?”

Travis hesitated, “Execution?”

“I saw team members trying new sequences, working with new equipment, handing off projects in new ways. But in the end, it didn’t stick. A new process would get shortcut. The old way worked faster. The enthusiasm faded into push-back. The word on the floor was, if we stiff arm it long enough, the re-engineering would go away. Morale plummeted. Ultimately, the initiative was abandoned. What stopped the execution?”

Travis wasn’t sure.

“Management focused all of their attention prior to the change. Little or no thought was given to how the new behaviors would be positively reinforced. What gets reinforced gets repeated. What does not get reinforced will stop. Dead in its tracks.”

Want to Build Your Business?

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This is how it starts. In the beginning, the founder has an idea. This could be a hare-brained concept or even a hobby. (Some hobbies should stay hobbies.) But, the founder, not being able to resist, transforms the hobby into a business.

Admittedly, it is a little business, and who is doing all the work? The founder, of course. Is there work left over? There is always work left over.

So, the founder hires the first employees, mostly friends and family, because no one else will work for those paltry wages. And, what do these people do? A little bit of everything. The founder organizes the work around the people, asking what each employee (friend or family member) does well. “What do you do well?”

Indeed, there is some of that work to go around, and around. The work is organized around the people (scarce resources). Is there work left over? There is always work left over.

The strategic focus for this startup organization is all about sales. Without sales, this fragile organization dies. And, in the beginning, these don’t have to be profitable sales, because in the beginning, the founder puts all the expenses on a credit card, line of credit, whatever it takes to get the company off the ground.

This is proof of concept time. Is there a customer out there, anywhere, willing to buy our product or service, at any price. Why would a customer buy? There must be an angle, something unique. Oh, it must also be cheaper.

All of this requires energy and hard work. Success depends on it. The problem is, the just dessert for hard work is – more hard work.