Category Archives: Strategy

Take Your Company to the Next Level – Process Platform

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The roles and levels of work that you need in your company depend on your business model sitting on your business platform.

  • S-V – Industry platform, where our enterprise competes using industry standard practices.
  • S-IV – Market platform, where our multiple systems integrate with market systems.
  • S-III – Single serial system platform, where we see the introduction of warranties as a competitive edge.
  • S-II – Process implementation platform (of someone else’s system, like a franchisee).
  • S-I – Product or service platform, where it’s all about the product.

Yesterday, we looked at a product or service platform. When it’s all about the product, how many roles and how many people do you need? For Bob’s Burgers, all you need is Bob. Can you make money on this platform? Yes. Just not very much. The product or service platform will always struggle with revenue.

In fact, as a competitor, how can you beat Bob? Assuming Bob has the best burger going, how do you beat Bob? You get more trucks than Bob. Actually, Bob read my column before today, he is already going there. In this video, Bob moves from a product platform to a process platform. It is no longer about the burger, now, it’s all about the number of trucks. More trucks, more revenue. But, the video also shows more trucks, more overheard. Where the product platform struggles with revenue, the process platform struggles with profitability.
Bob’s Trucks

Everyone always says, “I want to take my company to the next level.”

Most have no clue. Business platforms help you understand your business model, where it succeeds, its problems and what the next level looks like. (Yes, I have a 3-hour in-person program on business platforms.)

Next, the system platform.

Product Platform

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From the Ask Tom mailbag –

Question:
You always talk about the five levels of management –

  • S-V – Business Unit President
  • S-IV – Integrator role
  • S-III – Single system manager
  • S-II – Coordinator, supervisor
  • S-I – Technician, production role

But my company is not that big. Do I have to have all these roles?

Response:
It depends. Depends on the size and complexity of your company. The five levels of management correspond to five different business platforms, any of which are perfectly acceptable as a business model. You can make money at any of these.

  • S-V – Industry platform, where our enterprise competes using industry standard practices.
  • S-IV – Market platform, where our multiple systems integrate with market systems.
  • S-III – Single serial system platform, where we see the introduction of warranties as a competitive edge.
  • S-II – Process implementation platform (of someone else’s system, like a franchisee).
  • S-I – Product or service, where it’s all about the product.

And any of these platforms are valid. Today, let’s start with S-I, product or service platform, where it’s all about the product. How many roles do you need?
Bob’s Burgers

The Long Game

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I feel like we are in the dog days of summer. I was waiting for an inflection point. I thought when the NBA took the court, we would see a surge in excitement and enthusiasm. But ratings are down. I thought MLB would take the field and inspire some positive energy, but it appears the World Series (if we even get there) might be won by the team who has the least COVID contagion among their players. Back-to-school even looks like a mixed bag with local decisions prevailing between classroom, online and hybrid.

The stimulus delayed the inevitable contraction, but, I sense a walk-in-place, waiting for some break. Even a vaccine, emerging from clinical trials may not spell a demarcation toward certainty.

We all wait for something to happen. Panic reaction is over. Measured response is slowly working. We identified things we could control and focused our attention there. But, what to do next?

What will be your strategy? What will you base your strategy on? How wide is your range of what-ifs? If your what-ifs turn out to be wrong, how agile is your ability to pivot? When circumstances shift, how quickly do you recognize the move?

I know things in front of your face have your attention. But, what of the long game?

The Conceptual Game

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“So, if you understand timespan as the metric for thinking about the bigger picture, if it is only a matter of context, how well do you understand the bigger picture for your company? You said you may not be able to articulate it, you just know that it’s there.”

“I think the bigger picture requires some translation,” Andrew replied. “I think, when you push beyond 3-4 years in the future, things become fuzzy. My CEO says she doesn’t believe in five year planning, waste of time.”

“Can I substitute a word for you. Can I substitute the word fuzzy with the word conceptual?” I asked.

Andrew repeated. “When you push beyond 3-4 years in the future, things become more conceptual.”

“And your CEO’s observation related to five year planning? Five year tactical planning is a waste of time, but what about five year conceptual planning.”

Andrew looked to the left, then up, as if something were written on the ceiling. “I remember buying a Zune MP3 player, you know, the one that Microsoft built. I thought it was cool. I thought it was the wave of the future. But, Microsoft was playing a tactical game. They thought they were building an MP3 player, and Zune was a market failure. But, Apple was playing the conceptual game. They weren’t building an MP3 player, they changed the music industry.”

React vs Respond

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Most of us are good at reacting. The pandemic required it. And, we were good at it. We figured out fast what was necessary. What will stick? It is no longer enough to react to circumstances, we now have to respond.

Think carefully about your business and the accommodations you have made. Fingers crossed, we had hoped to relax back to January, but reality is clearer now. It is easy to find the trends. Which are impacting your business model?

Technology, geography, sensory substitutes, communication channels, I am curious to hear your stories. Most interested in hearing about the opportunities.

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