{PODCAST} In-Ear Insights: Business Strategy

In this episode of In-Ear Insights, Katie and Chris talk about business strategy. From popular frameworks like SWOT analysis to concepts like Simon Sinek’s Start With Why, as well as the Trust Insights 5P Framework, learn how to approach business strategy and distill down the massive concept into actions you could take.

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{PODCAST} In-Ear Insights: Business Strategy

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Christopher Penn 0:17

In this week’s in your insights, we are talking business strategy, which is admittedly a really, really big umbrella term.

And so can you want to start off by saying, when you’re thinking about business strategy and implementing it, or developing business strategy? Where do you start? Like, how do you frame this concept of business strategy in your head?

Katie Robbert 0:43

You know, it really, it varies from business to business.

And I think that that’s one of the keys to start with, is that your business strategy is not going to look the same as anyone elses.

Because it needs to be unique to your business.

And so when I think business strategy, you know, I think about the growth plan, I think, you know, how are we going to, basically, how are we going to get through the year and continue to have positive outcomes on all of the metrics that we’re tracking? And so that’s the way that I think about our business strategy.

You know, it’s the financials, it’s the, you know, digital footprint, it’s the number of customers, and it’s sort of retention of all the things.

So those are the factors that I usually start with in terms of our overall business strategy.

And like I said, it’s, you know, our general, very generalized strategy is growth apps, but that covers growth across all of those things that I mentioned.

So growth across the digital footprint, growth across the customer base growth across the financials.

So those are the things that I tend to look at for us if we were a different kind of business that might be different.

What do you think of? Well, with business strategy, Chris,

Christopher Penn 2:02

typically, I will revert to, especially when you’re just starting in a new situation, looking at the the piles of the known best practices, the frameworks, right? So you have the past analysis, Porter’s Five Forces SWOT analysis, the four P’s of marketing, not because those are going to get you guaranteed results, but because they’re good starting points, they’re good ways to make sure that you’re checking off the basics, right? So if you’ve, if you’ve never done a SWOT analysis against a specific competitor, for example, it’s one of those things, that’s a helpful thing to do.

Because it gets people talking and thinking, oh, yeah, actually, that big competitor we’re dealing with is a major problem, or, you know, the four P’s of marketing.

And there are no shortage of people who have written contrary opinions about the usefulness of the four P’s.

But when you’re starting from zero, when you don’t have a business strategy, it’s not the worst place in the world to start, you know, product, price, place and promotion.

What is your product? You know, where do you sell it? How much should you charge for it? How do you get people to become aware of it? And very often? People don’t have that thought out very well.

The other flip side of things like voice of the customer, right, as a as a standard business strategy, how do you currently listen to your customer? Anytime that we’re talking to customers about marketing data, and marketing analytics, we certainly see.

Not enough focus on the voice of the customer, or the focus that they have is a little thin, it’s, you know, it’s only focuses on maybe one or two of the 11 different areas that that we recommend for focusing on voice of the customer.

So when you’re talking business strategy, it’s Can you broadly identify what’s wrong with the business? And then can you find existing strategic frameworks to kind of, if not patch the holes? At least get people going? Oh, that that? Yeah.

That’s We completely forgot ourselves.

Katie Robbert 4:00

Mm hmm.

Well, you know, it’s it’s interesting that you’re talking about the frameworks because it does apply to the overall business, but then you just ended with the sales strategy.

And so I would imagine that you would need to apply the frameworks to every different discipline within your company.

So your marketing discipline gets, you know, a SWOT analysis, your sales, discipline gets a SWOT analysis, because it’s going to look different.

You can sort of do the overarching, but then you need to drill down farther, as you’re thinking through like what’s working what’s not, because what works for sales won’t necessarily work for your engineering team, for example, and what they need to focus on what that team needs to focus on in terms of competitors and innovations is different from what your sales team would need to focus on.

So your sales team likely needs to focus on different ways to reach the potential customers where they’re at and And what the competitors are saying about, you know, the products and, you know, if they’re like bashing you, or you know, just sort of that general conversation, whereas the engineers might need to focus more on what’s the latest and greatest with the technology piece of it.

So they need to focus more on the platform and the coding.

And so a SWOT analysis for those two different teams is going to look very different.

Christopher Penn 5:27

It is, and even more fundamentally, when you take a step back, you know, looking at the five P’s purpose, platform, people process and performance, that’s something that you need to apply universally across every department because you know, what the challenges that you face in finance are going to look different than HR.

HR is gonna look different than marketing and sales, we obviously have a bias towards marketing and sales, because it’s what we work with the most, but a lot of these strategies, and it’s why we’re talking about business strategy apply at the business level first, and then you have to reverse engineer from that to your specific department and organizational function.

And that’s, that can be tricky, particularly if the people who are in that function don’t see how the overall business strategy maps to what they do on a day to day basis.

And therefore they are less incentivized to, to implement it, and to be champions for it.

In fact, they may even oppose it, you know, if you’re, if you have a growth business strategy, and part of that growth incorporates you’re hiring hundreds of new people to scale your business, and you have existing stakeholders within the business, we’re like, no, no, I like the small family feel this business? You’ve got a strategic mismatch?

Katie Robbert 6:41

Hmm.

Well, and, you know, I think you just hit upon the number one place where things go wrong is communication.

And so the lack there of so, you know, a lot of times when we’re talking business strategy, so, you know, when as we’re recording this, it’s still early January 2022.

And a lot of companies are still working through those strategic plan, so that they may have started last year, or they may have waited till the first to start, you know, and so this is the time of year when companies typically, you know, revisit and reset their strategy.

What I see happen, what I’ve experienced happen more often than not, is that that’s done at an executive level, the strategy is set high level, but then that’s kind of where it ends, you know, what the information that trickles down is, okay, marketing team, here’s the number that you need to hit.

And that’s all the information they get, they don’t get the why they don’t get, you know, any of the rationale, they’re just supposed to magically manifest this goal number that they don’t know where it came from.

They don’t know what the research was, in terms of setting that number.

They don’t know the rationale behind why do we need to hit that number? Why is this particular number important? What about all these numbers over here? And so when doing business strategy, the transparency and communication around why you’re doing what you’re doing is just as important as the strategy itself? Because Chris, to your point, people need to buy in and believe in it, in order to be able to execute it.

I don’t know a single person that is okay with being asked or told to do something without context, if I came to you, and I said, Chris, we need 10 new customers.

Your first question probably like, Why is everything okay with the finances? Or you know, what’s going on? Or can you tell me a little bit more? What kinds of customers like what are we looking for? And I’m like, don’t ask questions, just do it.

I cannot imagine that that would go very well.

And that you would not for a second dig in your heels and be like, Oh, I’m not doing that.

Please tell me more.

Christopher Penn 8:58

Oh, my parents always used to say a survey agreeable child, I would agree to things and just then ignore you completely.

Katie Robbert 9:06

That does not make you agreeable.

Christopher Penn 9:08

It makes you whole agreeable.

He’s very cheerful, like Yeah, sure, I’ll do that.

No, I want as opposed to my brother who just argued well, all the time, but no, in communications part of it.

role is part of it.

And purpose.

You know, the first of the five P’s in the Trust Insights framework is purpose, why are you doing the thing? And that has to be made very clear.

You don’t need to transmit all of the details, the bloody guts of things.

And it does have it’s difficult for some companies to implement because there is a chronic lack of honesty, in business in general, but particularly during the executive suite.

I mean, if you think about it, and you take a step back, let’s take, you know, Amazon, for example, what is the business purpose of Amazon? Well, for the customer side, it’s to get your You’ve cheaper stuff faster, right? It’s functionally what Amazon is all about? Like, how can we get you to buy more stuff, that that’s cheaper for you that we can get to you faster? And on the business side, it’s how can we make a crap ton of money, so that we can send our chairman into space more often.

And therein lies the challenge of communication and transparency.

Because for a company like ours, it’s pretty clear why we’re doing the thing, like we’re doing the thing so that we can, like eat and pay our mortgages and stuff like that, once you get beyond a certain point, then you do need to have that purpose that other people can buy into.

And that’s where a lot of business strategy falls apart.

And it’s and it’s part and parcel of why companies are having such a difficult time hiring and retaining staff right now.

Because they look, the staff look at this and go, what’s in this for me other than a paycheck? Because I can get a paycheck anywhere, literally anywhere.

Now, what’s it Why should I stay here? And because businesses have not been in the habit of communicating purpose? Well, they lose staff, or the conditions at which somebody is working in are just so appalling that like, yeah, literally anything is better.

I was helping a friend over the weekend with their resume, which was a shocking exercise, because I’ve done one in 20 years.

And I was, you know, asking, Well, what, you know, what about this? Why this, what about this, and, and they were like, um, I don’t really care where I work, as long as the paycheck is decent.

And I can be, you know, home to see my family, I’m like, This person has zero buy in, at all, to any of the business strategies that businesses have set, you will get work out of them.

And you’ll probably get the minimum amount of work needed for them to keep their job.

Right, they used to be motivated.

But then they worked at a couple of financial companies and Amazon for a while, but like, none of what I do has a purpose other than to make a few guys wealthy, why should I try harder than I absolutely have to

Katie Robbert 12:05

the purpose, their purpose has changed.

And so the one of the steps in their, in that in the Trust Insights framework is that persona statement.

And so it’s an important exercise, because in that example, I would imagine that as a job seeker, I want to, you know, find a job with a decent paycheck and flexibility so that I can have a better work life balance.

Previously, that statement might have read something like as a job seeker, I want to work for a company I believe in so that I can move their mission and values forward.

And so making sure that that persona statement is clear, will help direct not only the company, but also the each individual person as to their own.

Why? Because and, you know, as we’re talking through going through all the different departments, every department is going to have a different why.

And so I, you know, I personally think it’s okay, to just collect a paycheck, you don’t have to necessarily believe in the work that you’re doing as long as you have a why, for what you doing.

So for some people, they have to have purpose driven work for other people, they just want to click the paycheck so they can go do other things with their life that are more meaningful and purposeful, and both scenarios are perfectly acceptable.

Christopher Penn 13:35

I totally agree.

But when we think about it, in terms of business, strategy, and communication, there has to be enough there for those different kinds of people.

Because yeah, you’re gonna get, okay work from people who are okay with a paycheck and nothing else.

If you want more than that out of them, you’ve got to figure out how to realign work for them.

So that they say, alright, I’m actually going to show up and try today instead, fall asleep on the job or spend all day texting.

And then on the purpose side, that’s really challenging for a lot of companies and their business strategies, because your purpose changes over time.

Right? As companies get bigger, as companies become less personal, just by sheer scale, your purpose can change.

And that can fall out of alignment with with the people who have signed up to work for that purpose.

Now, there are some companies that do that very well, like Patagonia, for example.

And ROI, they have a very clearly stated purpose and the the actions the companies take reflect that purpose in their business strategy, like Patagonia when there’s some stuff going on with the National Parks a couple years ago, and things really stepped up and put a lot of money and reputation on the line saying that we stand for protecting the great outdoors and we will do whatever it takes to support that.

So that the purpose side of things Certainly an easy way to retain staff and to entertain customers to because everyone agrees why you’re working together.

So the real, it’s almost in a way, a precursor to business strategy is figuring out what that purpose is.

And then what kind of people and customers you’re going to acquire, that promotes that, that whatever strategy you choose, because if Yeah, your point, there’s absolutely nothing wrong with a company where, yeah, we make left handed Smoke Shifters, that’s what we do.

There’s no, there’s no high purpose, there’s no, there’s no moral to it.

It’s not immoral.

It’s just like, yeah, we make left hand Smoke Shifters, we want to make them and sell them to people.

And you’re gonna attract people like, yeah, I want to make, I just want to pick paycheck when making Smoke Shifters.

Katie Robbert 15:47

I’m trying to wrack my brain, I don’t know what a smoke shifter is, but you also didn’t need to take the time to explain it to me.

So regardless, I think Patagonia is a really good example.

Because not only are they giving back, and trying to protect land, but they’re also trying to protect their employees.

So I believe, you know, don’t, you know, quote me on this, but I believe they shut down the last week of December to give their employees a break.

And they said, Don’t shop from us, we’ll be there in January, like our employees are tired.

So like, go shop somewhere else, we’ll be back.

And that is the kind of, you know, action, that, you know, it’s the, it’s great for you to write it down on paper, but show me what you can actually do with the purpose.

So, you know, as you’re going through these business strategy exercises of what kind of company are you? What kinds of customers and what kind of employees do you want to have, if you’re not also taking the action to make those things happen? putting it down on paper is useless.

And that’s where you know, their business strategy really, you know, comes alive is how you’re going to make this happen? And what are you going to continue to do to live up to those expectations? And how often are you going to review it as the company grows and evolves?

Christopher Penn 17:12

And what strategic decisions will you make that are in or out of alignment? So for example, at our last working to that a different company, at one point, we were told to take on a client that you personally were uncomfortable with, like, I just don’t want to do business with this kind of thing.

And you didn’t get a choice in the matter, because the company’s purpose was to make a whole lot of money for its accounting for the accountants in the parent company.

That’s really what the purpose was, when we signed on with that company had a very different purpose.

Before acquisition, it was to try and create, you know, a fun sort of cheeky, you know, agency that would sort of define the space.

And then as soon as they were acquired, they became just another content, middle of sorts.

And so from a strategy perspective, we have to step back and go, Okay, well, what happens? If and when our purpose changes, or we see conditions where our purpose can change? How do we change our business strategy? Should we? Or should, you know, particularly you and I, as owners of a company? What conditions would we even set on the sale of a company that would keep it aligned with its purpose?

Katie Robbert 18:22

Well, you know, and that’s our responsibility to revisit, you know, right now, at least annually.

You know, has the purpose of the company changed are the kinds of things that we want to do and the kinds of things that we want said about us? Has that changed? It’s okay, if it changes, we just need to own up to it.

And, you know, live that truth and say, like, yep, originally, we started with, Hey, this is fun.

We want to work for ourselves.

Our purpose now is to make a boatload of money and, you know, so that we can send ourselves to space.

Like, if that’s our reality, we just need to own it.

So that people who want to support that can work with us.

I mean, maybe there’s people who definitely want to send you to space, Chris? Oh, I’m sure there are.

I was gonna say I would, I would imagine that maybe there’s like a clipboard with like a signup sheet.

The same is true for me as well, you know, I’m not innocent in this, people probably want to send me the space to

Christopher Penn 19:22

the questions because they want you to return or not, I was

Katie Robbert 19:25

gonna leave that out of the conversation.

That’s it’s sort of an irrelevant point.

Christopher Penn 19:30

It is.

So, as you dig through all this business strategies, I think one of the things to do in that strategic review is a take time to do that, that exercise of of what is the purpose be, then step through the remainder of the five piece, you know, what, who are the kinds of people that we are trying to hire, who are the types of people we want to work with as customers? Who has has the people that we want as partners? What are what processes do we have in place? Are they working or not? What kinds of not just technologies but even just the way that you do things? If you’re a manufacturing company? What does your physical plant look like, if you are an accounting company, in the in the pandemic era, you’d have your processes changed and has the way you interface with customers change, like my, my tax firm has, you know, drop off and pickup go, you don’t have to sit in an office, you know, your zoom call with your with your tax consultant for for safety reasons.

And then the measurement part is what we’re doing actually working.

And I think that’s a really, I think that’s a really good starting point.

And then you apply specific strategies from your book or framework say, Okay, well, we’re having trouble with our marketing, and we’re having trouble getting beaten by a competitor now.

Okay, great, let’s do a SWOT analysis against that specific competitor and use that tool for what it’s intended for.

As opposed to starting with that.

And then going well, this makes no sense because actually, this competitor that we just is now on is not actually the problem.

Katie Robbert 21:03

So start with the Trust Insights, five p framework is sort of outline the overall strategy, you can sort of do it at the business level, and then by team level, and have the team map up to each other and then apply the other frameworks such as, you know, porters, and the four Ps and SWOT, you know, there’s no shortage, I’m sure half the books in my bookcase, you know, from my grad school days, walk through all of those things, those are tried and true frameworks that will always at least give you some information around, you know, what it is that you’re doing, but it doesn’t end there.

I mean, you need to dig, I would recommend that you dig deeper and use other tools that you have at your disposal.

Such as, you know, if you’re focusing heavily on your digital channels, you know, your attribution models and your SEO analyses and, you know, auditing your content strategy, and making sure that each of those things also serves a purpose that aligns with your overall business purpose.

You know, this is something that we’ve talked about for ourselves, you know, what purpose does social media serve in Trust Insights, and it’s continuing to evolve.

And to be honest, we’re still figuring it out.

We’re experimenting with some new stuff this year.

But social media has never been a high priority for us.

And I don’t know that it ever will be a top priority.

But, you know, the goal for me is to figure out, does it serve any purpose at all? And so, you know, it’s it’s a continual evolution.

And I think with everything, you don’t just set your purpose once you don’t just set your strategy once you reset it and revisit it, it needs to be an agile living breathing thing.

Christopher Penn 22:54

Exactly right.

Strategy is i It’s like gardening, right? You just don’t plant a bunch of seeds and walk away and say, Oh, I’ll come back and in nine months when things grow and there you need to make sure that what you intended to happen is actually happening if it’s not, you make the necessary corrections like oh, look, we have bowls, you know, get out a shotgun and start shooting them or perhaps you

Katie Robbert 23:20

this escalated very quickly,

Christopher Penn 23:22

you and I garden in very different ways.

Very.

The point being, your strategy is not something you just set once and then forget about and hope that it comes true.

Like you know wishing to to a fairy godmother or something.

No, it actually requires a lot of work and it is a living thing.

And sometimes it will change and yeah, then the question is whether or not you work okay with those changes.

Katie Robbert 23:45

Yeah, your strategy is not a Ron Popeil product, it’s not a set it and forget it.

I just aged myself.

Christopher Penn 23:54

A bit.

If you have comments or questions or want to share your own strategies, hop on over to our free slack group go to trust insights.ai/analytics for marketers, where you have over 2200 other colleagues are sharing and answering ask questions all day long.

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Thanks for tuning in.

We’ll talk to you soon.

Take care

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