This is Strategy
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1. Strategy
Rather than a better product or service, what about a better strategy?
The long tail ensures attention is thin; be remarkable; solve someone’s problem, or solve your own problem.
Create with intent: Strategy is deciding what to do today to make tomorrow better. Find a plan, create the conditions for it to spread, within and across the systems that already exist.
The choices we make today to make tomorrow better are our strategy: how we spend our time.
Tactics are what support the strategy. No tactic will save a poor strategy. Have a good strategy, and your tactics just need to be good enough.
Where is the dip?
What does pushing through the dip unlock?
Strategy and decision-making require emotional labour. The emotional labour of coaching is undervalued and overlooked.
Questions worth asking:
- What is the change we seek to make?
- Who do you seek to serve?
- What are our resources?
- What is the genre we work in?
- Who has done something like this before?
- Am I changing anyone’s status?
- Why would anyone volunteer to be part of this work?
- What will they tell their colleagues to show they are ahead of the game?
- Who gains in affiliation, status, and power by joining in?
- Will early support lead to further support later?
2. Understanding the system
If you don’t understand the system you are working in, it’s hard to strategise and change the system.
Structures of a human system:
- Feedback loops
- Boundaries
- Benefits
- Stability
- Information flows
- Roles
- Resilience
- Convenience and efficiency
- Protocols
- Side effects
Human systems are often asymmetric.
What makes systems stick around:
- Sunk costs
- Status quo
- Affiliation
- Interoperability
Culture is the enforcement dynamic of resilient systems, and culture is “the way we do things around here”.
If status and affiliation are on offer, then we’ll stick with the culture.
If the culture is delivering the results, then there is no need to change the system.
What the system makes is probably what it values.
How will the system respond to your actions?
Don’t rage against the machine, work with it instead. Be like water. Use the system like a water wheel. A dam is expensive, but an offshoot of the system, a water wheel, can harness the energy.
Marketplaces: Can you see the flow of the river? Why and how does the marketplace work? Where is the leverage, and the point of difference, and how do you use it to your advantage?
Industrial education: Status conveyed, payment for competency, not practice. Scale, compliance, and authority: very difficult to shift or counter. Most training providers default to this approach despite their words. Status driven. Convenience driven.
3. Status
A question worth asking: What ratchets up status? Being included in the Michelin Guide, for example, a guidebook that measures certain things. If you want in, you pay attention to the things that Michelin points to.
Who are we seeking validation from? Is that in alignment with where we want to go?
4. Networks, nodes and affiliation
Does your work benefit from the network effect?
Does each addition add value or dilute it?
Network effect: think telephone. It works better if we all have one. Who are you connected to, and does it help them that you’re connected?
Adding more one-to-one clients doesn’t make each coaching relationship more valuable. It divides your attention, so it risks diluting them all. Connect those clients to each other, and every new person becomes another peer, another perspective. Now more adds value.
Invites: an invite to a group is either an act of service or an act of curation. It spreads capacity, or it spreads identity.
If an invite supports the group, it’s much more likely to happen. If it might reflect badly on you, the risk may not be worth it.
The test: does bringing someone new add to what the group has, or dilute it?
A trap of the network effect: the pressure to grow a following for its own sake, optimising for reach metrics that don’t convert to the right cohort. Choose your client, choose your future.
Nodes: in systems thinking, nodes are the components, entities or agents within a system, the dots on the map, that interact to produce the system’s behaviour. They can be tangible (people, infrastructure, computers) or abstract (concepts, behaviours), and they act as focal points for flows of information, energy or materials.
- The question worth asking: which nodes in your network, if they were more connected to each other, would create the most value, for them and for you? That’s where your energy compounds.
- The counter-question: which nodes outside your network, if you were connected to them, would create the most value? Who do you need to be connected to?
Path dependency: the network you’re in might feel like a set of options when it’s really a set of constraints you’ve inherited, the result of a series of incidents and choices. Optionality comes from a wide network. In the right network, growth compounds. In the wrong one, more effort only digs you deeper.
Don’t assume the people already around you are the right people.
5. Customers
Customer traction: people show up, stick around, and bring their friends.
- What’s the cost of customer acquisition?
- Retention: What’s the value of customer lifetime?
If your first job is solving their problem, the second job is to give them a story to tell the others.
We wonder:
- Will it work?
- Can I ignore it?
- What is everyone else doing?
- Will I miss out?
Customers dictate:
- Price
- Support and service
- Exclusivity
- Co-creation
- Durability
- The status it brings
- Public persona
- Sustainability
You can train the customer to:
- Keep satisfaction to themselves or share it
- Demand personal service
- Be impatient for the next revision
In short, choose your customer, choose your future. Edit until successful. You can hire and fire customers.
Where do you and your customers want to go?
A race to the bottom? Towards better? Signal status and quality?
Choose your distribution, choose your customer; distribution choices put you in different systems, create different pressures, and result in different rewards.
6. Competition, games and scale
What does the market want?
Choose your competitor, choose your future.
If your competitors are in a race to the bottom, that’s where you are headed.
The question isn’t whether the market is racing to the bottom. It’s whether you’re in a different race entirely.
Games:
- Finite or infinite
- Play to win or play to play
- Abundance or scarcity
Bootstrapped businesses can create magic because they don’t have a landlord.
Scale up, and that’s no longer true.
The only way to effectively scale magic is to ensure the scale is the magic.
Disney has the network effect: people go where everyone else goes.
Scarce asset: buy land; we aren’t going to make any more of it. If we are in a system that recognises when we do well and increases costs accordingly, then it captures our value. Own the scarce asset.
7. Asymmetry, skin in the game and uniqueness
Tragedy of the commons
When the upside is private, and the downside is shared, people predictably act against the group, and against their own long-term interest.
This isn’t random. It’s predictably irrational: bias in disguise.
Solved by skin in the game.
Argument for local action where the feedback is immediate: the neighbours see what you do, and the system corrects itself without top-down intervention.
If behaviour causes pain or loss to the person making the choice, the irrational behaviour goes away. Put the downside back with the decision-maker.
Pay attention to the asymmetry of risk and reward. Who gets the upside? Who carries the downside? Are they the same person?
There is no substitute for uniqueness
Without uniqueness, you can be substituted, and then you’re competing with everyone else.
Find the thing you can’t be substituted for.
The question then becomes: what experience are you creating, and if someone isn’t part of it, what are they missing out on?
Who captures the value in the system?
You might think you are working for yourself, but are you really? It’s possible you could be working for a landlord, a system, or an audience.
If you rent an office or a house, it’s obvious who the landlord is.
A friend of mine is a barber — you can hire one of his chairs. Another friend creates courses and posts them on Udemy. Again, it’s pretty clear who your landlord is.
Are you building something, or renting someone else’s infrastructure?
Systems have feedback loops – some are positive, others negative. We are working with or against the system. How quickly the feedback loops work can be an issue when developing a strategy for change. Pay attention to asymmetry, consequences, and expectations. Manage risk and reward.
Questions worth asking:
- Who captures the upside, and who carries the downside?
- Where is the feedback loop, and how quickly does it reach the person making the choice?
- Where is my skin in the game?
- What experience am I creating, and what does someone miss by not being part of it?
8. Substitution and Social Adhesion
Compete on price, and you don’t have customer loyalty
Get substituted, and you don’t have a brand
Likely there are competitors, and you can be substituted out – find the thing that you can’t be substituted for.
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