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11-29-19

HOW STARBUCKS UNLEASHED THE ACCELERATING POWER OF ALIGNMENT

LinkedIn-Post_Starbucks

Starbucks (NASDAQ: SBUX) has 254,000 employees working in 24,000 retail stores in 70 countries.

Although there are roughly 100,000 permutations of drinks, there is only One Way to make each One.

Coffee has always been my favorite beverage. So, when Starbucks barged on the scene in the early ’90s, I was an early adopter. I have lost count of how many Starbucks I have visited in my life. Countless portions of this book have been written in Starbucks coffee shops around the world.

In the beginning, we all had to learn how to “speak Starbucks.” Does “decaf” come before or after “grande”? Is it “two pump no whip” or “no whip two pump?” What’s the difference between a cappuccino and a Frappuccino®?

Some people never became fluent in Starbucks and are embarrassed to go there.

Most people, however, have developed a basic level of Starbucks ordering competence.

As I am sure you have experienced, they also have a very specific process to ensure that your order is properly communicated to the barista. It is called the “Starbucks® Beverage Calling & Cup Marking System,” and even specifies that a black permanent marker be used to write beverage identification codes on cups.

And of course, they had to teach all their baristas how to make all those drinks.

My sense is that being a Starbucks barista is a lot harder than most people think. They must memorize the Starbucks beverage manual, which contains the exact specifications for every drink. And these specifications  are extremely specific.

Did you know:

  • Beverage temperature is between 150oF and 170oF not including Americanos. (Unless you order it extra hot.)
  • An espresso shot should be 15–19 seconds for Verismo and 18–23 seconds for La San Marco.
  • Blended beverages should be poured into the cup within 10 seconds of blending.

All of this is designed to fulfill The Starbucks Promise: “Your drink should be perfect, every time. If not, let us know and we’ll make it right.”

In order for Starbucks to fulfill their mission and deliver on their brand promise, they had to develop strict corporate standards.

There is only One Way to make a double-tall skim latte—my go-to drink.

Does your company have specific process standards for every product?

Note: This story is an excerpt from my book, Drive One Direction.

11-27-19

HOW FORMULA ONE UNLEASHED THE ACCELERATING POWER OF ALIGNMENT

LinkedIn-Post_F1

The FIA Formula One World Championship (www.formula1.com) is the premier global racing league, with ten teams, twenty drivers, and twenty races worldwide.

This fast-moving sport is governed by One Formula.

Formula One cars are the fastest road course racing cars in the world. (Juan Pablo Montoya owns the record for the fastest top speed—231.523 mph—recorded during the 2005 Italian Grand Prix.)

In addition, Formula One racing is a big business.

In 2017, Formula One generated profits of around $1.8 billion. One half is divided among the Formula One teams in a complex profit-sharing formula, and the other half goes to the Formula One group and shareholders.

The sport is governed by the Fédération Internationale de l'Automobile (FIA), which publishes and enforces the rules of the sport. These rules are known as “the formula,” hence the name of the series.

These detailed regulations govern all aspects of the sport, down to the smallest detail.

The FIA Sporting Regulations document is over 70 pages long and covers things like the points system, the size of logos on the cars, and even the length of the press conference.

The FIA Technical Regulations document is over 100 pages long and provides specific rules and regulations for every aspect of the car, from the exact height of the rear wing, the number of forward gears, and even the exact materials that wheels must be constructed from.

These regulations are strictly enforced, and FIA stewards have the power to impose penalties on a driver and/or team for violating them.

Every company has rules and regulations. As we explained, some have too few, but most have too many.

Formula One creates strategic alignment by requiring every team to abide by One Formula, comprised of over 170 pages of rules and regulations. While that might sound ominous, it is what is required to keep the teams and drivers aligned.

Does your company have too many rules … or too few?

Note: This story is an excerpt from my book, Drive One Direction.

11-26-19

HOW BOGNET UNLEASHED THE ACCELERATING POWER OF ALIGNMENT

LinkedIn-Post_Bognet

Bognet Construction (www.bognet.com) is a rapidly growing commercial general contractor in Washington, D.C.

They unleashed the accelerating power of alignment with The BOGNET Way.

“The BOGNET Way transformed our company,” said Jennifer Bognet, “It captures the essence of who we are, how we work, and why customers should choose us.”

In 2008, the company went through a process to codify their unique business philosophy. This led to the creation of The BOGNET Way, and the results have been very impressive.

First, it allowed Bognet to differentiate their company from their competitors. After all, many general contractors can manage construction, but only One Company does it The BOGNET Way.

Second, it allowed Bognet to optimize their human capital. From recruiting to training to recognition, The BOGNET Way provides accelerating clarity. They use The BOGNET Way to evaluate applicants. They also use The BOGNET Way as their framework for employee recognition.

Below are the six components of The BOGNET Way:

BUILD LONG-TERM RELATIONSHIPS

We strive to build long-term relationships with every member of the project team. Because we are focused on the long-term, these relationships are a critical element of how we work, how we solve problems, and how we communicate.

OPERATE AS ONE TEAM

We work to provide strong leadership to all parties in the job (architect, tenant, construction manager, building owner, subcontractors, etc.) with the goal of working together as one integrated team.

GO THE EXTRA MILE

We are relentless about the details of every project and aggressively follow-up until the job is done. Before every employee leaves for the day, they ask themselves, "Have I done everything possible to anticipate tomorrow's problems today?"

NEVER STOP IMPROVING

We are committed to look for innovative new ways to deliver our projects, applying the latest tools and procedures to improve efficiency. We work hard to stay on top of industry trends and innovations.

ENGINEER WIN-WIN SOLUTIONS

We strive to balance the needs of all parties in the project to find the win-win solution. We look for creative ways to solve challenges, and resolve conflicts so we can deliver exceptional quality.

TAKE OWNERSHIP

At Bognet, we will do whatever it takes to deliver on our promises. The Bognet Executive Team is highly engaged in every project as an executive sponsor.

As you can see, it is an acrostic, which makes it easy for everyone to remember. Even better, it provides a structured way for Bognet to deliver exceptional construction projects for their clients.

Since implementing The BOGNET Way, the company has quintupled in size.

Has your company codified your unique way of doing business?

Note: This story is an excerpt from my book, Drive One Direction.

11-25-19

SPEED READING -- ONE WAY

LinkedIn-Post_OneWayEvery company has corporate standards.

But most have never optimized them.

When something is a corporate standard, it means that you have One—and Only One—Way of doing something. This might be as mundane as having One—and Only One—Way to complete an expense form or as significant as having One—and Only One—Way to perform heart transplants.

Companies make all kinds of things a corporate standard, such as:

  • Their unique way of doing business
  • Mission-critical business processes
  • Policies or rules
  • Dress codes
  • Software applications
  • The exact size and furniture for every office
  • And more

Theoretically, these corporate standards are absolutely, positively, and nonnegotiably the same everywhere in your company.

Everyone must comply with them. No exceptions.

For nearly 16 years, Jenny Wu, an amazing stylist at Bubbles Hair Salon in Reston, Virginia, has cut my hair. Part of Bubbles’ One Way is a dress code: stylists are required to wear black. If a stylist shows up with purple hair, they get commended. It they show up in a purple shirt, they get sent home to change clothes.

While standardization can improve alignment, we advise companies to find the right balance. If nothing is standardized, there is chaos and anarchy. If everything is standardized, your company is a stifling bureaucracy.

We learned of an insurance brokerage that required every employee to write in blue ink. That sounds pretty stifling.

In contrast, UPS trains their drivers to “always” turn right. This standard was based on extensive analysis of traffic and route efficiency. That sounds smart—and the corporate standard was fully embraced.

In this chapter, we will explore how Bognet Construction, Formula One, Starbucks, and ING unleashed the accelerating power of alignment by standardizing their One Way.

NOTE: These stories are excerpted from my book, Drive One Direction.

D1D-Rotating--Amazon

 

11-22-19

HOW HUBSPOT UNLEASHED THE ACCELERATING POWER OF ALIGNMENT

LinkedIn-Post_Hubspot

In 2004, Brian Halligan and Dharmesh Shah met as graduate students at the Massachusetts Institute of Technology (MIT). Two years later, they started HubSpot (NYSE: HUBS). The company now has over 52,000 customers (including SHIFTPOINTS) in more than 100 countries.

HubSpot built an impressive ecosystem of add-on products.

The company started as a software-as-a-service (SAAS) application for marketing. They evolved into an integrated suite that includes customer relationship management (CRM), sales, service, and more.

While only a few vendors offer what HubSpot calls the full “growth stack,” most customers require specialized add-on products to achieve their goals.

Choosing the right add-on products is a mind-numbing task. This segment of the software market is massively crowded. In fact, there are over 6,000 software vendors building specialized marketing, sales, and service products.

In addition, most customers require integrations between HubSpot and their other applications.

To address the problem, HubSpot developed an ecosystem called HubSpot Connect. It includes a portfolio of certified add-on products and application programming interfaces (APIs).

As a result, HubSpot now describes themselves as a “platform company.” They already boast over 200 software integrations with several new partners joining each month.

The HubSpot ecosystem expands the functionality of HubSpot’s core product offerings and helps customers find the add-on solutions that are right for their business.

“Our platform partners offer customers an incredible range of specialized capabilities they can easily add to HubSpot,” said Scott Brinker, HubSpot’s VP of platform ecosystem. “Together, we strive to make it a seamless experience.”

"We're laser-focused on scaling the HubSpot Connect partner program to give our customers all of the tools they need to grow their business," said Brad Coffey, Chief Strategy Officer at HubSpot.

Does your company have One Ecosystem of partners that adds value to your core offering?

NOTE: This story is an excerpt from Dave Ramos' new book, Drive One Direction - How to Unleash the Accelerating Power of Alignment. Available now on Amazon here

D1D-Rotating--Amazon

 

11-21-19

HOW RYOBI UNLEASHED THE ACCELERATING POWER OF ALIGNMENT

LinkedIn-Post_Ryobi

In 1996, RYOBI introduced a cordless drill with an 18V battery system called ONE+.

Now, they sell an integrated portfolio of ONE+ compatible products.

Ryobi Technologies, Inc., is an Anderson, South Carolina-based subsidiary of Techtronic Industries Co. Ltd. (SEHK: 669).

The RYOBI 18V ONE+ System features over 125 unique products, including drills, saws, vacuums, mowers, blowers, trimmers, nailers, grinders, augers, and even floating Bluetooth speakers for your pool.

One component of the RYOBI brand promise is that they will never change the 18V ONE+ battery platform. That means that their newest products and batteries fit the original RYOBI tools and batteries from 1996.

They have used the same system for over twenty years!

The RYOBI ONE+ strategy is a great example of how alignment can start with One Product and expand into a portfolio of fully compatible products.

When a company pledges to never change their system, consumers can buy with confidence.

Their pledge also provides a tremendous differentiator. Once you buy your first RYOBI ONE+ product, the next time you go shopping for tools, RYOBI will be your preferred vendor.

You’ll head over to Home Depot (RYOBI tools and batteries are available exclusively at The Home Depot) and look for their distinctive “hyper green” color. (Yes, all their tools also feature One Color, further reinforcing their integration as One Portfolio.)

When you compare tools, the RYOBI will be the cheapest alternative, since you can buy the new tools without the battery.

I spent most of my career in the technology business. Unfortunately, the technology industry has refused to learn this lesson.

I have a drawer full of obsolete Apple power cords, cables, dongles, and other stuff. Entire landfills have been consumed with Apple’s e-trash alone.

Imagine if Apple had promised consumers that they would never change their iPhone power cord? Imagine if the same power cord worked on your iPhone, your iPod, your iPad, and your MacBook.

Does your company have One component that will never change?

11-20-19

HOW LEGO UNLEASHED THE ACCELERATING POWER OF ALIGNMENT

LinkedIn-Post_Lego

LEGO® (www.lego.com) was founded in 1932 by Ole Kirk Kristiansen. The privately held, family-owned company with headquarters in Billund, Denmark, has over 19,000 employees and operates 132 LEGO brand stores.

They have built an amazing business, One Brick at a time.

My mom recently spent time cleaning and sorting the LEGO bricks my brothers and I played with as kids so she could donate them to a local church. These bricks are almost 60 years old and they are still viable. In fact, all LEGO bricks produced since 1958 are fully compatible with the bricks produced today.

Every year, LEGO sells over 75 billion bricks and other components that they call “elements.” There are more than 3,700 different types of pieces, including bricks, wheels, motors, swords, figures, and more.

These are manufactured with incredible precision—the molds used to produce LEGO elements are accurate to within 0.004 mm—less than the width of a single hair. This accuracy ensures that the bricks will have what LEGO calls “clutch power.”

Since LEGO’s mission is to “inspire and develop the builders of tomorrow,” they often take on special projects to demonstrate the amazing things that can be built with LEGOs.

In 2018, they built a full-scale copy of the $3M Bugatti Chiron sports car out of LEGO bricks! It took over 13,000 man-hours to build and used over 1 million LEGO elements. It has 2,304 LEGO motors and a top speed of 12 MPH (versus 261 MPH for the real one!) The Bugatti factory test driver and multiple Le Mans champion Andy Wallace had the honor of the first drive.

The LEGO Chiron is truly amazing. But let’s just say you only have six two-by-four bricks. There are 915,103,765 ways to combine them! I spent hours as a kid building things, breaking them down, and then using my imagination to build something else.

LEGO is an amazing example of how a standardized product architecture can create alignment. There are a number of key insights that companies should consider applying.

First is backward compatibility. LEGO bricks that were built sixty years ago still interoperate with the current ones.

The second key insight is the power of modularity. People can mix and match LEGO elements to build virtually anything. Many companies struggle to create cross-divisional product portfolios. Creating a common architecture can ensure that products from division 1 interoperate with products from division 2.

It worked for LEGO. The company is worth over $7 billion, making it the world’s most valuable toy brand by far, according to consultancy Brand Finance.

Does your company have One unifying product architecture that keeps everything aligned?

11-19-19

HOW BMW UNLEASHED THE ACCELERATING POWER OF ALIGNMENT

LinkedIn-Post_BMW

In 1933, a fledgling company known as Bayerische Motoren Werke GmbH (DE: BMW) introduced the BMW 303.

It was the first BMW to use the now iconic kidney grille.

For eighty-five years, the kidney grille has been used on all BMW cars with just four exceptions (the 937–1940 BMW 325, the 1955–1962 BMW Isetta, the 1957–1959 BMW 600, and the 1959–1962 BMW 700).

Although the function of the kidney grille was to help cool down the engine, BMW even used it on the electric i3 and the hybrid i8.

The kidney grille is BMW’s signature design element. It provides a unifying—and immediately recognizable—visual identity for all their products. It unifies their dozens of models into One Portfolio.

Having the management discipline to stay with this One Style for eighty-five years is an impressive feat. I’m sure that many BMW designers have complained that having to use the kidney grille on every car was hindering their creativity.

In fact, the original design for the first e21 3-series BMW (produced from 1975–1983) ditched the kidney design in favor of a more GM-like grille with horizontal bars. Thankfully, Bob Lutz, who was executive vice president of sales at BMW North America, convinced the company to redesign the car with the kidney grille.

I believe the decision to stay with the design standard has been an important component of BMW’s success and growth. In 1974, BMW was the 11th largest European brand in the U.S., selling just over 15,000 cars. Now, they sell over 300,000 cars per year.

In my book, Decide One Thing, I also profiled BMW.

In 1975, BMW unveiled “The Ultimate Driving Machine” tagline. (Interestingly, the tagline was also created by Bob Lutz.)

They had the discipline to stay with One Tagline for thirty-five years! But in 2010, they abandoned The Ultimate Driving Machine for the much maligned “Joy” campaign.

In 2012, they brought back The Ultimate Driving Machine. In fact, the ad copy was, “We don’t make sports cars. We don’t make SUVs. We don’t make hybrids. We don’t make luxury sedans. We only make One Thing: The Ultimate Driving Machine.” (That’s why this story was a perfect fit for my Decide One Thing book!)

Then, they switched again and started using “Sheer Driving Pleasure.” In 2013, they started using another new slogan, “Designed for Driving Pleasure.” A review of their websites for various countries around the world revealed that multiple taglines are used, including “The Ultimate Driving Machine.”

Having a single, unifying product design element can be a powerful way to create alignment. For 85 years, BMW has had the discipline to stay with it. I just wish they had the same discipline with their tagline.

Do your products and/or services have One single, unifying design element?

11-18-19

SPEED READING -- ONE PORTFOLIO

LinkedIn-Post_OnePortfolioMost companies sell multiple products and services.

But they often struggle to align them.

One way to create alignment is to literally sell just One Product. As we just learned, Basecamp chose this strategy.

However, most companies offer multiple products and services. Often, these are developed in different divisions. And divisions—by definition—divide.

In the 1970s, Bruce Henderson from the Boston Consulting Group introduced the concept of product portfolio management. His now famous “growth-share matrix” categorized a company’s products as cash cows, stars, question marks, or dogs.

Perhaps your company still uses this management tool to manage your product portfolio.

Once you decide to develop multiple products, your business becomes more complex, and alignment becomes exponentially harder.

In some cases, customers may not have any expectations of product alignment. For example, people do not expect seamless interoperability between Proctor and Gamble’s Tide, Pampers, and Crest products.

However, in most cases, customers will indeed expect some level of alignment. For example:

  • They may expect your products to have a similar look and feel.
  • They may expect your products to work together.
  • They may expect your products to share common components.

This means you will have to develop corporate standards for product alignment and interoperability. These standards are an important component of your corporate core.

In this chapter, we will explore how BMW, LEGO, RYOBI and HubSpot aligned their product portfolio to create both synergies and differentiation.

NOTE: These stories are excerpted from my book, Drive One Direction.

11-16-19

HOW TOMS UNLEASHED THE ACCELERATING POWER OF ALIGNMENT

LinkedIn-Post_Toms

TOMS® (www.toms.com) started as a simple shoe company, but has diversified into eyewear, coffee, and childbirth services.

They changed the world with their One for One® Business Model.

While vacationing in Argentina in 2006, TOMS founder Blake Mycoskie witnessed the hardships faced by children growing up without shoes. Wanting to help, he created TOMS Shoes, a company that would match every pair of shoes purchased with a new pair of shoes for a child in need.

TOMS calls their unique business model “One for One®.”

Since its inception, TOMS has provided over 60 million pairs of shoes.

TOMS Eyewear launched in 2011 and has helped restore sight to over 400,000 people.

In 2014, TOMS expanded into coffee roasting and uses the proceeds to provide a one-week supply of water to a person in need.

At first glance, the business strategy would seem to violate the basic corporate strategy principle of focus.

After all, what do shoes, glasses, and coffee have in common?

All of TOMS’ businesses operate with the same One for One business model. It is their inspiring raison d'être that keeps them aligned.

In 2014, TOMS sold a 50 percent equity stake in the company to Bain Capital. Private equity firms are generally not known for their social consciousness, but here is how Mycoskie described the deal:

“We need a strategic partner who shares our bold vision for the future and can help us realize it. We’re thrilled that Bain Capital is fully aligned with our commitment to One for One, and clearly they have the expertise to help us improve our business and further expand the scale of our mission.”

In fact, the terms of the deal specified that the One for One approach would always be part of the TOMS business model.

Like TOMS, your company has a business model. For TOMS, their unique business model is 100 percent aligned with their unique purpose.

What is your company’s business model?

NOTE: One for One® is a trademark of TOMS shoes.

11-15-19

HOW DOLLAR TREE UNLEASHED THE ACCELERATING POWER OF ALIGNMENT

LinkedIn-Post_DollarTree

Dollar Tree (NASDAQ: DLTR) has 14,300 stores, employs 180,000 people, and generates over $20 billion in revenue.

Dollar Tree unleashed the accelerating power of alignment by focusing on One Price Point.

This is an amazing story. Dollar Tree has built a $20+ billion-dollar company selling products for One Dollar!

Headquartered in Chesapeake, Virginia, Dollar Tree is the largest single-price-point retailer in North America. (Their late founder and CEO, Macon F. Brock Jr., wrote an autobiography about his experience. The title? One Buck at a Time.)

In 2015, the company acquired Family Dollar, solidifying their leadership in the single-price-point category. Of course, integrating—aka aligning—the two companies is a key priority. Some of their key initiatives include:

  • Implementing a shared services model across corporate support functions, including Finance, Human Resources, Information Technology, and Supply Chain
  • Introducing common technology platforms and processes across both brands
  • Improving logistic and supply chain efficiencies

In November 2018, Gary Philbin, Dollar Tree’s President and Chief Executive Officer, described their results, “Dollar Tree delivered its 43rd consecutive quarter of same-store sales growth, with increases in both customer transactions and average ticket. We are pleased with the performance of our newly renovated Family Dollar stores. Additionally, we have begun the important phase of consolidating our store support centers into our Chesapeake campus, which will improve our ability to support Family Dollar stores through enhanced collaboration, communication and teamwork.”

Choosing a price point is an important component of your corporate strategy. Dollar Tree chose a very specific and easily understood One.

Of course, there are many different price points in every market.

On the low end, there is free. On the high end, there is IYHTAYCAI, which stands for “if you have to ask, you can’t afford it.”

The question for you to consider is whether your company should create strategic alignment by choosing One of them.

Your company can be Dollar Tree, or you can be Neiman Marcus. But not both.

Choosing One Price Point worked for Dollar Tree. In the last decade, their revenue has grown fivefold!

Where on the price point continuum does your company compete?

11-14-19

HOW IRIDIUM UNLEASHED THE ACCELERATING POWER OF ALIGNMENT

LinkedIn-Post_Iridium

Iridium® Communications Inc. (NASDAQ: IRDM) is the only satellite communications company that offers truly global voice and data communications coverage.

Iridium creates strategic alignment by focusing on just One Planet.

I was surprised to learn that more than 80 percent of the Earth does not have cellular coverage. Iridium’s strategy is to address that opportunity.

Iridium reinforces their global positioning with a One Word Tagline: Everywhere. And when your tagline is Everywhere, you must back it up.

In January 2019, the company completed their $3B Iridium NEXT project. Iridium NEXT is a network of 66 cross-linked Low-Earth Orbit (LEO) satellites, providing coverage over 100 percent of the earth’s surface. Since these LEO satellites are “only” 476 miles from the Earth, Iridium’s network has a shorter transmission path, stronger signals, and lower latency.

Iridium solutions are ideally suited for applications that demand global coverage. These include the maritime, aviation, government, military, emergency services, and more.

Matt Desch, Iridium’s CEO, said, “Alignment is critical. Our customers know we differentiate by not making compromises on coverage. Even though we serve the whole planet, we only do what we do best. We don’t try to be all things to all people but focus on the unique markets and customers where we have a distinct network advantage.”

Deciding where to compete is one of the most important strategic decisions a company must make.

One way to create alignment is to compete in just One Geography. For your company, that might be one ZIP code or one city. This is an exceptional way to create alignment, since all your energy is intensely focused.

While Iridium was global from day one, most companies follow a more predictable pattern. They expand from local to regional to national to multinational and ultimately become truly global companies.

Clearly, the “One Planet” strategy has worked for Iridium. While their geographic footprint is global, they are intensely focused on their unique customer niche. Over the last decade, their revenues have more than doubled to over $500 million—and profitability has soared.

How do you define your geographic footprint?

11-13-19

HOW BASECAMP UNLEASHED THE ACCELERATING POWER OF ALIGNMENT

LinkedIn-Post-BasecampBasecamp (www.basecamp.com) is a software company that developed a very successful project management application called Basecamp. After Basecamp, they developed a number of additional products including Backpack (an online information management tool), Campfire (an online chat service), and Highrise (a CRM application).

To improve strategic alignment, they pruned their portfolio to focus exclusively on just One Product.

In 2014, Basecamp became a “One Product” company solely focused on Basecamp. They even changed the name of the company from 37signals to Basecamp.

Instead of following the conventional wisdom about growth through diversification, they doubled down on Basecamp. This allowed the company to align their resources—human and financial—on becoming truly world-class at project management.

Here is how Jason Fried, co-founder of Basecamp, described the process, "We keep talking about doing more things, but we haven't entertained the other option: Do fewer. So, I want to pitch something radical. I want us to put all of our efforts into a single product—our main product, Basecamp."

Some might argue with the wisdom of putting “all of your eggs in One Basket,” but the strategy has worked.

Since 2014, the user base of Basecamp has more than doubled.

The privately held company is highly regarded and was recognized by Forbes magazine as one of their “Small Giants 2017: America's Best Small Companies.”

The more products and services your company offers, the harder it is to maintain alignment. When you have multiple product and service lines, resources can get diluted.

Having multiple products and services means multiple development teams. Multiple marketing teams. Multiple sales teams. Multiple pricing models. Multiple customer service and support teams.

In addition, customers naturally expect your multiple products and services to integrate. They want to get volume discounts. They want a consolidated contract.

All of these things create complexity. And the more complex your business becomes, the harder it is to align.

Focusing on One Product unleashed the accelerating power of alignment for Basecamp. This strategy worked for them and perhaps it is right for you.

After all, it is better to have One (Great) Product than dozens of mediocre ones.

Should you consider pruning your portfolio to focus on just One Product?

11-12-19

HOW USAA UNLEASHED THE ACCELERATING POWER OF ALIGNMENT

LinkedIn-Post_USAA

In 1922, 25 Army officers met in San Antonio, Texas, and decided to insure each other's vehicles. Today, the United Services Automobile Association—commonly known as USAA (www.usaa.com)—is a Fortune 500 financial services conglomerate offering banking, investing, and insurance to over 12 million people.

USAA unleashed the accelerating power of alignment with an intense focus on One Market.

Most companies want to sell their products and services to everyone. In contrast, USAA is focused on the unique needs of military families. In fact, membership is tightly restricted to four categories of people:

  1. Currently Serving: Individuals who are currently serving in the U.S. Air Force, Army, Coast Guard, Marines, Navy, National Guard, and Reserves.
  2. Former Military: Those who have retired or separated from the U.S. military with a discharge type of Honorable.
  3. Family: Children, current spouses, widows, widowers, and unremarried former spouses of USAA members who had USAA auto or property insurance while married and individuals whose parents have or had USAA auto or property insurance.
  4. Cadets or Midshipmen: Cadets and midshipmen at U.S. service academies, in advanced ROTC or on ROTC scholarship, plus officer candidates within 24 months of commissioning.

This narrow scope allows USAA to understand their customers better than their unfocused competitors. It also allows them to tailor their services to the unique needs of the military. In addition, a significant percentage of USAA’s employees are former military members themselves.

“At USAA, we are passionate advocates for military members and their families. The same core values that guide our military inspire USAA employees to go above and beyond for our members each and every day.”

This tight alignment has produced phenomenal results.

In October 2017, the Temkin Group released a research report ("Net Promoter Score Benchmark Study, 2017") based on a study of 10,000 U.S. consumers.

With a Net Promoter Score (NPS) of 66, USAA's insurance business earned the highest score in the study for the fifth year in a row.

In addition, USAA has long been widely recognized for being a great place to work including FORTUNE 100 Best Companies to Work For® and the Gallup Great Workplace Award.

Focusing on One Market unleashed the accelerating power of alignment for USAA. This strategy worked for them, and perhaps it is right for you.

After all, it is better to dominate One Market than dabble in dozens of them.

Is your company intensely focused on dominating One Market?

11-11-19

SPEED READING -- ONE STRATEGY

LinkedIn-Post_StrategyEvery company has a corporate strategy.

But most people don’t understand what it is.

In a Strategy& survey of more than 1,900 executives, an astounding 80 percent said their strategy was not well understood within their own company.

Obviously, people can’t align with—or execute—a strategy they don’t understand.

Strategy is “one of those words.” Every company needs One, but even the strategy consulting firms don’t have a common definition for what a strategy is.

Rather than create a new definition of strategy or propose yet another framework, this chapter focuses on five critical strategy questions every company must answer in order to provide clarity to the organization:

  • Which market segment(s) should you target?
  • What product(s) and/or service(s) should you sell?
  • Where should you compete?
  • How much should you charge?
  • What is your business model?

To unleash the accelerating power of alignment, your company must answer them clearly and precisely.

Unfortunately, many companies struggle to do this. If they even have a strategy, it could be summarized as “more.” More markets, more proposals, more products, more cities, etc.

The problem is that sometimes, more is less.

In contrast, fast-lane companies are much more disciplined about their strategy. In this chapter, we will look at how USAA, Basecamp, Iridium, Dollar Tree, and TOMS answered the five strategy questions.

Obviously, there are many other strategy questions that must be answered. Many of these are functional strategies. The Chief Financial Officer must develop a strategy to finance the company’s operations. The Chief Marketing Officer must develop a strategy to build awareness and demand. The Chief People Officer must develop a strategy to recruit, retain, and develop the very best people. This week, we will focus on the five corporate strategy questions.

NOTE: These stories are excerpted from my book, Drive One Direction.

11-09-19

HOW DE BEERS UNLEASHED THE ACCELERATING POWER OF ALIGNMENT

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GEICO has been using their slogan since 1999. Chick-fil-A has been using theirs since 1995.

But these pale in comparison to De Beers.

The De Beers Group (www.debeers.com), founded in 1888 by British businessman Cecil Rhodes, is a global powerhouse involved in multiple components of the diamond industry, including exploration, mining, retail, trading, and industrial diamond manufacturing.

In 1947, Frances Gerety, a young copywriter at the N. W. Ayer advertising agency in Philadelphia, created the slogan “A diamond is forever.”

De Beers has been using it ever since. That’s over seventy years!

Engagement rings have been around since Medieval times. However, prior to this campaign, less than ten percent of engagement rings contained diamonds. The campaign was designed to create a situation where every person getting engaged felt compelled to give a ring with a diamond in it.

Their “A diamond is forever” campaign also set the benchmark for how much to spend—establishing the “two months’ salary” rule that is still widely used today.

The campaign worked. Today, over 80 percent of women receive a diamond ring on their engagement.

From 1943 through 1970, Ms. Gerety wrote all the company’s ads and was even featured in a novel called The Engagements, written by J. Courtney Sullivan.

“A diamond is forever” was recognized by Advertising Age as the greatest advertising slogan of the 20th century.

In 2008, De Beers leveraged their brand position to launch a new product line called Forevermark. Experts at the Forevermark Diamond Institute hand-pick the very best diamonds. (Of all the world’s diamonds, less than one percent are eligible to become Forevermark.) Every Forevermark diamond is then inscribed with the Forevermark icon and a numerical code—invisible to the naked eye—that can forever identify the diamond and its authenticity.

At this point, I can hear the skeptics and contrarians questioning this strategy. After all, times change. Markets change. Consumers change. Products change.

Everything changes!

Yes, but a well-crafted message can indeed stand the test of time. Perhaps De Beers should say that “A tagline is forever.”

If your advertising agency asked you to commit to One Tagline for seventy years, how would you respond?

11-08-19

HOW CHICK-FIL-A UNLEASHED THE ACCELERATING POWER OF ALIGNMENT

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Chick-fil-A, Inc. (www.chick-fil-a.com) is a family-owned and privately held restaurant company founded in 1967 by S. Truett Cathy. Headquartered in Atlanta, Georgia, Chick-fil-A operates more than 2,300 restaurants in 47 states and Washington, D.C.

For more than 20 years, black-and-white Holstein cows have admonished us to “EAT MOR CHIKIN.”

The rebel cows, as they are known, have painted their message of self-preservation on billboards, water towers, buildings, and more.

The real-life cows—including Kat, Freedom, Freckles, and Molly—have starred in dozens of television commercials and even have their own calendar—known as the Cowlendar.

In 2005, Chick-fil-A launched Cow Appreciation Day. Customers who come to a restaurant dressed as cows receive a free entrée. “Cow Appreciation Day is the one day where it’s okay to dress ‘udderly’ crazy and get rewarded for it,” quipped Jon Bridges, their Chief Marketing Officer.

The cows have even been inducted into New York’s Madison Avenue Advertising Walk of Fame. (Coincidentally the campaign was also developed by The Martin Agency in Richmond, Virginia.)

The EAT MOR CHIKIN campaign has helped fuel the company’s amazing growth. Twenty years ago, when Chick-fil-A started the campaign, they had 750 restaurants and less than $1B in revenue. Now they have over 2,300 restaurants and over $9B in revenue.

In addition, Chick-fil-A generates more revenue per store than any other fast food restaurant. The average Chick-fil-A unit generated around $4M in 2017. For comparison, the average McDonald’s generated $2.7M and the average Starbucks generates $945K.

This is especially impressive since Chick-fil-A restaurants are closed on Sundays.

In addition to driving business results, the EAT MOR CHIKIN campaign provided a clear and consistent message that aligned the interests of franchisees, employees, and customers in a fun and engaging way.

The company credits much of its success to the stability of their leadership team. While corporate leaders at many quick-service restaurants change frequently, many senior leaders at Chick-fil-A have been with the company for more than 20 years.

They are also extremely selective when selecting their franchisees. Each year, over 40,000 people inquire about becoming a franchisee, but only about 100 get selected. Thus, becoming a Chick-fil-A franchisee is ten times harder than getting into Harvard!

“When we select someone, we select them for life,” explained retired COO Jimmy Collins. Clearly, they apply that same thinking to advertising.

Does your company have One unique and endearing personality?

P.S. As it turns out, their frequent diner rewards program is called Chick-fil-A One™. They are speaking my language!

11-07-19

HOW GEICO UNLEASHED THE ACCELERATING POWER OF ALIGNMENT

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The Government Employees Insurance Company employs more than 40,000 associates in 17 major offices around the United States.

They unleashed the accelerating power of alignment with a clear and compelling value proposition.

Never heard of them? The Government Employees Insurance Company is commonly known as GEICO (www.geico.com).

“Fifteen minutes can save you fifteen percent or more on car insurance.”

GEICO started running the “fifteen percent” campaign (developed by The Martin Agency in Richmond, Virginia) in 1999.

In 2013, they even added a parody campaign where someone reads a "fifteen percent" ad and a second person sarcastically says, "Everybody knows that."

Fifteen minutes.

Fifteen percent.

One message.

For over fifteen years.

Alignment is both an internal and an external issue. Creating a clear and memorable tagline creates brand alignment for GEICO with consumers. It also provides tremendous clarity to everyone inside the company.

Every decision can be evaluated based on its alignment with the brand promise.

GEICO has done such an amazing job owning their value proposition that every competitor has been forced to find a different one.

Clearly, the campaign has produced incredible results. Since launching the “fifteen percent” campaign, GEICO has grown revenue from $5.6 billion to over $26 billion!

Having One Tagline is a highly effective way of creating alignment. Assuming, that is, you have the discipline to stay with One.

Does your company have One clear and compelling value proposition?

11-06-19

HOW UPS UNLEASHED THE ACCELERATING POWER OF ALIGNMENT

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UPS (NYSE: UPS) has 481,000 employees, 5,000 UPS Stores, 1,990 facilities, 123,000 delivery vehicles, 248 jet aircraft, and 316 chartered aircraft.

UPS unleashed the accelerating power of alignment with One Color.

UPS is enormous. But it all started with One Entrepreneur in One City with One Idea.

In 1907, James Casey founded the American Messenger Company in Seattle, Washington.

In 1919, the company expanded to serve the Oakland, California, market and changed its name to United Parcel Service. The change was to remind the company that operations were still united.

Even in 1919—One Century ago—alignment was critical to success!

The brown color used by UPS is called Pullman Brown. Legend has it that the brown color was chosen because it would make it easier to keep their trucks clean.

Amazingly, UPS has a trademark on its unique shade of brown.

Every company has a color palette. But only a few literally own One Color.

It seems like such a simple thing. Trivial, really.

There are thousands of books about corporate strategy and competitive advantage.

Yet UPS leveraged the simplest and humblest of colors to create an amazing competitive position.

Immediately recognizable. A global One-of-a-Kind.

For eight years, UPS ran an advertising campaign that asked, “What can brown do for you?”

Perhaps it is time to consider a different question, “What could owning One Color do for you?”

Just to be clear, there is a big difference between having a corporate color palette that your ad agency created and owning One Color.

Does your company have One Signature Color?

11-05-19

HOW VIRGIN UNLEASHED THE ACCELERATING POWER OF ALIGNMENT

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The Virgin Group (www.virgin.com) is a global conglomerate of over sixty businesses in five core sectors: Travel & Leisure, Telecoms & Media, Music & Entertainment, Financial Services, and Health & Wellness. Their portfolio companies employ 69,000 employees in 35 countries.

Virgin unleashed the accelerating power of alignment with One Brand.

In 1970, Richard Branson—now Sir Richard Branson—started a record company.

Recalling the origins of the Virgin brand name, Branson said: “I was 16 years old, sitting around with a bunch of girls, and I’d come up with the name Slipdisk Records for our new record company, and one of the girls said, ‘No, call it Virgin. We’re all virgins, you’re a virgin in business.’ So, we decided on Virgin, and then I couldn’t get it registered in the registry office for four years because they thought the word Virgin was rude. In the end, I wrote a letter to them quoting the English dictionary to show it means pure, untouched, it’s the opposite of rude. So finally, they gave it to me.”

Virgin has become one of the most valuable brands in the world. It is also one of the most recognizable with 99 percent brand recognition in the UK and 96 percent in the U.S.

In addition to the unique logo and the color red, the brand creates alignment across the portfolio of businesses with six brand values: heartfelt service, delightfully surprising, red hot, straight up, insatiable curiosity, and smart disruption.

Lisa Thomas is the Managing Director and global head of brand at Virgin Enterprises. Here is how she described the process of managing the One Brand strategy, "Sometimes we lack focus and my job is to ensure we are brilliant and consistent where it matters. Not just around the brand, the logo—but also around our business mantra: happy people make happy customers, which makes for happy shareholders."

Many people think a brand is a logo.

In reality, it is much more than that. It expresses who you are, what you believe, why you exist, what you do, and more.

The Virgin brand permeates every molecule of the company. The brand is infused into the culture, the vision, the mission, the values, the colors, the tone of voice, the services, and even the architecture of the office space.

In addition, the Virgin brand extends into human resources, since people are “the personification of the brand.”

Clearly, the One Brand strategy has produced amazing results. Virgin Records was the first Virgin company to reach a billion-dollar valuation in 1992. Since then, eight other Virgin-branded companies have become billion-dollar enterprises.

Does your company create alignment with a One Brand strategy?

11-04-19

SPEED READING -- ONE BRAND

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Every company has a corporate brand.

But most are undifferentiated and uninspiring.

Here’s the problem: people don’t align with undifferentiated and uninspiring brands.

So, you must start by evaluating your corporate brand. (While your company may have many brands, it is your corporate brand that ultimately creates alignment.)

Your corporate brand has many functions.

First, your corporate brand must be an umbrella. It must be large enough to cover all your products and services. It must work in all your geographies. It must appeal to all your stakeholders.

While some will debate the “extendibility” of a corporate brand, Virgin uses theirs for every business they enter. Obviously, this creates alignment across their entire portfolio.

Second, your corporate brand must identify who you are and differentiate you from your competitors. Some of the key components of your corporate brand include:

  • Your company name
  • Your corporate logo
  • Your corporate visual identity
  • Your corporate value proposition
  • Your corporate personality
  • Your corporate tagline

So, perhaps you are thinking, “We have these things … so, we are aligned, right?”

Remember, people don’t align with undifferentiated and uninspiring brands. So, just because you have them does not automatically mean that they are any good.

Finally, your corporate brand must be a powerful magnet. It must attract the right people—including employees, customers, partners, and investors—to your company.

This week, we will explore how fast-lane companies like Virgin, UPS, the Government Employees Insurance Company, Chick-fil-A, and De Beers unleashed the accelerating power of alignment by creating a corporate brand so powerful that millions of people want to align with it.

NOTE: These stories are excerpted from my book, Drive One Direction.

11-01-19

HOW NETFLIX UNLEASHED THE ACCELERATING POWER OF ALIGNMENT

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Netflix (NASDAQ: NFLX) is the world’s leading internet entertainment service with over 109 million members.

They unleashed the accelerating power of alignment with a very unique Culture Code.

In 2009, Netflix’ CEO Reed Hastings, Chief Talent Officer Patti McCord, and a few others collaborated to create a 127-slide presentation about the culture they wanted to create.

Since it was posted online in 2009, the Netflix’s “Culture Code” deck has been viewed more than 10 million times. Sheryl Sandberg, the Chief Operating Officer of Facebook, described it as one of the most important documents to ever come out of Silicon Valley. (The current version is now a long text page on their corporate website.)

Many of their ideas are antithetical to the traditional HR approach. Their vacation policy is, “Take vacation.” Their expense policy is five words long: “Act in Netflix’s best interests.”

Another unique aspect is “the keeper test” that managers use to evaluate employees: “If one of your employees told you he or she was leaving for a job at a peer company, would you fight hard to keep that employee at Netflix? If the answer is ‘no,’ then Netflix will move that person out of the business. Sustained B-level performance, despite ‘A for effort’, generates a generous severance package, with respect.”

Perhaps most interesting is their approach to alignment, which they describe as “Highly Aligned, Loosely Coupled.” Here is how they explain it:

As companies grow, they often become highly centralized and inflexible. Symptoms include:

    • Senior management is involved in tons of small decisions
    • There are numerous cross-departmental buy-in meetings to socialize tactics
    • Pleasing other internal groups takes precedence over pleasing customers
    • The organization is highly coordinated and less prone to error, but slow and frustrating

We avoid this by being highly aligned and loosely coupled. We spend lots of time debating strategy together, and then trust each other to execute on tactics without prior approvals. Often, two groups working on the same goals won’t know of, or have approval over, their peer activities. If, later, the activities don’t seem right, we have a candid discussion. We may find that the strategy was too vague or the tactics were not aligned with the agreed strategy. And we discuss generally how we can do better in the future.

The success of a “Highly Aligned, Loosely Coupled” work environment is dependent upon the collaborative efforts of high-performance individuals and effective context. Ultimately, the end goal is to grow the business for bigger impact while increasing flexibility and agility. We seek to be big, fast, and nimble.

Netflix’s unique approach to alignment has produced stunning results. Since publishing the culture deck in 2009, Netflix has grown nearly tenfold!

Does your company have a radically unique corporate code?