The SHIFTPOINTS Blog

Note:  This is an excerpt from my latest book, Drive One Direction: How to Unleash the Accelerating Power of Alignment. In the One Way chapter, we highlight companies who unleashed the accelerating power of alignment with an intense focus on their corporate standards. 

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 150^oF and 170^oF 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?

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.

Note:  This is an excerpt from my latest book, Drive One Direction: How to Unleash the Accelerating Power of Alignment. In the One Way chapter, we highlight companies who unleashed the accelerating power of alignment with an intense focus on their corporate standards.

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?

Every 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.

Note:  This is an excerpt from my latest book, Drive One Direction: How to Unleash the Accelerating Power of Alignment. In the One Portfolio chapter, we highlight companies who unleashed the accelerating power of alignment with an intense focus on their product portfolio.

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 is an excerpt from my latest book, Drive One Direction: How to Unleash the Accelerating Power of Alignment. In the One Portfolio chapter, we highlight companies who unleashed the accelerating power of alignment with an intense focus on their product portfolio.

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?

Note:  This is an excerpt from my latest book, Drive One Direction: How to Unleash the Accelerating Power of Alignment. In the One Portfolio chapter, we highlight companies who unleashed the accelerating power of alignment with an intense focus on their product portfolio.

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.

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?

Note:  This is an excerpt from my latest book, Drive One Direction: How to Unleash the Accelerating Power of Alignment. In the One Portfolio chapter, we highlight companies who unleashed the accelerating power of alignment with an intense focus on their product portfolio.

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 11^th 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?

Most 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.

Note:  This is an excerpt from my latest book, Drive One Direction: How to Unleash the Accelerating Power of Alignment. In the One Strategy chapter, we highlight companies who unleashed the accelerating power of alignment with an intense focus on their corporate strategy.

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.