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 Strategy chapter, we highlight companies who unleashed the accelerating power of alignment with an intense focus on their corporate strategy.

Basecamp (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?

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.

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?

Every company has a corporate strategy.

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.

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?

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

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!

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

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?

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

 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?

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?

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.

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

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?