What is Strategy? Strategy Day at EO Accelerator

1. astonishdesign.comtim@astonishdesign.com @Astonish_Desig n Ft. Worth Accelerator Strategy Day Grab digital copy of today’s material: http://bit.ly/1GHtyKJ

2. astonishdesign.comtim@astonishdesign.com @Astonish_Desig n

3. astonishdesign.comtim@astonishdesign.com @Astonish_Desig n Tim Hamilton Introduction Company: Agile product & platform development Founded in 2000 Oﬃces in Austin, TX Tradition: Formal Fridays Background: Born in South Africa Wife: Christy + 1 on the way Cat person Studied Econ & MIS at UT

4. astonishdesign.comtim@astonishdesign.com @Astonish_Desig n Ground Rules One conversation. Conﬁdentiality. Trust & respect. Peers. Gestalt.

5. astonishdesign.comtim@astonishdesign.com @Astonish_Desig n Sources

6. astonishdesign.comtim@astonishdesign.com @Astonish_Desig n Three ingredients to success: "Disciplined People. Disciplined Thought. Disciplined Action.” – Jim Collins

7. astonishdesign.comtim@astonishdesign.com @Astonish_Desig n Value Proposition Hair on Fire Issue Words You Own Central Idea Core Purpose 3 Brand Questions Brand Promises BHAG Value Discipline Empirical Creativity Productive Paranoia SMaC Recipe Catalytic Mechanism Disciplined Action Hedgehog Concept Reverse Engineer Disciplined Thought Meeting Rhythm Maybe Plan for the Day

8. astonishdesign.comtim@astonishdesign.com @Astonish_Desig n What is strategy? How are we going to grow top line revenue?

9. astonishdesign.comtim@astonishdesign.com @Astonish_Desig n ”The job of the CEO is not to run the company. The job is to grow the company.” – Jack Daly

10. astonishdesign.comtim@astonishdesign.com @Astonish_Desig n "Strategy is the art of exclusion." – Unknown

11. astonishdesign.comtim@astonishdesign.com @Astonish_Desig n “If you have any issues with happiness in your business, then you must start with people. If you have revenue or growth issues, then strategy is the thing to focus on. If proﬁt or time is a key issue, then you have execution issues.” – Verne Harnish

12. astonishdesign.comtim@astonishdesign.com @Astonish_Desig n The most important person in strategy is… the customer. Value Proposition Hair on Fire Issue Words You Own Central Idea Value Discipline

13. astonishdesign.comtim@astonishdesign.com @Astonish_Desig n “I can’t tell you the key to success, but the key to failure is trying to please everyone” - Ed Sheeran

15. astonishdesign.comtim@astonishdesign.com @Astonish_Desig n Purchase decisions are made emotionally, not intellectually. The ﬁrst step to strategy is empathy.

16. astonishdesign.comtim@astonishdesign.com @Astonish_Desig n From your perspective… what’s missing, wrong or insane about your industry? Value Proposition Hair on Fire Issue Words You Own Central Idea Value Discipline

20. astonishdesign.comtim@astonishdesign.com @Astonish_Desig n 68%

21. astonishdesign.comtim@astonishdesign.com @Astonish_Desig n Now, we’re going to choose what uncommon oﬀer we want to be known for. Value Proposition Hair on Fire Issue Words You Own Central Idea Value Discipline

23. astonishdesign.comtim@astonishdesign.com @Astonish_Desig n “Software that’s for sure.”

24. astonishdesign.comtim@astonishdesign.com @Astonish_Desig n Next up, the central strategic idea. Value Proposition Hair on Fire Issue Words You Own Central Idea Value Discipline

25. astonishdesign.comtim@astonishdesign.com @Astonish_Desig n “Strategy is not a lengthy action plan. It is the evolution of a central idea through continually changing circumstances.” Jack Welch

26. astonishdesign.comtim@astonishdesign.com @Astonish_Desig n #1 or #2 or exit.

27. astonishdesign.comtim@astonishdesign.com @Astonish_Desig n Be proﬁtable and democratize the skies.

28. astonishdesign.comtim@astonishdesign.com @Astonish_Desig n Inbound marketing is in. Outbound is out.

29. astonishdesign.comtim@astonishdesign.com @Astonish_Desig n Become the safest choice for outsourced software development.

30. astonishdesign.comtim@astonishdesign.com @Astonish_Desig n Value Proposition Hair on Fire Issue Words You Own Central Idea Value Discipline

31. astonishdesign.comtim@astonishdesign.com @Astonish_Desig n Build & manage systems and facilities for high volume repetitive tasks. ID, attract and build relationships with customers. Conceive of attractive new products & services and commercialize them. Product Innovation Operational Excellence Customer Intimacy Three Generic Strategies

32. astonishdesign.comtim@astonishdesign.com @Astonish_Desig n A focus on the core processes of invention, product development, and market exploitation. Product Leadership Innovation Knowledge- Management  Collaboration • Providing products / services that continually redeﬁne the state of the art. • Kill their babies. • Key core competencies are innovation and quality control. • Strive to be the best. • R&D & talent management.

33. astonishdesign.comtim@astonishdesign.com @Astonish_Desig n • Total solution, not just a product or service. • Focus on what the customer wants, not what the market wants. • Cultivate relationships, not one time transactions. • Specialize in satisfying unique needs. • Customer needs trump operating systems and processes. • Go the extra mile. Customer Intimacy An obsession with core processes of solution development, results management and relationship management. Relationship Management Knowledge Management

34. astonishdesign.comtim@astonishdesign.com @Astonish_Desig n • Low cost offer (blend of high convenience and low price). • Broad market focus. • Not product / service innovator; instead delivery innovators. • Do not cultivate 1:1 customer relationships. • Execute extraordinarily well. Operational Excellence Quality Cost Speed Processes for end-to-end product supply and basic service that are optimized and streamlined to minimize cost and provide hassle-free service.

36. astonishdesign.comtim@astonishdesign.com @Astonish_Desig n Why is this important?

37. astonishdesign.comtim@astonishdesign.com @Astonish_Desig n “No company can succeed today by trying to be all things to all people. We must instead ﬁnd an uncommon value to deliver to a chosen market.” – The Discipline of Market Leaders

38. astonishdesign.comtim@astonishdesign.com @Astonish_Desig n Have you chosen your market? Or is your market choosing it for you?

39. astonishdesign.comtim@astonishdesign.com @Astonish_Desig n “Selection of a value discipline shapes every subsequent plan and decision a company makes, coloring the entire organization from its core competencies to its culture.” – The Discipline of Market Leaders

40. astonishdesign.comtim@astonishdesign.com @Astonish_Desig n Does your strategy inform every decision you make today?

41. astonishdesign.comtim@astonishdesign.com @Astonish_Desig n How do the founders spend their time? What key messages did you pick up on? What value Video Case Studies

42. astonishdesign.comtim@astonishdesign.com @Astonish_Desig n Decision making at the lab. Product Leadership: Pixar Culture & Competencies Employee centered. Coddling the creative stars.

43. astonishdesign.comtim@astonishdesign.com @Astonish_Desig n Product Leadership: Pixar Goals & Objectives While productivity is a goal… …quality & originality are the goal.

44. astonishdesign.comtim@astonishdesign.com @Astonish_Desig n " ... [Steve Jobs] wanted there to be mixing. He knew that the human friction makes the sparks, and that when you're talking about a creative endeavor that requires people from different cultures to come together, you have to force them to mix; that our natural tendency is to stay isolated, to talk to people who are just like us, who speak our private languages, who understand our problems. But that's a big mistake. And so his design was to force people to come together even if it was just going to be in the bathroom.” - Imagine, Jonah Lehrer Product Leadership: Pixar

45. astonishdesign.comtim@astonishdesign.com @Astonish_Desig n Product Leadership: Toyota Environments that promote collaboration W. Edwards Deming

46. astonishdesign.comtim@astonishdesign.com @Astonish_Desig n Customer Intimacy: IBM Best price? Hardly. Best products? Nope. Latest technology? Negative.

47. astonishdesign.comtim@astonishdesign.com @Astonish_Desig n It’s about the total solution. Methods for planning new business applications. Training management. Providing explanations of increasing costs. Aided with diagnosis and resolution of problems. Upgrading & maintaining systems. Customer Intimacy: IBM Providing the best overal result for client.

48. astonishdesign.comtim@astonishdesign.com @Astonish_Desig n Culture & Competencies De-centralized decision making. All activities are aligned to customer needs. Deep customer knowledge. Not cheapest offers or most innovative. Eco-system of partners for production & delivery. Customer Intimacy: IBM Tailored / personalized service / products to ﬁt needs.

49. astonishdesign.comtim@astonishdesign.com @Astonish_Desig n Operational Excellence Example: Ikea Luxurious show-room? No. Best in class quality? Nope. Helpful sales staff? Negative.

50. astonishdesign.comtim@astonishdesign.com @Astonish_Desig n Operational Excellence Example: Ikea Culture & Competencies Cost focused. Stresses standardization. Predictability and efﬁciency are key. Centralized decision making. Rules based operations.

51. astonishdesign.comtim@astonishdesign.com @Astonish_Desig n But aren’t these all really big companies?

52. astonishdesign.comtim@astonishdesign.com @Astonish_Desig n Customer Intimacy: Trunk Club

58. astonishdesign.comtim@astonishdesign.com @Astonish_Desig n Review & Break Value Proposition Hair on Fire Issue Words You Own Central Idea Core Purpose Brand Value Pyramid Brand Promise BHAG Value Discipline Hedgehog Concept Disciplined Thought

59. astonishdesign.comtim@astonishdesign.com @Astonish_Desig n Could be best at Passionate about Economic engine Core Purpose BHAG Brand Value Pyramid Brand PromiseHedgehog Concept

60. astonishdesign.comtim@astonishdesign.com @Astonish_Desig n What could you be the best in the world at? Hint: You might already doing it… but you can’t tell.

61. astonishdesign.comtim@astonishdesign.com @Astonish_Desig n Economic Engine: What’s your proﬁt per X?

62. astonishdesign.comtim@astonishdesign.com @Astonish_Desig n “What’s the one thing I can do such that by doing it everything else will be easier or unnecessary?”

63. astonishdesign.comtim@astonishdesign.com @Astonish_Desig n Wheels Up.

64. astonishdesign.comtim@astonishdesign.com @Astonish_Desig n What are you deeply passionate about? Core Purpose up next… in the meantime, let’s take a 10 minute break.

65. astonishdesign.comtim@astonishdesign.com @Astonish_Desig n Core Purpose: Simon Sinek Core Purpose BHAG Brand Value Pyramid Brand PromiseHedgehog Concept

66. astonishdesign.comtim@astonishdesign.com @Astonish_Desig n Apple’s Why

67. astonishdesign.comtim@astonishdesign.com @Astonish_Desig n Big Hairy Audacious Goal (BHAG) Core Purpose BHAG Brand Value Pyramid Brand PromiseHedgehog Concept

68. astonishdesign.comtim@astonishdesign.com @Astonish_Desig n A grand call to inspire action to greatness. Your emotional mission statement.

69. astonishdesign.comtim@astonishdesign.com @Astonish_Desig n "A true BHAG is clear and compelling, serves as unifying focal point of effort, and acts as a clear catalyst for team spirit. It has a clear ﬁnish line, so the organization can know when it has achieved the goal; people like to shoot for ﬁnish lines." – Jim Collins

71. astonishdesign.comtim@astonishdesign.com @Astonish_Desig n “A computer on every desk and in every home running Windows.” – Bill Gates, 1980

72. astonishdesign.comtim@astonishdesign.com @Astonish_Desig n More from Jim Collins… http://www.jimcollins.com/media_topics/building- greatness.html#audio=97 http://www.jimcollins.com/media_topics/ ﬂywheel.html#audio=93

73. astonishdesign.comtim@astonishdesign.com @Astonish_Desig n Four Types: Target Oriented Become a $125 billion company by year 2000. (Wal-Mart, 1990) Become the dominant player in commercial aircraft and bring the world into the jet age. (Boeing, 1950)

74. astonishdesign.comtim@astonishdesign.com @Astonish_Desig n Four Types: Competitive Crush Adidas. (Nike, 1960s) Yamaha wo tsubusu! We will destroyYamaha! (Honda, 1970s)

75. astonishdesign.comtim@astonishdesign.com @Astonish_Desig n Four Types: Role Model Become the Nike of the cycling industry. (Giro Sport Design, 1986) Become as respected in 20 years as Hewlett- Packard is today. (Watkins-Johnson, 1996)

76. astonishdesign.comtim@astonishdesign.com @Astonish_Desig n Four Types: Internal Transformation Transform this company from a defense contractor into the best diversiﬁed high-technology company in the world. (Rockwell, 1995) Transform this company from a chemical manufacturer into one of the preeminent drug- making companies in the world. (Merck, 1930s)

77. astonishdesign.comtim@astonishdesign.com @Astonish_Desig n Brand Value Pyramid Core Purpose BHAG Brand Value Pyramid Brand PromiseHedgehog Concept

79. astonishdesign.comtim@astonishdesign.com @Astonish_Desig n Meets desires. Emotional beneﬁts.Meets unrecognized needs. Values & beliefs. Evangelism Commitment Satisfaction Meets customers’ expectations. Functional beneﬁts & attributes.

80. astonishdesign.comtim@astonishdesign.com @Astonish_Desig n • Product design • Technology • Engineering expertise • Agile Scrum • Web & mobile architectures • Digital strategy & facilitation • ClickModel prototyping • On-budget / on-time delivery • The safe choice • No surprises • 68% failure no more • In control • Security • Trust • Dependability • Confidence • Transparent • Accountable • Clarity • Indispensable • Your unfair technology advantage. • You deserve to discover your unfair advantage. • You are capable of so much more than you think. • Your vision is your legacy - bring it to life. Functional benefits & attributes. Emotional benefits. Values & beliefs.

81. astonishdesign.comtim@astonishdesign.com @Astonish_Desig n “My project is completed on time and budget.” Meets Expectations “There weren’t any surprises in the course of my project.” “I can experience the solution before I cut the big check to build it.” “The process is free from risk and I completely trust my partner.” “They understand and care about my business more than I thought possible.” “The were eﬃcient, accountable and transparent.” Meets Desires “I see new possibilities for my organization as a result of our work together.” “Astonish is like my unfair advantage. What can we work on next?” “What I thought I needed was a web app, but what I got was more valuable: a partner.” “Yep, that’s pretty much what I expected.” Meets Unrecognized Needs

82. astonishdesign.comtim@astonishdesign.com @Astonish_Desig n Three Brand Value Questions: What does it say about your customer that they work with your company?

83. astonishdesign.comtim@astonishdesign.com @Astonish_Desig n Three Brand Value Questions: What is the singular thing that a customer can get from their relationship with you that they can’t get anywhere else?

84. astonishdesign.comtim@astonishdesign.com @Astonish_Desig n Three Brand Value Questions: How do you make the customer a hero in his or her story?

85. astonishdesign.comtim@astonishdesign.com @Astonish_Desig n Brand Promise The different, unique, uncommon way you solve customer’s greatest need. Core Purpose BHAG Brand Value Pyramid Brand PromiseHedgehog Concept

86. astonishdesign.comtim@astonishdesign.com @Astonish_Desig n Pizza delivered in 30 minutes or less or it’s free.

87. astonishdesign.comtim@astonishdesign.com @Astonish_Desig n RackSpace manages hosting solutions and when client’s systems go down, it’s never a good thing. So it promises to get hardware ﬁxed in one hour or it’s free. It also realizes that its customers hate to wait on hold so it promises to answer the phone in 3 rings or less, and to make sure that the customer can get their problem ﬁxed within one transfer.

88. astonishdesign.comtim@astonishdesign.com @Astonish_Desig n If your beverage is not made to your full enjoyment, we’ll replace it with one that does.

89. astonishdesign.comtim@astonishdesign.com @Astonish_Desig n Style at a low cost.

91. astonishdesign.comtim@astonishdesign.com @Astonish_Desig n 3LFs: Low fares, lots of ﬂights, lots of fun.

92. astonishdesign.comtim@astonishdesign.com @Astonish_Desig n Peace of mind.

93. astonishdesign.comtim@astonishdesign.com @Astonish_Desig n The Smart Way to Prototype Envision your custom software idea or website before committing the resources to build it out in full. & cost effective V ClickModel℠ User Experience Prototyping

94. astonishdesign.comtim@astonishdesign.com @Astonish_Desig n More important that you start than it is that you get it perfect. Iterate

95. astonishdesign.comtim@astonishdesign.com @Astonish_Desig n “Vision is just about picking which problems you want to work on. Success means your problems get better.” – Ari Weinzweig

96. astonishdesign.comtim@astonishdesign.com @Astonish_Desig n How to work on strategy?

97. astonishdesign.comtim@astonishdesign.com @Astonish_Desig n "As leaders. you don’t need to have any answers. Your job is to nail the question and then ﬁgure out who to involve to correctly answer the question.” – Verne Harnish

98. astonishdesign.comtim@astonishdesign.com @Astonish_Desig n "Whether you want to live a certain thing should be the only criteria with which you decide whether to give it attention or not." –Unknown

99. astonishdesign.comtim@astonishdesign.com @Astonish_Desig n Abundance & scarcity vs. belief in oneself to adapt and survive.

100. astonishdesign.comtim@astonishdesign.com @Astonish_Desig n Empirical Creativity Productive Paranoia SMaC Recipe Catalytic Mechanism Disciplined Action Reverse Engineer Meeting Rhythm Maybe

101. astonishdesign.comtim@astonishdesign.com @Astonish_Desig n Reverse Engineering

102. astonishdesign.comtim@astonishdesign.com @Astonish_Desig n Meeting Rhythm

103. astonishdesign.comtim@astonishdesign.com @Astonish_Desig n Empirical Creativity

104. astonishdesign.comtim@astonishdesign.com @Astonish_Desig n Productive Paranoia

105. astonishdesign.comtim@astonishdesign.com @Astonish_Desig n Productive Paranoia

106. astonishdesign.comtim@astonishdesign.com @Astonish_Desig n “Speciﬁc, Methodical and Consistent." SMaC Recipe In 1979, then CEO of Southwest Airlines, Howard Putnam was facing a massive shift in the competitive landscape: the de-regulation of the airline industry. Faced a tough question: “Does radical change in our environment call for inﬂicting radical change upon ourselves?

107. astonishdesign.comtim@astonishdesign.com @Astonish_Desig n - Remain a short-haul carrier, under two-hour segments. - Utilize the 737 as our primary aircraft for ten to twelve years. - Continued high aircraft utilization and quick turns, ten minutes in most cases. -The passenger is our #1 product. Do not carry air freight or mail, only small packages which have high proﬁtability and low handling costs. - Continued low fares and high frequency of service. Stay out of food services. - No interlining….costs in ticketing, tariffs and computers and our unique airports do not lend themselves to interlining. RetainTexas as our #1 priority and only go interstate if high-density short-haul markets are available to us etc.

108. astonishdesign.comtim@astonishdesign.com @Astonish_Desig n Catalytic Mechanism