SlideShare a Scribd company logo
praxent.comtim@praxent.com@PraxentSoftware
I can’t tell you the key to
success, but the key to
failure is trying to please
everyone
-Ed Sheeran
“
praxent.comtim@praxent.com@PraxentSoftware
Tim Hamilton
Introduction
Company
Digital product & platform
development
Founded in 2000
Offices in Austin, TX
Tradition: Formal Fridays
Background
Born in South Africa
Wife: Christy
Son: Graham
Studied Economics &
MIS at UT Austin
praxent.comtim@praxent.com@PraxentSoftware
praxent.comtim@praxent.com@PraxentSoftware
Colonel John Boyd
Military Strategist
Invented OODA Loop
praxent.comtim@praxent.com@PraxentSoftware
praxent.comtim@praxent.com@PraxentSoftware
“When our circumstances change, we
often fail to shift our perspective and
instead continue to try to see the world
as we feel it should be.”
– The Tao of Boyd: How to Master the OODA Loop
OBSERV ORIEN DECID ACT
praxent.comtim@praxent.com@PraxentSoftware
praxent.comtim@praxent.com@PraxentSoftware
praxent.comtim@praxent.com@PraxentSoftware
Google	Self-Driving	Car
praxent.comtim@praxent.com@PraxentSoftware
OBSERVE ORIENT DECIDE ACT
What	
business	
are	you	
really	in?
praxent.comtim@praxent.com@PraxentSoftware
“Strategy is not a lengthy
action plan. It is the evolution
of a central idea through
continually changing
circumstances.”
Jack	Welch
OBSERVE ORIENT DECIDE ACT
praxent.comtim@praxent.com@PraxentSoftware
What’s	your	customers’	
hair	on	>ire	problem?
OBSERVE ORIENT DECIDE ACT
praxent.comtim@praxent.com@PraxentSoftware
praxent.comtim@praxent.com@PraxentSoftware
praxent.comtim@praxent.com@PraxentSoftware
praxent.comtim@praxent.com@PraxentSoftware
Spam
blockers
CAN-SPAM
Act
Tivo
Netfli
x
Pay-
per-
view
Pop-up
blocker
s
Non-
solicit
call
lists
Sirius/
XM
Radio
praxent.comtim@praxent.com@PraxentSoftware
OBSERVE ORIENT DECIDE ACT
The most important
person in strategy is…
the customer.
praxent.comtim@praxent.com@PraxentSoftware
OBSERVE ORIENT DECIDE ACT
Before… After…
praxent.comtim@praxent.com@PraxentSoftware
1Research from IAG Consulting.
2The Standish Group International Inc. 2002.
64% of software features
are never or rarely used2
and…
68% of enterprise
software projects
fail1
OBSERVE ORIENT DECIDE ACT
praxent.comtim@praxent.com@PraxentSoftware
AHA!	We’re	not	in	the	
software	development	
business.	We’re	in	the	
software	certainty	
business.	
…what	business	are	you	
in?
Hint:It’s about
difference&relevance
OBSERVE ORIENT DECIDE ACT
praxent.comtim@praxent.com@PraxentSoftware
OBSERVE ORIENT DECIDE ACT
Who, therefore are
we selling to?
praxent.comtim@praxent.com@PraxentSoftware
Pick
Your
Mental
Model
OBSERV ORIEN DECID ACT
praxent.comtim@praxent.com@PraxentSoftware
“What is
Strategy”
–Michael Porter
praxent.comtim@praxent.com@PraxentSoftware
We have
confused
operational
effectiveness
for strategy.
Operational
effectiveness
Strategy
praxent.comtim@praxent.com@PraxentSoftware
Total Quality
Management
Six
Sigma
ProductivitySupply Chain
Management
Objectives Based
Management
Just-In-Time
Inventory
Lean
Operational
effectiveness
praxent.comtim@praxent.com@PraxentSoftware
Operational effectiveness is
about being better.
Strategy is about
being different.
vs
Sustainable
advantage
“Strategy is the creation of a unique and valuable position,
involving a different set of activities.”
praxent.comtim@praxent.com@PraxentSoftware
praxent.comtim@praxent.com@PraxentSoftware
Variety-based Needs-based Access-based
Model: Strategic Positioning
– Michael Porter, Havard Business Review
Performing different activities from rivals, or
performing similar activities in different ways.
OBSERV ORIEN DECID ACT
praxent.comtim@praxent.com@PraxentSoftware
Serving few needs
of many customers.
…a choice of product or service
varieties rather than customer
segments.
OBSERV ORIEN DECID ACT
Variety-based
praxent.comtim@praxent.com@PraxentSoftware
OBSERV ORIEN DECID ACT
Variety-based
…does not rely on any
customer differences.
praxent.comtim@praxent.com@PraxentSoftware
Serving broad needs
of a few customers.
…some groups of customers need
different amounts of info, support,
and services…and have different
price sensitivity.
Needs-based
OBSERV ORIEN DECID ACT
praxent.comtim@praxent.com@PraxentSoftware
Luxurious
show-room?
No
Best-in-class
quality?
No
Helpful
sales staff?
No
praxent.comtim@praxent.com@PraxentSoftware
Bessemer Trust
Co.
Citibank
Minimum $5M $250K
Clients :
Advisors
3:1 125:1
Meetings On yacht / ranch In bank
Advisor-focus
O&G, aircraft,
racehorses
Loans
Needs-based
praxent.comtim@praxent.com@PraxentSoftware
…they picked a different who.
Needs-based
praxent.comtim@praxent.com@PraxentSoftware
Serving broad needs of
many customers in a
narrow market.
Hint: The key here is about
access to that market.
Access-based
OBSERV ORIEN DECID ACT
praxent.comtim@praxent.com@PraxentSoftware
Access could mean: geography,
customer scale or anything else that
requires you to reach that customer in
a different way.
OBSERV ORIEN DECID ACT
Access-based
praxent.comtim@praxent.com@PraxentSoftware
…like variety-based,
doesn’t rely on
differences between
customers.
Access-based
OBSERV ORIEN DECID ACT
praxent.comtim@praxent.com@PraxentSoftware
Unique subset of
services / products.
Specific group with
unique needs.
Exploit access to
unique markets.
Recall: Strategy is
about difference.
Variety-based Needs-based Access-based
praxent.comtim@praxent.com@PraxentSoftware
Notice they all center
around customer needs.
praxent.comtim@praxent.com@PraxentSoftware
Jobs to be Done
–Clay Christensen
OBSERV ORIEN DECID ACT
praxent.comtim@praxent.com@PraxentSoftware
“Strategy is just a matter of picking
what problems you want to work on
in the future…success simply means
you get better problems.”
- Ari Weinzweig, Zingerman’s Deli
praxent.comtim@praxent.com@PraxentSoftware
Organizational
Psychologist and
author of The
Hierarchy of Needs.
praxent.comtim@praxent.com@PraxentSoftware
Founder & CEO, Joie De Vivre Hospitality. Modified
Maslow’s model of human psychology for use at Joie
De Vivre and authored a book about it called “Peak.”
Chip Conley
praxent.comtim@praxent.com@PraxentSoftware
3 Maslow Pyramids in
Every Business
Customers
Employees Investors
praxent.comtim@praxent.com@PraxentSoftware
Customer Pyramid
Creates customer
satisfaction
Creates customer
commitment
Creates customer
evangelismMeets customer’s
unrecognized needs
Meets customer’s
desires
Meets customer’s
expectations
praxent.comtim@praxent.com@PraxentSoftware
Employee Pyramid
Creates
employee base
motivation
Creates
employee loyalty
Creates employee
inspiration
The work I do is
meaningful beyond profit.
I value being recognized
for my contributions to
my company.
I feel that I am fairly
compensated for
the value that I
produce.
praxent.comtim@praxent.com@PraxentSoftware
Investor Pyramid
Transaction
alignment creates
trust
Relationship
alignment creates
confidence
Leaving a legacy
creates pride of
ownershipI’m proud to be contributing to a
purpose that matters - making an
important difference in the
market.
I am aligned with the values and
approach of the company and enjoy
my relationship with the management
team.
My investment makes
an acceptable return.
praxent.comtim@praxent.com@PraxentSoftware
praxent.comtim@praxent.com@PraxentSoftware
The Discipline of
Market Leaders
No company can succeed
today by trying to be all things
to all people.
Choose your customers &
narrow your focus.
We must instead find an
uncommon value that to deliver
to a chosen market.
praxent.comtim@praxent.com@PraxentSoftware
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
praxent.comtim@praxent.com@PraxentSoftware
Focus: 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.
praxent.comtim@praxent.com@PraxentSoftware
• 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
Focus: total solution development, results
management and relationship management
Relationship
Management
Knowledge
Management
praxent.comtim@praxent.com@PraxentSoftware
• 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
Focus: product supply and basic service,
streamlined to minimize cost and provide hassle-
free service.
Quality
Cost
Speed
praxent.comtim@praxent.com@PraxentSoftware
praxent.comtim@praxent.com@PraxentSoftware
While productivity is a goal, originality
and quality are the goals.
Creative
interactions
Quality
management
Retaining & hiring the
best
Knowledge
management
Push decisions down to the
lab
Employee
centered
Product Leadership Example
praxent.comtim@praxent.com@PraxentSoftware
Best price? Hardly.
Best products? Nope.
Latest technology? Negative?
Customer Intimacy Example
praxent.comtim@praxent.com@PraxentSoftware
It’s all about the total solution and
the customer relationship.
Security
monitoring
System
maintenance
Cost
managementMobile strategy Maintenance &
support
Network management Redundanc
y
Planning new
apps.
Customer Intimacy Example
praxent.comtim@praxent.com@PraxentSoftware
Cultivate 1-on-1 relationships? Negative?
Low cost, most convenient offer? Definitely.
Product innovator? Nope.
Delivery innovator? Heck yeah!
Key competency? Capital allocation & execution
Operational Excellence Example
praxent.comtim@praxent.com@PraxentSoftware
What business you’re in has
nothing to do with you!
OBSERV ORIEN DECID ACT
praxent.comtim@praxent.com@PraxentSoftware
OBSERV ORIEN DECID ACT
praxent.comtim@praxent.com@PraxentSoftware
OBSERV ORIEN DECID ACT
praxent.comtim@praxent.com@PraxentSoftware
A Case Study
praxent.comtim@praxent.com@PraxentSoftware
Democratize the skies!
They picked the 85%.
3LF’s:
Low Fares.
Lots of flights.
Lots of Fun.
Needs-based
praxent.comtim@praxent.com@PraxentSoftware
They made trade-off decisions…
no meals unassigned
seats
no interline baggage
checking
no first or business-
class service
only offers direct
booking
only 737’s
no booking
software
Short-haul flights only
praxent.comtim@praxent.com@PraxentSoftware
But a strategic position is not
sustainable unless there are trade-
offs with other positions.
Trade-offs occur when activities
are in-compatible.
praxent.comtim@praxent.com@PraxentSoftware
What makes strategy so hard?
Straddler’s Dilemma
praxent.comtim@praxent.com@PraxentSoftware
You can say no when you
have a really powerful yes.
–Unknown
“
praxent.comtim@praxent.com@PraxentSoftware
Thank you
http://bit.ly/1QK7Qag
tim@praxent.com

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