Business Rocks – The Most Difficult Strategy Decision

One of the most liberating, yet most difficult strategic decisions you will make is to choose your competitive strategy. Read on to find out more

This week’s riff: One of the most liberating, yet most difficult, strategic decisions you will make is to choose your competitive strategy. How you will develop and exploit specific competitive advantages in your market?

The way I put this decision to my clients is to ask,

How do you want to win and what do you want to be famous for?”

I then offer my clients five generic competitive strategy options.

(1) the best product range

(2) the best service

(3) the most convenient experience

(4) the lowest prices or

(5) the most personalized solutions?

Recently, I received a common answer from a retail client. “Yes,” the CEO replied, “We want to be all of those things.”

The problem with trying to win on all fronts is that you’re unlikely to have the resources, skills and bandwidth to deliver effectively. What’s more, a business focused on offering low prices tends to require a very different organization to one that is seeking to offer the best possible product range or the best service.

The truth is that if you try to win on all five fronts, you will find yourself stuck in the middle. The world’s top organizations make clear choices about how they wish to differentiate their business. They focus on one, or possibly two, of these dimensions and although there are infinite strategy variations – here is a sub-list of 25 ways to lead your market I recently blogged about – they are all based on these five generic strategic options.

So, which strategy should you be pursuing? The answer is likely to be found by understanding where your organization’s capabilities, the key needs of your customers, and your own passions meet.


Where is that intersection for your business?


Off The Record: Caught In The Middle by Cerys Matthews

Been crying a little

Been caught in the middle

It’s something you’d hate to admit to

But you are the only one

Who can show you’ve been sad and lonely


© Stuart Cross 2017. All rights reserved.

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Strategy Is A Contact Sport (Part 1)

This is the fifth in a series of articles that builds on my strategy manifesto that I posted a couple of weeks ago.

Are your managers delegating to consultants the overall strategy itself? Such reliance creates the following problems for executive teams..... read on...

As a consultant myself I know that, done well, working with external consultants can add real value to the development and delivery of your business strategy. The problems arise, however, when CEOs and their executive teams start to rely on these consultants for strategy, rather than working with them as partners. This means that instead of asking the consultants for help with process and for input on ideas, managers end up delegating to the consultants the overall strategy itself.

Such reliance creates the following problems for executive teams:

  • Lower levels of management involvement and ownership.

    Developing and executing a great business strategy can be time-consuming and hard work. But it is a key job of your managers, and, behind all the jargon, is less difficult to do than many managers believe. By all means get external support where this makes sense, but a commitment to action is driven by a sense of ownership of the strategy, and that sense of ownership is, in turn, driven by involvement. The most successful businesses I have worked with all have a huge sense of ownership of their strategy, and although their top team may work with external advisors, it is the leaders that take the lead in setting the direction, determining the big goals and taking accountability for their delivery.

  • A focus on analysis ahead of action.

    Many consultants have followed a traditional business school education, which emphasises analytical tools and approaches. Unsurprisingly, these consultants tend to focus their efforts on analysing data and producing information packs – often 100 pages or bigger! – rather than helping the company’s managers and teams to take action. It’s not that the analysis is not accurate, but that it just doesn’t help move the business forward.

  • A me-too strategy.

    Consultants, under pressure to demonstrate their expertise, share their knowledge of their clients’ key markets. They identify what others have done to succeed as the basis of their recommendations for growth. Their insights and recommendations are fine as far as they go, but they will not create true distinctiveness. It is difficult to imagine an external consultant recommending breakthrough business ideas such as Apple’s iTunes, Facebook. Or, in a previous decade, Renault’s distinctive design of its family of automobiles.


In my book, The CEO’s Strategy Handbook, I met with Dennis Sadlowski, the former CEO of Siemens USA. Dennis hit the nail on the head when he said that strategy implementation only worked if the executive team were fully engaged with the strategy. He continued,

Engagement starts with involvement, and I ensured that the excutive team and key managers at the next level were intimately involved in the development of our growth strategy. We didn’t rely on external consultants to tell us the way forward; we led the work ourselves, doing our own blocking and tackling to make sure we understood the detail.”


By all means work with trusted consultants to aid and accelerate your strategy process. It offers ideas and challenges to your company’s internal thinking and priorities. But do not let the consultants take over. Do not be afraid of strategy but get out there and make sure that you are in the driving seat. But not the back seat, when setting the future direction of your organization.


It’s the only way that it will succeed!


© Stuart Cross 2017. All rights reserved.

Posted in Leadership, Speed and Pace, Strategy | Leave a comment

Business Rocks: Learning From Failure

Does your organisation take the airline industry's institutionalised approach to learning from failure and use that as a springboard to improvement?

This week’s riff: Earlier this week I had the pleasure of meeting with executives from a fast-growing snacking business. What struck me most from our discussions was the company’s willingness to accept failure as a learning opportunity and its committed to ongoing experimentation and prudent risk-taking as their fastest route to growth.

The company is developing new snacks continuously and. If a new line receives a negative reception, it is quickly changed or dropped. The whole operating system is designed to deal with new and different lines; it expects failure and is built to exploit rather than resist it.

Our willingness and ability to learn from failure is the subject of a recent book by Matthew Syed, called Black Box Thinking. In the book, Syed compares and contrasts the healthcare industry. It does little to accept failure and has, therefore, a poor track record in understanding patterns of errors. Or systematically addressing them. With the airline industry, where failures, both large and small, are shared publicly and are seen as an opportunity to learn and improve.

Whether we’re talking about individuals, teams or organisations, the clear conclusion from Black Box Thinkingis that, in Syed’s words, “We progress fastest when we face up to failure – and learn from it.

So, what about you and your organization. Are you more like the healthcare industry or do you, like the snacking business I visited, take the airline industry’s institutionalised approach to learning from failure? Using that learning as a springboard to improvement and growth?


Off The Record: Get It Right Next Time by Gerry Rafferty

You’ve got to grow, you’ve got to learn by your mistakes

We’ve got to die a little every day, just to try and stay awake

When you believe there’s no mountain you can climb

And if you get it wrong you’ll get it right next time


© Stuart Cross 2017. All rights reserved.

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Business Rocks – What’s Your Manifesto?

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This week’s riff: Parliament reopened this week with the Queen’s Speech, setting out the legislative programme that the new government will pursue over the next two years. The programme was based on the Conservative Party’s election manifesto, widely regarded as one of the worst of recent times. Given the loss of the party’s parliamentary majority it was unsurprising that many items from the manifesto were either watered down or dropped.

But does the fact that the Conservatives’ manifesto was a vote-loser mean that manifestos should be avoided? I believe just the opposite. The Tory manifesto allowed people to make a clear choice. Without a manifesto people would simply vote based on personality and gut feel, not specific actions.

If you want to lead change in your organization or team, some sort of manifesto is a great way of engaging your people and giving them clarity about the future. When Richard Baker became the CEO of Boots the Chemists, for instance, one of his first acts was to give his new executive team a memo that set out the behaviours he expected from his closest colleagues (You can read an edited version of it here). It was, in essence, his leadership manifesto, and one that people were happy to follow.

Recently, I have written my own strategy manifesto – see here – and the process of writing it has helped me better understand my own beliefs and will allow me to deliver even better strategy programmes for my clients.

So, how about you? What is your manifesto for change? And how will you ensure that it is a vote winner that leads to higher levels of performance for your organization?

Off The Record: Manifesto by Roxy Music

Hold out when you’re in doubt

Question what you see

And when you find an answer

Bring it home to me

© Stuart Cross 2017. All rights reserved.

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25 Ways to Lead Your Market

Here are 25 ways you can lead your market. Which of these would best drive the profitable growth and success of your business?

In yesterday’s post – see here – I set out that you had to be #1 in your market, in some form, or risk your ability to grow and thrive.

But what are the different ways you can lead your market? Critically, it doesn’t need to be simply market share, though that can help. Rather, your form of leadership should be sufficiently attractive to your customers that it generates the returns necessary for your business to thrive.

Here are 25 ways you can lead your market. Which of these would best drive the profitable growth and success of your business?

  1. The biggest overall market share
  2. The biggest share of a particular city, region or country
  3. The most profitable player
  4. The biggest geographical reach (most countries served)
  5. Leadership of a particular channel
  6. The biggest share of a particular customer or market segment
  7. The lowest prices in your market
  8. The highest prices in your market
  9. The highest quality products
  10. The biggest range and choice
  11. The fastest turnaround and delivery time
  12. The most enjoyable customer experience
  13. The friendliest service
  14. The most expert service
  15. First for the latest fashion trends
  16. The most personalised and bespoke products, services and solutions
  17. The very best deals and offers
  18. The most hassle-free customer experience
  19. The coolest designs
  20. The most convenient locations
  21. The best customer rewards
  22. The greatest level of product and service innovation
  23. The most satisfied and loyal customers
  24. The most customers served
  25. Famous for going the extra mile


© Stuart Cross 2017. All rights reserved.

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#1 or Gone: Why You Must Become A Market Leader

Winning Business

Which airline is the #1 player?

If you ask this question in the USA, you’ll probably find that Southwest Airlines is the leader, while in Europe it’s Ryanair. If you look at long-haul flights then Singapore Airlines is often passengers’ first choice, particularly if they’re flying first class. Alternatively, Turkish Airlines has flights to the most countries, but American Airlines is the biggest and most profitable airline business of all.

All of these airlines can claim to be #1, even though they serve different markets, offer different propositions and have created different sets of competitive advantages.

FlyBe, on the other hand, has no claim to be #1. It’s a nice enough airline, but is unable to beat Ryanair at the low-fare end of the market and is unable to complete with the full-fare airlines on the provision of a high-service experience on European flights. Unsurprisingly, FlyBe is losing cash and has recently posted a £20 million loss.

It’s the same in other industries. Unless you are #1 in your market, it’s likely that you will struggle to generate the revenues and profits necessary for you to thrive. Like FlyBe, you will simply be locked into a cycle of anaemic profits, periodic losses and the constant threat of failure.

The good news is that you don’t necessarily need to be the biggest player in the market to be a leader that can thrive. As with the airline industry, there are different ways to achieve that status.

Here are the three questions you must answer to determine your route to market leadership:

  1. What is your playing field? Every company operates on a different playing field. Your playing field comprises four elements:  the products and services you offer, your target customers, your geographical reach and the channels you are using to reach your customers. What is the playing field that you wish to create? Ryanair’s playing field is to provide short-haul flights to Europe’s budget-focused travellers, while Singapore Airlines is more focused on business and high-income global flyers.
  2. How will you win? You must then choose how you will win in that market. Are you going to be the lowest price operator, like Ryanair or the service leader, like Singapore Airlines? Alternatively, you may wish to be the convenience leader (e.g. Amazon, McDonalds), the product leader (Apple, BMW) or the solutions leader (IBM, McKinsey) of your particular market.
  3. Will your strategy deliver sustainable returns? A desire to be Nottinghamshire’s #1 airline may enable you to become a #1 player in that market, but if the market isn’t attractive enough – and, as far as I know, the passenger demand for flights from Worksop to Mansfield is not that high! – it’s unlikely that you’ll be able to deliver the returns needed for sustainable success. Similarly, an ambition to be China’s #1 airline may seem attractive, but if you haven’t got the assets, relationships or know-how to compete effectively in that market, it’s unlikely that you will be able to turn your ambition into reality.

Without a commitment and strategy to becoming and remaining a true market leader you will struggle to survive, let alone thrive. But, by identifying a sustainable way to lead your own particular playing field you can justifiably claim to be #1.

How will you become your market’s #1?

© Stuart Cross 2017. All rights reserved.

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Business Rocks: 80-15-5

Growth Riffs Logo

This week’s riff: I was sharing a strategy proposal with a potential new client this week, when he asked me how much time the work would demand of him and his top team. I told him that it would need between 3-5 days of dedicated time over 6 weeks to deliver the results we’d agreed. “Oh dear,” he sighed, “I don’t think that we can spare that much.”

All of the highest-performing businesses that I have worked with are led by executives who are able to balance short-term and longer-term demands. One particularly successful CEO told me that he uses the 80-15-5 rule. That is, he and his team spend 80% of their time focused on delivering this year’s results, 15% on ensuring they deliver next year’s results and 5% working on ideas that will only land beyond the next two years.

Taking that CEO’s model and assuming that you work 2o0 days each year, that means that you should be spending 30 days a year developing and delivering ideas for next year’s success and 10 days on ideas that will drive your organization’s performance beyond the next 24 months. In other words, you should be spending around a day a week working on the longer-term growth of your company.

I’m still waiting to see if I’ve been successful in persuading my buyer that the time spent on developing a focused and coherent strategy that his entire leadership team can own and drive will be well invested. But, in fast-changing and dynamic markets, it’s difficult to see how, if you’re solely and continuously focused on the next quarter’s results, you can expect longer-term success to be achieved.

So, how close to the 80-15-5 model do you get? And how many days each week, month and year do you and your leadership team spend on developing and delivering your organisation’s longer-term success?

Off The Record: In The Year 2525 by Zager and Evans

In the year 5555

Your arms hanging limp at your sides

Your legs got nothing to do

Some machines doing that for you

© Stuart Cross 2017. All rights reserved.

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Remember, Nothing Fails Like Success

There are three factors which sew the seeds of failure in successful organisations. It's always worth remembering that nothing fails like success

Many companies struggle and fail, not because they are bad at what they do, but because they are great at what they do. Look at Kodak, for example. Its decline didn’t result from the company being poor at film processing. On the contrary, the company’s success has stalled precisely because it is great at film processing. And it’s the same with many other companies.

There are many other examples: Nokia, Olivetti, Blockbuster, The Gap, M&S, HMV and virtually every British motor company have struggled or failed because they’ve been unable, or unwilling, to change as quickly as their markets.

There is nothing written in stone to suggest that Apple, Tesco, WalMart, Google or even Coca-Cola will be protected from future demise. My hunch is that several of them will struggle or even disappear in the next few decades.

There are three factors which sew the seeds of failure in successful organisations. Often these factors appear in combination rather than independently, but it is useful to separate them to understand the dynamics at play.

  • Arrogance.

    Success can breed a belief that you will always be successful and have a right to further good times ahead.

  • Defensiveness.

    Some companies see strategy as establishing a strong position in the market and then seeking to maximise their performance from it, rather than an ongoing journey of value creation.

  • Business model inertia.

    Perhaps harder to change quickly is the inertia of a company’s business model. Even when managers do not display arrogance and are not defensive, the complex web of processes, capabilities, assets and cultural approaches that drove market-leading performance is not easily changed overnight.

So how do you ensure that your company continues to climb the growth curve, and avoids hitting a performance plateau or decline? Here are five steps you can take:

  1. Look out for the ‘weak signals’. 

    Understanding the dynamics in your market is critical in anticipating the need for change and responding accordingly. All too often, change is only introduced once profit performance has already eroded. Though the signs of decline – in terms of customer feedback, innovation performance, the rate of market share growth or the growth of a new, disruptive rival may have been evident several years earlier. You must be more attuned to these early warning signs. As former Intel boss Andy Grove put it, “Only the paranoid survive”.

  2. Raise the bar continually.

    It’s important to recognise and celebrate success, but don’t let it go to your head. All market leaders need to set increasing standards for success or their competitors will do it for them. In 2003, for example, the England rugby team won the world cup. However, by focusing on victory at that tournament as the ultimate goal for the team, it was difficult for the new management to subsequently raise the bar and the team’s performance quickly declined.

  3. A focus on action.

    The best lesson for focusing on action is this quote from Michael Bloomberg, from his book, Bloomberg on Bloomberg, “While our competitors are still sucking their thumbs trying to make the design perfect, we’re on version No. 5. By the time our rivals are ready with wires and screws we’re on version No. 10. It gets back to planning versus acting: we act from day one; others plan how to plan – for months.”

  4. Cannibalise your own sales.

    Defensiveness is a key factor in turning market leaders into also-rans. At the heart of this mindset is reluctance, bordering on refusal, to cannibalise your own sales. The trouble is that, in a dynamic market, if you don’t cannibalise your sales you will be overtaken by other players. Apple has brilliantly overcome this issue in the way it has managed the market strategy of the iPod and the iPhone. Gilette has done something similar with its series of razor improvements.

  5. Reinvent your business model. 

    Innovation at a product level is admirable and necessary. Innovation at the level of your strategy and business model requires a far bolder mindset. I admire UK electrical and electronics retailer DixonsCarphone. They operate in a highly competitive market and have made bold moves over a series of decades to stay relevant and profitable. Twenty years ago they launched new formats such as The Link (for mobile phones) and PC World. Along the way, they launched Freeserve, which changed the face of UK internet participation. In recent years they have removed the Dixons brand from the high street, developed the KnowHow brand and merged with Carphone Warehouse. Although these moves do not guarantee future success they have helped the company keep up with the pace of change. And sometimes to lead the market.


Which of these five approaches will help you ensure that your success does not create the seeds of future failure?


© Stuart Cross 2017. All rights reserved.

Posted in Growth, Leadership, Nothing Fails Like Success, Speed and Pace, Strategy | Leave a comment

Cross Shots: The Power of 6000

The power of the 6000 opportunities to talk strategy for your business.

© Stuart Cross 2017. All rights reserved.

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The Customer’s Not Always Right, But That’s The Way To Bet

hotel service

In dynamic, turbulent and fast-moving markets, driven by almost unbelievable technological advancements, you can easily become distracted by the noise and activity in your markets and forget this critical business truth.

You do so at your peril.

Like a party of trekkers in the Himalayas who stay physically close to their guides during the raging storms that can descend unexpectedly in the mountains, you need to stay close to your customers at all times. They can guide your next steps and help lead you to a successful outcome.

Customers may not set your destination or the mountain you choose to climb, but they can provide the necessary navigation to help you arrive safely – if you let them.

So far, so obvious, but how many companies stay close enough to their customers, listen hard enough to their customers and act quickly enough on the guidance they’re given, to enable them to either lead their markets or at least move faster than their competitors?

In my experience the answer is remarkably few. Even huge organizations with seemingly bottomless marketing budgets can spectacularly fail to respond to their customers’ changing needs and desires.

Some companies, though, really do put customers at the heart of their organisation. Since 2010, DFS, the UK’s largest sofa retailer, has revolutionized its approach to focusing on and managing customer feedback. Using a Net Promoter Score system (for details see here), the company has grown its sales, profits and market share on the back of these actions:

  • The company collects over 200,000 separate customer reviews each year, covering various stages of its customer experience – pre-sale, point of sale, point of delivery, 6-months post-delivery and following a customer service issue. This represents a response rate of over 10%;
  • Each sales consultant, store team and manager, area, region, delivery team and individual members, the in-house factory teams and the on-line team and call-centre service team receive weekly NPS reviews, and their performance bonuses are directly based on their average NPS scores;
  • The executive team review overall NPS performance each week alongside sales, with actions identified for immediate resolution. Similarly, the monthly board meeting contains a review of the company’s NPS performance;
  • Any individual customer score of 6 or below results in a notification to the relevant store manager, who is expected to follow up with the customer, with central management follow up of how the issue has been dealt with taking place shortly after;
  • The system has been designed to ensure that customers’ answers are as honest as possible. Here are three steps they’ve taken to ensure the integrity of the data:
  • DFS provides a charitable donation for every response received. The director responsible, Andrew Stephenson, found that the previous method of encouraging responses, which was to enter respondents into a prize draw, had slightly skewed responses upwards, whereas a charitable donation had no such impact;
  • The entire system is administered by an independent third-party marketing agency, which is highlighted on all emails. Again, this has been found to improve the quality and integrity of customer responses; and
  • The system is email based, but for those customers where no email is collected, the marketing agency takes their mobile phone numbers to gain a sample of results from these customers to ensure that their views are in line with the majority of email customers and also ensures that individual sales consultants are not ‘gaming’ the system.

In other words, the NPS system that DFS has developed has become the oxygen that is breathed across the business. Rather than pursuing the development of large but intermittent initiatives that tend to follow annual customer surveys, the DFS system allows managers and colleagues from across the organization to make thousands of individual decisions every day that, together, have transformed the company and enabled it to be truly customer-centered.

How is your company receiving, monitoring and acting on real-time customer feedback so that you can grow your business and achieve your goals in the fastest, most sustainable way you can?

© Stuart Cross 2017. All rights reserved.

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