• Innovative Strategies That Create More Profits

Category: Strategy/Story Private

What Is A Strategy?

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The basic definition of strategy is overcoming obstacles. Following  is the definition of strategy according to Richard Rumelt, the professor at UCLA and recognized as an exceptional strategist, “The core of strategy work is always the same: discovering the critical factors in a situation and designing a way of coordinating and focusing actions to deal with those factors.”

Strategy is a term that has been so widely used that its meaning has been diluted to the point that many CEOs define it as a goal or mission statement. Strategies are not goals or mission statements. Strategy is a cohesive response to an important challenge.

Also, you cannot have a strategy if you don’t have implementation. If your strategy does not have a plan of coherent action it is missing an important part of the strategy.

A good strategy according to Rumelt has a logical structure that he calls the “kernel. This kernel consists of three parts: a diagnosis, a guiding policy, and coherent action. 

The guiding policy specifies the approach to dealing with the obstacles called out in the diagnosis, It defines the general way forward but without specific details.

Coherent actions are feasible coordinated policies, resource commitments, and actions designed to carry out the guiding policy.

Once you understand the definition of strategy, diagnosis, general policy, and coherent action, you will be able to detect bad strategies. And there are plenty of bad strategies around. Many people treat strategy as goal setting rather than problem-solving

A good strategy doesn’t just draw on existing strength, it creates strength through the coherence of its design. The creation of new strengths is done through subtle shifts in viewpoint.

Now, when you think of strategy, think about the kernel –diagnosis, general policy, and coherent action. Does your strategy include those components?

How to turn negative problems into positive results

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If you are in business, problem-solving is a constant part of your business life. No problem is simple, or it wouldn’t be a problem. Some problems are critical to the success of your company. One way to make solving problems easier and more effective is to turn a negative problem into a positive result. 

Start the process by answering the question, “what is your goal?” Is this problem important enough to spend time and energy on it? If yes, you need to state the problem in writing so it is clear and you can focus on it. For example:

  1. How could we differentiate our product or service from competitors?
  2. What new product should we be developing?  
  3. How can we improve our service?

Next, turn the problem into a challenge statement.  

Michael Michalko, in his excellent book, “Thinkertoys,” explains this creative process and that the challenge statement has to be written as a positive challenge. For example, “why have revenues slowed down?” focuses on finding the negative reasons. But, if you restate the problem into a challenge such as “In what ways might I get customers to buy more?” you focus on finding positive answers. 

For each problem or challenge, state your problem as a positive challenge or statement. For example, instead of: 

  1. Old statement: “How can we reduce costs to improve cash flow? New positive statement: “How could we boost margins on current offerings?’   
  2. Why can’t we stay on plan?” vs. “What could we do to meet consistent deadlines? 
  3. Why is onboarding so complicated?” vs. “What could we do to simplify onboarding?”  

Note: Mr. Michalko recommends your challenge statement use the phrase. “In what ways might I …..? He also recommends spending time on crafting your challenge statement. The more time you spend refining your challenge statement, the closer you will be to the solution.

You should be able to generate many different answers or ideas from these questions. Make a list of every idea, and select some that you think have promise. 

Then, substitute keywords to broaden your view. 

Identify keywords in your challenge statement and substitute other words for them. For example: instead of reducing costs, use eliminate costs. Instead of boost margins use to raise prices. Each word change should give you a broader view of the problem, a different viewpoint, and different ideas. Keep making word changes until you run out of ideas. Your success in creating new problem-solving ideas depends in part on how you define your problem. 

You can also create broader perspectives by asking “Why? to each of your ideas or answers. For each “answer”: Why do you want to improve your service? Then, Why do you think improving service will add value? Then, Why will this value enable us to increase prices? Etc.  

Now, break your Broadview down to specifics.

With all this information, you can now get down to specifics by breaking each answer into subcategories. These subcategories will generate even more ideas. For example, “When will this new product be ready?” Who could design the new product? These kinds of questions will give you more ideas and make it easier to solve the problem. 

Conclusion

This thinking process enables you to restructure existing information into new patterns and ideas and turn these problems into opportunities. You start with your goal, identified the problem, and then turn the problem into a challenge statement which you can analyze in several depths enabling you to create solutions.

 

How To Get Product Validation And Commitment

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If you haven’t read Part One, you need to do that before reading Part two. Part one is about how you interview people to determine if the problem you believe you are solving is really a problem people want and are willing to pay you to solve it.

So, now that you have nailed down the problem, spent time diagnosing the problem, and have an insightful product solution, it’s time to see what your potential customers think of your solution.

This second phase of questing is to validate your solution or product. It’s time to talk to people again (the same or others) to see if they agree with your solution and are willing to give you some commitment.

You will also have taken a preliminary look at your business model as part of your overall vision. You should layout the business model canvas to visually see the entire business and make changes and decisions as you develop more knowledge.

Introduce product

Now you are going to show them your product. So you are fighting the same problem as before of getting false information or compliments rather than facts. But the good news is you now have a product idea, and you can and must ask for some commitment.

At this point, your product or service can be a drawing, a slide show, a prototype, an animated whiteboard, or anything that will illustrate the product. You do not need a full-blown minimally viable product (MVP) at this time.

You will talk to people, and if they are a serious prospect — meaning you are getting real facts, not just opinions — you can go home and modify your product. Then talk to the next prospect. When your information starts to repeat, you can make that MVP.

Remember, if you are not embarrassed with your first product, you waited too long. This process should not have a firm milestone date as you will be modifying the product and your business model basically after each interview until the information repeats.

You need a commitment if you want real facts

By commitment, we mean are they showing they’re serious by giving up something they value — their time, money, or reputation.

  • time (maybe a longer meeting with everyone to explain the product in-depth),

  • reputation (referring you to someone else you should talk or

  • money (some step that gest them closer to purchasing)

 Note; if the person remains friendly, but you realize they are not going to buy, they can give you lots of wrong signals. That’s why getting some commitment is necessary, so you have facts, not opinions.

Meetings either succeed or fail.

There is no such thing as a meeting that went well. At this point, meetings either succeed or fail. You have lost when you leave the meeting with a compliment or stalling tactic (e.g., let’s talk again after the holidays)

A meeting succeeds when it ends with a commitment to advance to the next step.  Rejection is also real information. One opinion is not going to derail the company. You have to look at it as good news. Maybe your product won’t sell. If so, you have saved a lot of time and money. Not asking is a real failure. Commitment shows they care. The more they are willing to give up, the more seriously you can take what they’re saying.

Following  are some examples of good and bad meetings:

“Looks great. Let me know when it launches”. (bad meeting)

“There are a couple of people I can introduce you to when you are ready” (so so meeting)

“What are the next steps” (good meeting)

“I would definitely buy that” (bad meeting)

Conclusion

Remember, You will not know if your product or service could be a winner until you’ve given them a chance to reject you. Then you will know you have real facts on which to build your business. Also, keep having meetings until you stop hearing new stuff.

How To Validate The Problem And The Pricing Of Your Idea

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Entrepreneurs are almost always sure they have a product or service idea that will sell like hotcakes. But just to be safe, they tell their Mom the idea and ask what she thinks. Guess what? She thinks it’s a great idea. She may not be sure, but she doesn’t want to hurt your feelings or dampen your enthusiasm.

But if you are not convinced yet, ask a few more people. Most people start with people they know. They tell them their idea, their vision, and ask what they think. Do they think it’s a good idea? Do they think people will buy the product or service? Not surprisingly, these people also agree with your Mom. It is or it could be a good idea, and they think people will buy the product or service.

Great. Now you have some facts to back up your hypothesis. But you are still not 100 percent sure, so you find some people in your targeted market to interview. You repeat the process. Tell them your product idea and ask if they think it’s a good idea? And if they think people buy the product? Again, you get a positive response.

Now you are confident and ready to start developing the business. But, there is only one problem, you don’t have real facts upon which to build your business. The “facts” you have are only “opinions” from people who don’t want to hurt your feelings or dampen your enthusiasm. Just like your Mom, people want to be nice. Besides, they are not committed to buying it, so there is no downside for them.

Stop Using False Facts

If you start your business using these false facts, your chances of succeeding are not great.

But, there is an answer. Rob Fitzpatrick, author, and entrepreneur, started several businesses that failed using that kind of customer research. He finally realized what the problem was.

Most people do these interviews incorrectly. You have to know how to talk to customers in the right way to get real information. You can’t show them the product idea first and then ask questions. If you do, here are some problems he found:

  • We spend too much time collecting data that’s too unreliable for important decisions.
  • Sometimes we don’t realize the data we are collecting is worthless (even misleading)
  • Not all data is good data — and asking customers what they think of your idea almost always leads to bad data
  • We assume customer feedback is scientific and whatever they tell us is scientific and counts as learning. But, it’s easy to bias the people we are talking to. In fact, once you tell them you have an idea, they are already biased beyond repair because they don’t want to crush your dreams,

If people tell you your idea is bad, that’s not good data either. Why? People are bad at predicting both 1 which ideas are good and 2, what they, as customers, are going to do, buy, use in the future,

Even VCs are looked at as the best predictors, are wrong more than they are right. If they are worse than a coin toss, how seriously can you take anyone’s opinion?

Potential Customers are not responsible for showing us the truth, It’s our responsibility to find the truth, We do this by asking good questions. Good questions give us actionable insights because we never asked about our idea. In these conversations, only talk about their problems, how they impacted their lives, and how they solved them.

They will tell you the truth when they talk about themselves and past or current problems. Identifying and validating “the problem” is what you want. Your job is to determine if they have the problem you are trying to solve, and if that problem is painful enough, they are willing to pay money to solve it. Everyone has problems they know about but have a workaround or are not painful enough to fix them.

To Get The Information You Want, Ask Important Questions

Ask scary questions you have been unintentionally shrinking from. You can tell when it’s an important question when the answer could change or disprove your business. Don’t get stuck on the small things. Look at the big picture first. When you have the big picture, you can drill down on specific items.

Also, learn to love bad news. If you have $75k to start the business and you spend $3k finding out your idea isn’t going to work. That’s good news. You can’t build a business on lukewarm responses.

Don’t challenge anyone; you are there to listen

When you challenge the customer. “No, I don’t think you get it” They will say your idea is great if you are annoying enough. You can’t learn anything unless you are willing to shut up and listen, The More You talk, the worse you are doing,

Following are some of Rob Fitzpatrick’s examples of good and bad questions.

Do you think it is a good idea?

Bad question. Only the market can tell you if your idea is good or bad. Everything else is just an opinion and opinions are worthless.

Would you buy a product that did X?

Bad question. You are asking for opinions and hypothetical from overly optimistic people who want to make you happy. The answer is always yes which makes it worthless. If its about the future, it is probably worthless.

How much would you pay for Y?

Bad question. The number makes it feel scientific and true but people will lie to you if they think it’s what you want to hear.

What would your dream product do?

OK question. if you ask and follow up. Generally, people know what their problems are but don’t know how to solve them.

Why do you bother?

Good question. It gets you from a perceived problem to the real one. It helps you get to why and helps you understand their goals.

What are the implications of that?

Good question. It distinguishes between “I will pay to solve that problem” and “that’s annoying but I can deal with it”. Some problems don’t actually matter.

Talk me through the last time that happened?

Good question. Learning through their actions instead of their opinions. This provides insight and answers lots of questions like how they spend their days, what tools they use, who they talk to, constraints on their day. Now does your product fit into their day and life? What other products or software and tools does your product need to integrate with? Finding out about how someone does a task will show you where the problems and inefficiencies really are, not where the customer thinks they are.

What else have you tried?

Good question. What are they using now? How much does it cost and what do they love about it or hate about it? How much would those solutions be worth and how traumatic would it be for them to switch to a new solution? Note: People stop lying when you ask for money.

How are you dealing with it now?

Good question. This gives you a price anchor. It’s rare for someone to tell you precisely what they will pay you, they will often show you what it’s worth.

Where does the money come from?

Good question, This is a must ask in B2B businesses. Who has to approve, who has the budget, who influences the purchase.

Who else should I talk to?

Good question. End every conversation with this question. Is there anything else I should have asked? People want to help you. Give them an excuse to do so.

Conclusion

Your first job is to identify and validate a real problem that people will pay to solve. You don’t need compliments; you need real facts. Focus on the data you need to make your decision and avoid bad data.

Generally, people do not want to hurt your feelings and tell you what you want to hear. Find targeted people and have a casual conversation. During that conversation, ask good questions.

Do not tell the person you are interviewing about your idea. You are there to listen, not talk. Your job is to find out the problem. The next step is to find the solution prospects are willing to pay money to solve.

At this time, you are trying to identify and validate the problem. Keep having meetings until you stop hearing new stuff. Later, you will have additional conversations with them or others about your product.

This is the end of part one. Part two covers getting information on the product itself and the necessity of getting a commitment of some kind,

Storytelling In Businesses Is An Effective Sales Tool

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Why don’t more entrepreneurs use stories to explain their businesses?

The reason maybe they don’t understand the important benefits of storytelling in business

or how compelling stories are. But, defining and crafting a story takes time. Another misconception

is that stories are what the marketing department does.

True. But every employee should be able to tell the company’s story.

But your story needs to start long before there is a marketing department.

If it doesn’t, you could be trying to wordsmith your sales communications later for short-term

tactical gains because you don’t have a competitive advantage. Why?

Most companies have competitors, and everyone may be selling a similar product

at the same price with the same service.

Here is what Ben Horowitz, at venture capital firm Andreessen Horowitz, says:

“The mistake people make is thinking the story is just about marketing, No.

The story is the strategy. If you make your story better, you make your strategy better.”

The story is the engine that drives successful companies. And with today’s technology,

you can tell your story, many times for free, to individuals anywhere in the world.

That makes stories more important than ever.

 

Benefits Of A Storytelling Strategy

 

Stories will help you build and grow your company and your brand.

According to Kevin Smith, the world’s most valuable, innovative, and fastest-growing companies

know the story behind the brand regardless of age, industry, or size. (Airbnb, Apple, Facebook, Tesla, etc.) delivers success.

 

Or Simon Sinek, author of “Start With Why,” put it another way,

“Remember, people don’t buy what you do; they buy why you do it, And what you do simply proves what you believe.”

 

The following are some of the benefits you will get from a well-crafted story.

 

Stories help you develop and sell your idea. 

Stories simplify big ideas in a way that sticks in one’s mind.

Data can persuade people, but data doesn’t inspire them to act.

Stories help you attract and keep talent and then improve efficiency by keeping everyone on the same page.

Stories help you transfer your beliefs to your audience.

Stories help you keep all employees on the same page and focused on the same mission.

Stories give your company a short- and long-term advantage over competitors.

Facts are essential, but sories connect and motivate people.

People remember stories but not many facts.

 

Stories help you build a brand.

 

Stories  will build a foundation of trust, but a customer’s personal experience will cement

that trust into something that lasts,

Buyers often look to the story to justify the purchase.

Stories can raise the value and, therefore, the price you can charge.

You need a better story if you can’t get a higher price for your brand.

 

Stories help you market your brand to potential customers.

When done right, stories can significantly boost lead generation by many times normal.

Stories grow your sales pipeline — stories make it easier for your ideal customer to recognize your value.

Stories shorten your sales cycle and increase the sale ratio

Stories build your sales pipeline — stories make it easier for your ideal customer to understand your value

Stories Improve the quality of your sales forecast because they attract better-qualified prospects

 

If you are looking to take your startup to the next level, stories are a great way to accomplish that.

Jim Zitek 

 Innovative strategies that create more profits

How do you create a core story?

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 Your story cannot wait until you are ready to do marketing. It must be woven into your strategy from the very beginning.

Start by framing your story. Does it reflect the vision and values you are promoting?  You have to assume your competition has a story that you need to change. This analysis of the competition’s story takes time but is necessary. Then reframe the opponent’s story and reinforce your story to make sure you are not just restating your competitor’s story.

Keep it short and straightforward. Make sure it’s memorable and, therefore, easy to spread. Also, think about how you can encapsulate your message in a symbol, slogan, or metaphor that captures the essence of your story?

Make sure your story is emotional– includes values and deliver some emotional impact. One way is to articulate the  “hows” as verbs, not nouns.

You can start creating your story by going through the following suggestions. These are from Wodenworks, a brand strategy company. Start building your story by:

 

  • Identify the critical components of the company’s journey from initial problem to solution to results and transformation,

  • Define the “Whys” behind the story ( Why are we doing this? Why should I join the company? Why should I invest in this company? Why should you buy from this company? The answer to why is the company story.

  • Organize, arrange, and put the essence of your story in writing and share it with everyone and every department in your organization.

 

This process takes time, but the time required will more than pay you back for the time it took to complete this task, Once met it will give you direction, get everyone on the same page and help make decision making easier.

Here s another way to go through this process. Jim Logan, a long-time ma\rketer, offers this kind of approach to get at your core story.   y

 

  • Profile your best customers. That customer group can breakdown into smaller sales funnels.

  •  Identify the things you do for customers.

  • list all the things that are meaningfully different about your offer compared to other offerings with similar benefits (including every facet of your product and business operation from manufacturing to experience to responsiveness to the comprehensiveness of your solution to service and support),

  • list key features and functionality of things you sell ( and tie a benefit to each element and function)

  • Answer the Why question: should I believe you and why should I buy from you.

  •  Create your story from the material you have gathered

  • Test your story to make sure it does what you expect it to do. If not, revise it.

Next, let’s cover some of the story structures that will help you tell your story.

Story Structures

Several traditional story structures have been proven to work. Sometimes they have different names, but the structure is the same. At this point, we are using the core story we constructed to put that core story into a bigger picture.

You can use one of the traditional story frames that have proved themselves over the years, Here are the five frames you can use.

Quest is the most fundamental frame. In this scenario, the hero goes off to achieve a positive goal, but runs into a problem(s), generally finds a mentor, and then throughout the story reaches the goal.

The Stranger in a Strange Land is a much different story, The hero finds himself in a strange place where he is unsure of what to do (e.g., maybe a research task without any defined criteria), what the rules are, or even the path forward. But he runs into a mentor and finds a solution to something he didn’t know he was looking for in the beginning.

Rags To Riches is the classic story of stating out with nothing, and through hard work and some luck, you end up with fame and fortune.

Revenge is simply about a wrong done to the hero who, through no fault of his own, loses everything/. Then he prepares a plan and sets out to get revenge for the wrong done to him.

Love stories can be about both love found or love lost. For example, a new great partnership or a partnership being dissolved,

The main point here is that you can use one of these traditional story frames to help you create your own story without having to create a new frame of your own. Also, these are familiar frames that people know and understand, which makes your job and their ability to follow your story easier.

You now have a testable hypothesis. Does the story support the business model?

What Information To Put Into Your Story To Make It Successful?  

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What Information You Need To Put Into Your Story To Make It Successful?  

 

Every story starts with a problem. Don’t put more than the problem, solution, and success or result in your story.

OK, but what information do you need to put into your story to get the outcome you want. The story must, at a fundamental level, explain why you exist? Why does the market need your company? Why are we need this?  And why is what we are doing important?

What do you want to tell people? This information is the crux of your story and the real reason why people will buy from you or invest in your company.

Start by framing the issue. Don’t let our competition frame the issue. You may have to reframe the issue, so you are attacking the right problem. Does your core story articulate and reinforce the vision and values you are promoting to identify and solve the problem?

Different people have different ideas about what should go into your story. Here is one version. Your vision should be distilled into a single sentence, broken down into three parts:

1 What is the best action word describing what the brand is doing to serve the customer (empowering, teaching coaching,etc.)? Remember, you are not the hero of the story. You are the mentor showing the customer how to solve the problem.

2 Who do you want to hear your story? Be specific. The better you can target your audience, the more effective you will be. But, the audience has to be big enough for you to make a profit. Also, if your vision is clear, you will attract the audience you are seeking.

3 What is the outcome or transformation the customer will receive by using your product or service?  What are the benefits short-term and long-term, what are the consequences if the customer does not use your product or service?

Here is another way to look at what you should include in your story. Define the problem you want to address. It might be one huge problem or several problems you need to address separately.

1 Focus on addressing the problem and the challenges the problem causes the customer

2 The results or outcomes of solving that problem and the benefits the customer will receive.

3 Explain the difficulties the customer will have to go through to solve the problem in a way that brings the emotional aspects of getting to the solution. Is it relatable, believable, stressful yet transformational once accomplished?

One last thing. The end of the story is not the end; it’s the beginning of your relationship with the reader.

 

Why A Core Story Is Critical To Your Success

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Why A Core Story Is Critical To Your Success

When you look at startups that have developed into very successful companies, you find that one of the things that make them so successful is that they have a core story, which is also their strategy. These core stories sound deceptively simple but are extremely powerful. You should be able to tell your company’s story in one sentence or even a tweet.

Here are a couple of examples:

Google’s core story is Google: provides access to the world’s information in one click.

Apple’s core story is: Apple empowers individuals with well designed, easy-to-use computers.

Your target audience will be able to “get it” immediately if they don’t get it; they are probably not in your target audience. Once prospects understand who you are, what you do, and the benefits of what you do, expanding on your story is easy. You can direct the conversation in many different directions, depending on who’s in the audience.

Now, you need to implement this core story/strategy into everything you do, from product design to hiring people, to operations, marketing, and after-sales service.

If you live your story, you will have the ability to grow and add to your product line over time. It will be easier because you will have loyal customers who trust you. Think about how Apple and others have expanded over the years with the same core story/strategy and maintain a loyal customer base.

Now, for the hard part. Defining and creating your core story/strategy is challenging to do and takes time, But, take the time. It might be the difference between success and failure.

Now, let’s look at defining the core story/strategy in a little more detail. There is additional material on the different aspects of creating and telling your story that you will want to read as well.

What is a core story/strategy

Simply stated, a core story is a powerful narrative about your company, which explains what you do (problem, solution, benefit, or results) plus why you do what you do.  In other words, your core story is your strategy, and it drives success.

A core story also creates an emotional impact, will hold the reader’s attention over time and is flexible enough to be able to explain your company in different ways to different audiences.

This core story is not a  story about you, its the company’s story about your customers. Carmine Gallo, the author of “Talk like TED,” states that a company story is the company strategy, and the CEO is the keeper of the story. You are creating a clear and compelling vision and story around the “why,”  which is a fundamental task of leadership.

Answering the why question is how you build trust and eventually loyalty,  Business books are full of advice on how to achieve specific objectives and goals, but they are light on the Why questions. Carmine Gallo, the author of TED Talks, says to ask the following questions, Why are we doing this? Why should I join the company? Why should I invest in this company? Why should you buy this product or service from this company? The answer to why is the company story.

A core story also motivates employees, defines company culture, and provides a vision to attract investors and even define future product development. However, your story must be authentic or the results could turn customers away.

According to Christan Riedal at Mind Caffeine, a core story is the basic narrative that structures why we believe something is meaningful. It is the story you live by. The core story of a company can be an experience, a specific moment in time, or a belief that shows the real purpose of the enterprise: why you are doing what you do.

It is also a story that is designed to create relationships and gently persuade an audience into suspending their cynicism to buy into an emotional point of view. We make decisions with emotions.

 If you take the time to refine your story, you refine your thinking and the company strategy, Companies that don’t have a clear, articulated core story don’t have a clear and well-thought-out strategy.

Don’t make the mistake of thinking that the story is just about marketing. It’s bigger than just marketing. The story is your strategy. If you make the story better, you make your strategy better.

 

A Quick And Effective Way To Tell Your Story

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Some people find it hard to develop an easy way to create a story or get it started. We usually use the three steps of problem, solution, and results or outcomes. Here is another way to get you started. Nick Morgan, author, and coach, tells people to use the story formats of famous and well-known stories as their framework, Then explain their story within that framework,

Before you start, don’t confuse a story with an anecdote, which is more of a description of something that happened. Nick says a story has three parts: a situation, a complication, and a resolution,

You need to tell a story if you want to grab someone’s attention and hold it until you reach the Call To Action (or, as Jerry Weissman would say, get them from point A to Point B).

You can do that with stories because stories work the way your mind works, Memory depends on attaching emotion to facts, Too many people try to use lists (3 of these, 6 of those) but people have a difficult time remembering those lists. Stories do a much better job.

But if you are having a hard time creating a story, use one of the traditional story frames that have proved themselves over the years,

Here are the five frames you can use.

Quest is the most fundamental frame. In this scenario, the hero goes off to achieve a definite goal but runs into a problem(s), generally finds a mentor, and then, throughout the story, reaches the target (for example, a new solution to a problem).

The Stranger in a Strange Land is a much different story; the hero finds himself in a strange place where he is unsure of what to do (e.g., maybe a research task without any defined criteria), the rules, or even the path forward. But he finds a mentor and a solution to something he didn’t know he was looking for initially.

Rags To Riches is the traditional story of starting out with nothing and, through hard work and some luck, ending up with fame and fortune. Maybe an investor pitch showing the investors how your startup started with nothing, is now at milestone B and is ready to scale.

Revenge is simply about a wrong done to the hero who, through no fault of his own, loses everything/. Then, he prepares a plan and sets out to get revenge for the wrong done to him. For example, this could be a public relations story about a company getting its reputation back after some false stories about it. This happened to one of our clients years ago.

Love stories are about both love found and love lost. For example, a new great partnership being formed or a partnership is dissolved,

The main point here is that you can use a story’s frame to help you create your own story without having to create a new structure. Also, these frames are familiar and understandable from the beginning, which makes your job and their ability to follow your story easier.

Do you have a situation in which one of these frames would make sense as a starting point to create your unique story?

 

Creating And Sustaining A Competitive Advantage

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An advantage is rooted in asymmetries among rivals. It is leadership’s job to identify which asymmetries could offer an advantage. You want to exploit real advantages and be careful to avoid your weaknesses.  You also don’t want to get into a fight you can’t win.

A Sustainable Competitive Advantage

A sustainable competitive advantage like lower costs or higher quality is the goal of every business, but you also have to realize that your advantage may not be across the board. Your advantage may only be in certain products or services. Also, your customers are not monolithic. They differ in knowledge, biases, perceptions of quality, budgets, etc. Therefore, your advantages may be limited or temporary and not extend across the market.

To have a sustained advantage, your competitors can not be able to duplicate your advantage (eg, even lower prices or higher quality). To achieve that you need patents or processes, or unique skills and methods that you have obtained through experience or a strong brand name like Apple.

Interesting Advantages

Some advantages are more interesting than others. Richard Rumelt in his book “Good Strategy/Bad Strategy” explains that a competitive advantage that is “interesting” only when the advantage helps you increase value.

Competitive advantage and profitability are not equal. You can’t make money or get wealth by simply having, owning, buying, or selling a competitive advantage. The connection between competitive advantage and wealth is dynamic. Wealth increases when competitive advantage increases or when the demand for the resources underlying it increases.

How to increase value

Increasing value requires a strategy to do at least one of the following:

  1. Continue to strengthen your advantage (stay in beta mode forever)

  2. Keep expanding your advantage in both products and markets

  3. Create a higher demand for your advantaged products

  4. Make it difficult for competitors to copy or imitate your advantage

Deeping your competitive advantage

Start by defining advantage in terms of surplus — the gap between buyer value and cost. In other words, widen the gap by increasing value to buyers, reducing costs or both. This is difficult for two reasons:

One, Management must believe that improvement is a “natural” process and that it can not be accomplished by pressure or incentives alone. Improvements come from reexamining the details of how work is done, not just cost controls.

The same improvement rules apply to products except observing buyers is more difficult than examining one’s own systems. Companies that excel at product development and improvement carefully study the attitudes, decisions, and feelings of buyers. Then have empathy for buyers and anticipate problems before they occur.

Two. The second reason deepening your advantage is difficult is when your methods and processes themselves are weak. The improvements must be embedded or protected from rivals.

Broadening Your Advantage

Extending your competitive advantage into new products or markets means encountering new competitors. This requires looking at and reexamining the underlying skills and resources of your proprietary knowledge.

Extension based on customer beliefs (brand, reputation, etc,) may be diluted or damaged by careless extensions. (look at how Disney has protected — no cursing,  no sex, and no gratuitous violence- its brand while expanding) A brand’s value comes from guaranteeing certain characteristics of the product. But those characteristics are hard to define

Creating Higher Demand

Advantage increases when the number of buyers grows or when the quantity demanded by each buyer grows Technically it is the scarce resources that underlie the advantages that increase in value.

Note; increases in long-term profits only occur if you have already created a competitive advantage and you continue to use your proprietary processes and methods to expand demand. Engineering increased demand for the services of scarce resources is actually the most basic of business strategies. The increased value will come from less imitative competition.

If you continuously improve, more and stronger patents, strengthing your brand-name additional copyrights, etc your competition will have a hard time imitating your products. It’s like staying in “Beta” forever.