Mike is an experienced leader, organisational psychologist and speaker who understands the need to unlock the potential of leaders, teams and organisations to overcome the complexity and volatility of modern business.
Mike’s leadership skills and knowledge are grounded in an 18-year career in the British Army, where he served several tours of Afghanistan and Iraq, leading troops in very complex and hostile environments. It was this experience that gave a real understanding that only when your people are empowered, engaged, and aligned around a clear mission can your team achieve its full potential. Accompanied by his studies to become an organisational psychologist, it has given Mike an exceptional background in leadership, strategy and creating the right cultural environments for people, teams and organisations to thrive.
Mike joined Matt on the eCommerce podcast to enlighten us about the importance of strategy and why it’s so important to align this to your business.
What is a strategy?
Strategy is choice. Strategy and leadership is all about choices. In terms of the army, it’s constantly thinking; what is it that we're trying to achieve? What really is it that we are trying to win at? And where can we best position ourselves in this vast open area that we've got available to us that would give us the maximum competitive advantage to win? Now, if you turn that into business terms and not in military terms, it's pretty much the same. What are we trying to win at? What are we trying to achieve here?
What you normally find is that businesses are focused on previous years, and their strategy is to double it the following year. This probably isn’t the best strategy when you start focusing on other businesses within the same field, for example say you made 250,000 of sales, doubling your sales might sound good, but then you look at the rest of the industry who are actually making 250,000,000 x amount of sales in what they're doing, so actually, your strategy is a 10th of what the potential of that market is. So it's not really that good, so what can you do to get maximum competitive advantage to win this battle?
Your organisation needs an unambiguous purpose. That's the first stepping stone into having that clear purpose and knowing what it is you need to win at. What is your organisational purpose that really states what you do, and why does it matter? Once you’ve understood your purpose, you start eliminating what you do do, and more importantly, what you don't do. Essentially, who aren’t your customers? And how can you reach them?
Another thing to consider when thinking about strategy is foresight. What are those driving forces in your contextual environment? This is called scenario planning. You want to be anticipating what the key changes are going to be, and where the weak signals will be. You’ll want to identify this from the next 10 days to the years to come. Although eCommerce is quite a volatile environment so your foresight will be narrower, because you want to build agility, you want to be able to reload, reorganise, and adapt to the shifts in your environment.
Why is strategy important?
In eCommerce there can often be overlap with organisations, so instead of trying to be competitive using prices, think about how you can make your brand more unique and find the value in that. Look at where you can continue to add value that is not head on head competition, you could look at partnerships for example.
By 2040, 90% of purchases are going to be made online so the amount of competition and people trying to get into the eCommerce field is going to be huge. We’ve got the giants like Amazon, so you’re not going to compete against them because they'll swallow you up, you're not going to get that capital investment or that innovation, unless you decide to partner up and you can share it on risk. It's about looking at what options are there.
Do you need a business plan before you implement your strategy?
According to Mike, a business plan should come afterwards, you want a free creative thinking process around your strategy and having a business plan in place before this may compromise this. Never try to do a strategy on your own, get a diverse group of people around you to look at different angles, and really explore your ideas, and then the business plan will come after. Once you’ve identified your current state, where your place in the market is, you want to start looking at your future state, and that becomes your priority and that will give you the competitive advantage.
What should a strategy look like?
You want a page no more than five pages of very clear strategy, answering these questions:
1. What are you going after?
2. How are you going after it?
3. Where are you going to go after it?
4. What are the capabilities that we need to be able to do that?
The strategy is iterative, so it’s not set in stone. It’s a five page document, which can adapt and move, it's alive and responding to what's going on. But at the same time, it's also firm and fairly stubborn.
What are the main things that cause friction in a business and how can we minimise these in our eCommerce businesses?
Where you see a lot of friction happening is the direction towards a strategy because this can be so ambiguous, it creates divergence. So when divergence exists, that's when people start opening up their own wills and agenda, and start following their own ideas..
Another area of friction could be your team. The key is to keep it simple, be very clear on what you're saying and what you want to achieve. When you’re explaining something, ask what their understanding is and interpretation of what you’re trying to do and allow them to understand their choices in order to minimise the misinformation transfer.
Autonomy, or mission command as it’s called in the army, is probably one of the most overused words, but the most misunderstood. But to be truly empowered, there's three main things that need to be true. The first one is to have a clear understanding of the organisation's intent or strategy and what part you play in it. The second thing to think about is your constraints, understanding your constraints gives you and your team freedom. The third element is competence in your role. If something is to happen, or something has gone horribly wrong, if you understand the intent of the organisation, your part to play in it, and understand your constraints, then you can adapt in line with what the organisation's trying to achieve. You should be using your strategy as a framework to make choices and decisions.
Another thing that can cause friction is when people lose sight of what they're actually trying to achieve. Remember who your customers are, and who your customers are not. People can tend to get themselves down a rabbit hole when trying to do everything and appease everyone. You lose sign, and this can cause friction.
What is strategic alignment?
Organisationally, the strategy should be aligned to the organisation or the organisation should be aligned to the strategy. This is what we call strategic alignment. It's very important for any organisation, no matter what industry size or sector, to make sure these two are aligned to ensure that you can best be competitive in the strategy you've made.
It starts off with purpose or our strategy, so what we're trying to win, and then we look at our core capabilities, what do we need to be able to win at this? That could be innovation, it could be cost minimisation, logistics, it could be anything. Then we then look at your architecture and your culture. The culture has to be designed to best enable you to achieve your strategy.
So you’ve aligned your architecture, your leadership, and your structure. What about your processes? Like your IT management systems, your performance management systems, how will you align those to meet the needs of your strategy? A lot of people focus on the outcome, and forget about the component parts of their business, which creates misalignment, and this creates risk in the organisation.
Playing To Win by Roger Martin
Align by Jonathon Trevor