Transforming the "So What" Opposites in to a “So That” Strategy called Purpose Innovation

The last few posts on the topic of “balancing opposites” have definitely made our blog readers to pay a closer attention to the ideas we have been promoting in the fast few weeks. Coincidentally enough, on the other day, one of our readers came up with a “So What?” question– which, in our opinion is a great sign – as, it is just a matter of time that they will transition from the “so what” camp in to the “so that” camp, as alluded in one of our earlier posts (http://strategywithapurpose.blogspot.com/2010/09/transforming-what-aboutso-what.html). With that said, we are going to dedicate this post to answer that specific question- i.e. how do we transform these “so what” questions in to a “so that” strategy called “purpose innovation” within the context of balancing opposites?

First things first... what is this purpose innovation? As depicted in the graphics on the top of the page– when core and edge (or, in general, when opposites) are balanced , the “forces of attraction” from the core and edge participants of various related and unrelated industry verticals come together to unleash their synergistic purpose value in the form of a powerful innovation called - purpose innovation - with its three sub components -

• Boundryless purpose models - A stirred up view of edge opportunities, in the form of a “pull value chain” disrupting the traditional boundaries of related and unrelated industry verticals (CPG, Retail, Telecom/Hi-Tech, health care, Pharma, Insurance, Banking etc.) – who are knitted together with a “forces of attraction” from the “purpose value opposite pairs” such as Health &Wellness/Taste & Beauty, Sustainability/Maintainability, Mass Market/Personalized, Shareholder value/Community value and Externality/Internality - to name just a few.


• Boundryless Purpose bundles - A “causal chain” based dynamic bundle of products and services with a set of positive value incentives that are shared among all the players of the pull value chain (consumers and participants alike) who helped to create them- as incentives help catalyze collaborative action.
  


• Boundryless Purpose platforms* - A flexible foundational platform design that help to change the characteristics of the underlying product and services without changing the platform design significantly using the emerging technology and manufacturing/supply chain best practices - a huge capital cost saver.

I hear someone asking - how is this purpose innovation different from open or institutional innovation? In our opinion, purpose innovation is much broader. While open innovation focuses on leveraging third party resources to support organizations’ product and/or business model innovations, institutional innovation, in some cases, also expands the scope to include the core operating processes of partner’s value chain – but, still within a single or related industry verticals. On the other hand, purpose innovation goes few steps further – by creating a “pull value chain” across both related and unrelated industry vertical boundaries in the form of purpose models, purpose bundles and purpose platforms – that are knitted together with a powerful “forces of attraction” from the consumer consumption driven, causal chain based, “purpose value opposite pairs” as listed earlier.

Pull Value Chain - Explained

This "pull value chain", unlike the push model encourages decentralized, yet loosely coupled interactions among its players from both related and unrelated industry verticals facilitating much broader type of collaborative innovation, using the “forces of attraction” from the purpose value opposite pairs. This attraction in turn inherently makes the participants to come together with a causal chain relationship, thus making them highly scalable with diverse, yet complimentary set of talented resources. This type of unprecedented scalability is being achieved because of the “distributed talented workforce"- regardless of their location or country where the pull value chain’s operations are predominantly executed.

Granted – in some situations, we will need the push management techniques for better control - however, they are used only on a case by case basis, and not as a norm. Hence, the push model organizations –typically go through a mindset shift to effectively harness the potential of pull value chain –which brings up another point - that the purpose innovations, in some cases also might override local product and/or business model innovations within the context of creating big picture value for all the participants - instead of creating the value for just one participant.

Pull value chain, in addition also pulls consumers with the same forces of attraction by providing valuable incentives in the form of purpose bundles. In other words, pull value chain makes consumers as passive virtual business partners within the value chain, thus making consumers as their lifelong partners creating a different kind of consumer loyalty -called “composite brand loyalty”.

The 3P’s (Purpose Models, Purpose bundles and Purpose platforms) Explained

Purpose models are the revolutionary game changing business models that not only just reinvent the firm from product/business model innovation standpoint, but also, mutate the DNA of the brand at the nucleus level and make them to be a part of a “pull value chain” composite brand. In other words, business models usually shuffle the value chain activities of the firm within the four walls of the firm (or at the maximum within the industry or related industry verticals) whereas, purpose models go few more steps further - shuffle the value chain activities of both related and unrelated vertical boundaries– and, then re-purposes the vision/mission of those brands (as both standalone and composite brands), with a causal chain based purpose bundles- that are knitted together by the “forces of attraction” resulting from balancing the “purpose value opposites” (i.e. the example value pairs as identified earlier).

Similarly, Purpose bundles are the causal chain based “consumer consumption” driven “day in the life” type dynamic bundles of products and services from variety of related and unrelated industry vertical providers that are bundled together by the “forces of attraction” from the “value opposites” – thus, providing a better value for the purpose minded consumers who are committed to a leading a purpose life style. For example, under this model, a Health and Wellness/Green minded consumer (who is also a passive partner of the pull value chain), will get a better value when they purchase a dynamic purpose bundle of “health insurance along with a variety of H&W based durables and non durable P&S and workout services” in a price that is in proportion to their purpose scores. The causal chain relationship rationale here is that- those consumers, who eat healthy organic food, apply natural beauty treatments to their bodies and exercise well will have a healthy life - and hence they deserve a better health insurance premium and so on and so forth. Extending the context of the this causal chain rationale, one can also say- that the more products and services consumers add to their causal chain - the more their purpose scores - and hence, better the value.

Likewise, Purpose Platforms are the foundational infrastructure enablers of the purpose models (and purpose bundles) providing the flexible platform design (with principles like JIT, lean manufacturing, tapered integration etc.) to help change the “relevance, access and value” characteristics of the underlying products and services - without significantly changing the platform design. This is a great value-add feature – that these purpose platforms are designed with a flexible design using emerging cloud based miniaturized manufacturing technologies (& nano- technologies) - as they help to change the characteristics of product and services without changing the underlying platform design – which is huge capital cost saver for the "pull value chain" participants.

Bottom line: History is filled with many examples of business concepts becoming successful – only when they “go along with the gradient” in alignment with the nature’s principles. And so, if history repeats itself (as it has done in the past), our purpose innovation has a great potential to be the next wave of disruptive innovation -as it, not only just disrupts the current “push value chain model”, but also, goes along with the gradient (in alignment with the “forces of attraction” principle from balancing the “purpose value opposites”) – as outlined in our blogs -and summarized in the poem below.

Opposites attract opposites for creation to procreate,
Positives exert negatives for the creature to illuminate,
Profits revert purposes for corporations to innovate,
Yet, likes retract likes for them to continue to be unlit,
Like the unlit* Almighty- as He has no opposites!

* That’s why Solomon among other wise men/yogis of yester-years, depict the Almighty to be residing in the inner most court in utter darkness- in alignment with nature’s “forces of attraction” principle -as evidenced in the scriptures of both west and east alike!

Within Eagle’s fine nest, Strategy is at its finest… on its crest, Innovation is at its best!

Courtesy - Google's eagle images assembled/modified with our inspiration

Over the last few days, I have received quite a few informal questions - the most notable one being is about -the recent “Redefined Value equation” principle, not complimenting our earlier principle of “Strategize from the Core and Innovate from the Edge”. In other words, how is it possible for “Core and Edge” to perform their respective “strategize and innovate” functions, and yet balance each other as a “cohesive whole” simultaneously?

While these principles might sound like a paradox on the surface –beneath them, they indeed complement one another. As I was thinking about the best way to explain this paradox, I was immediately reminded of our Eagle metaphor (http://strategywithapurpose.blogspot.com/2010/07/strategy-is-like-eagles-mounting-up.html) -and so, decided to go back to the eagles for additional inspiration. With most of eagle’s characteristics being already covered in our earlier blogs, I was definitely challenged to come up with yet another compelling inspiration to explain this paradox. However, with eagle being symbolized to the “Almighty God” in the scriptures- the mother eagle did not disappoint us again- with her never-drying reservoir of compelling inspirations!

With that said, I must admit that it is not an exaggeration to say that eagle’s life is full of poetical inspirations- whether it be their structural beauty, rhythmic energy or inspirational insights - and, today’s inspiration is no exception either–as it is about “the mother eagle stirring up her nest” within the context of its seasons. As I started visualizing this stirring up event in eagle’s life – I was amazed how God’s creatures are wonderfully made to be the best strategy teachers. In other words, the mother eagle herself has become our strategy teacher today, explaining this seemingly opposing paradox, with an eagleical* poetry –


Transforming our quest in to her inspiring thirst, by
Turning her fine nest in to strategy’s fine nest (finest),
Making her crest as innovation’s bee nest (best), yet
Sustaining her thirst without going to rest, until
Re-cycling our (strategic) zest in to her seasonal quest!

With all the pun aside, I guess it is time to stir up our inspiration! We all have seen eagle’s nest being knitted together very high on the branches of a tree or in the edges of a cliff. However, not many of us, perhaps, have had the opportunity to glimpse at it from inside though. Apparently, the mother eagle starts the nest knitting process with wild thorns, broken branches, sharp rocks, and a number of other construction materials like a seasoned “strategist/operator” from “Eagle Nest Inc”. But then, she lines up her nest with a thick padding of wool, feathers, and fur from the wild animals on top of them making it soft and comfortable for the eggs. By the time, the eaglets reach the flying age, the comfort of the nest make them quite reluctant to leave the nest. That’s when the mother eagle decides to stir up the nest. With her strong talons, she begins pulling up the thick carpet of fur and feathers, bringing the sharp rocks and branches to the surface. As more and more of the comfortable cushion gets plucked up, the nest becomes uncomfortable for the young eaglets to live there anymore– and eventually, making them to move on to its crest.

Similarly, by the time the core reaches its maturity (or the flying stage), the comfort of the nest, or the so called, continuous revenue streams indeed make them reluctant to innovate. That’s when our “purpose-profit balanced strategy” (like the mother eagle) must start “stirring up the core” with its strong talon like “differentiating strategies” -and pull up the thick carpet of “easy revenue streams”, thus bringing the reality of disruptive innovation opportunities (or threats) to the surface. As more and more of these opportunities come to the surface (both from within and from the competitors), the nest becomes uncomfortable for the core, and eventually making them to re-examine their successful products and business models- and to prepare them to innovate with an edge.

Yet another insightful part of this stirring up event is- how the mother eagle starts the stirring up process within the context of its seasons. As it turns out, the mother eagle takes good care of its eaglets during their growing up stages with a fine nest –symbolically making - “strategy to be its finest” (or in alignment with the strategize from the core principle). However, as the season starts changing – the same mother eagle, starts stirring up the nest (or disrupts the core) - symbolically making –“innovation to be its best” (or in alignment with innovate from the edge principle).

The stirring up event does not stop there either. The mother eagle (after stirring up the nest), apparently starts walking down deep in to its nest (eagle’s nest can be of 10 feet deep!), gathers all of its eaglets on to its wings, and then starts the flight to its crest. What happens in the air is all the more intriguing – the mother eagle, apparently starts shaking those eaglets off -just to teach them the strategy lesson– “what it takes to be an eagle”– symbolizing, how a “purpose-profit balanced strategy” is supposed to use an edge (or disruptive innovation) opportunity to disrupt the core. On situations, when those eaglets slip and fall – the mother eagle,apparently stoops down below, lifts them back on to its wings - and the acrobatic flight lesson continues till the eaglets start flying on their own.

As we observe this this end-to-end stirring up event - the mother eagle, not only, stirs up the eaglets, but also, shakes them off in the air, until they start flying on their own. Let us face it – had not the mother eagle started stirring up those eaglets (and shake them off in the air), those eaglets would be just enjoying the cozy life, never would have learned to fly at all (as there is no incentive for them to leave the nest). And, above all –they never, ever would have got the opportunity to build the nest of their own in the future (symbolizing the edge becoming the core in the following season) and make the eagleical cycle moving - very much like the” redefined value equation”, balancing “core and edge” within the context of their seasons- and, yet continuing the seasonal value equation cycle- (http://strategywithapurpose.blogspot.com/2010/10/balancing-opposites-using-redefined.html) as outlined in our earlier blog.

A point of clarification about seasons - seasons, (although primarily are defined with a time dimension), also have other dimensions (i.e. place, money, opportunity etc.), and so, our concept of seasons should take in to account all of those dimensions in a holistic manner. For example, while it might be relatively difficult to balance “core and edge” simultaneously within the time dimension, under the place (or opportunity) dimension, they both can be easily balanced simultaneously , provided they are executed in different business segments/geographical places (or different opportunity spaces) using one of the organization models, we had laid out earlier (http://strategywithapurpose.blogspot.com/2010/08/strategize-from-core-and-innovate-from.html) .In other words, within the time dimension of the seasons, we are better of sequencing core and edge -whereas within the non-time dimensions, we are better of executing them simultaneously.

Yet another point of reinforcement within this context is- our principle of “redefined value equation” is not at all against structuring the businesses in to core and edge (or stars and dogs etc.) – as these structures are very much needed for better manageability and faster decision making. On the other hand, what the “redefined value equation” encourages is that core and edge should be treated or given its due importance (not necessarily equal importance)- very much like how the mother eagle does both (caring and stirring/shaking) within the context of their seasons to make them to be part of a cohesive whole – which, by the way, was exactly the key complimentary point intended by our paradox (with those two principles) as illustrated on the “eagleical picture” on the top of the page.

Bottom line: The principle of “strategize from the core and innovate from the edge” is relevant only when we have the “redefined value equation” mind set - of balancing core and edge as a “cohesive whole” by giving their due importance within the context of their seasons -very much like how the mother eagle does both “caring and stirring /shaking” of their eaglets within the context of their life seasons- to keep the eagleical* cycle moving. With that said, I guess it’s time to come up with yet another poetical slogan – “Strategize from the nest, for the strategy to be its finest- and innovate from the crest, for innovation to be its best - all within the eagleical* seasonal quest”!

Source: Scriptures and few other Eagle research sites

Balancing Opposites Using a “Redefined Value Equation”

For those of you who have been following my blogs closely perhaps would have noticed a follow-up question that was asked within the context of my last week’s blog– how does this concept of “balancing opposites” work in the real world from strategy execution standpoint? Although, I had answered the question at a high level within the comments section (http://strategywithapurpose.blogspot.com/2010/09/strategy-is-it-marathon-sprint-or-both.html), the more I thought about it- the subject of “balancing opposites” is a much deeper one -and so decided to write a separate post.

As I started reading more on this subject- to my amazement, I quickly learned that the philosophers of yester-years from both the west and the east alike (Yin-Yang, Ayurvedha, Feng-Sue, UMO, Greek basic elements, Qur’an’s tenets, Sun Tzu’s art of war, and Solomon’s wisdom etc.) have not only used this concept to explain the ultimate meaning of life, but also, have used them to explain the ultimate reasoning behind the existence of human race - which clearly suggests that “balancing opposites” is a mystical process that is filled with enlightenment and wisdom -and so, leveraging their work to explain the relevance of this concept within the business world (using a “redefined value equation”) is more appropriate within this context.

Although, these opposites are distinct things on their own right, it is important to recognize that each of these opposites coexists by consent of their other half. For example, as we saw earlier in one of my previous blogs - the “concept of seasons” is what gives us the confidence that every opposite or down cycle in life or business has a beginning and an end. In other words, happiness cannot exist without sadness; therefore if we seek happiness, we are also destined to encounter sadness (in another season) because both depend on each other for their existence. Analyzing these interdependency of opposites with a key natural principle “Like repulses like and opposites attract each other ” – will clearly help us to come to the conclusion that “balancing the opposites” within the context of their respective seasons is critical for us to maximize life or business’s outcome.

For example, on the surface, cost containment (bottom line focused) and innovation (top line focused) strategies might sound like seemingly opposites -very much like the opposing pairs of Solomon. But, if we think about them within the larger context or objective (say, to turnaround and grow the company) — cost containment (for a season) is indeed a stepping stone for innovation (for a new season) – which kind of implies that “balancing opposites” within the context of the larger objective is the way to go, as long as we do not mix them up within the same season– in the words of Solomon. In other words, both of these strategies might sound like polar opposites when we weigh them in isolation- but, when we look at them within the context of the larger purpose governing those seasons — we can clearly recognize that they are complimentary to each other provided they are executed within the context of their respective seasons as a stepping stone for each other.

The question however is – why most corporations, still struggle to balance these opposites? What is preventing them from balancing these opposites? The answer in my opinion is “misplacement of value components within the value equation”. In other words, the value equation, in its current form, in most corporations create divisions by dissecting businesses into opposites –the core and edge, the stars and the dogs, purpose and profit initiatives so on and so forth -from the standpoint of achieving quick wins. Don’t get me wrong, that these structures and quick wins are absolutely necessary for better manageability and for meeting the quarter numbers; however, in most situations we get carried away with this short sighted quick win focused mentality and fail to recognize the larger context or purpose wherein these opposites (e.g. core and edge) are part of a cohesive whole. In other words, we cannot have an edge without a core and cannot have a core without an edge, therefore, to try and label a particular facet of business as being more important than the other half is illogical and self-defeating – and, so, corporations must redefine their value equation with an end goal of arriving at that mystical centre point where these opposites are balanced and executed within their own respective seasons.

However, arriving at that mystical centre point (where these complimentary opposites are balanced) is both an art and science - and so, we may have to get some additional inspirations from the following five underlying natural elements that were used by the philosophers to represent our universe’s value equation.

“Water soaks and descends; Fire blazes and ascends; Wood bends and straightens; Metal holds its shape and is malleable; Earth takes seeds and gives crops”

As we can see from this causal chain, it contains natural elements that are representative of different stages of an ongoing process of transformation within this universe’s seasonal causal chain as discussed earlier in one of my previous blogs (http://strategywithapurpose.blogspot.com/2010/09/transforming-what-aboutso-what.html). On a deeper philosophical level, these transformations are balanced on a continuous basis by the dynamic interplay between complimentary opposites within their respective seasons. Interestingly enough- Sun Tzu leveraged inspirations from these five natural elements as well, while forming his five strategy system elements – i.e. mission, ground, climate, command, and methods.

With this prelude- let us leverage the inspirations from both “five nature elements” and Sun Tzu’s “five strategy element system” to redefine our value equation to help balance these complimentary opposites: i.e. with “purpose & profit," at the center of the equation balancing the remaining four opposites with a causal chain based creation and destruction cycles. The remaining elements are imagined to be part of a circular causal chain similar to the natural element causal chain, as outlined below.

“Water creates wood by growing trees. Wood creates fire. Fire creates earth by transforming wood to ash. Earth creates metal, which is why metal, is mined from the earth. Metal creates water, as we can see by condensation on metal surfaces”.

Likewise, within our redefined value equation,

“Environment or competitive advantage analysis” creates winning strategies, and then, those strategies in-turn transform the “current state business” in to “Purpose-profit balanced future state business”(center) using the execution focused leadership skills, strategic positioning and expert knowledge. And then, those renewed execution leadership skills, propel forth newer visions and continue the transformation process of turning the environmental conditions in to winning strategies”.

And, the cycle continues – and, gets refined every iteration- by continuously balancing these complementary opposites – thus creating the ultimate business harmony (or optimal outcome) as outlined in the picture at the top of the page.

Bottom line: The ultimate success of businesses lynch on this key principle of “balancing opposites” within the context of their respective seasons using this redefined value equation. However, to reach that success in reality, we need to be practicing this principle on a daily basis using our redefined “causal chain based value equation” –which not only will help corporations to become the experts in this balancing act (of opposites), but also, make them the purpose leaders of tomorrow -in accordance with the purpose, wisdom and spiritual principles of the world renowned philosophers.

Source: Scriptures, Ancient literatures and Sun Tzu's art of war

Strategy – Is it a Marathon, Sprint or Both?

Courtesy: Google Images

While we have used quite a few metaphors in the past to explain the purpose-profit balanced strategies – the one, that has caught my attention the most, in recent days is – “Is Strategy, a marathon, sprint or both?” Granted, the street often pushes the firms to run the race with a sprint like mentality producing quick wins– yet, history is also, filled with examples of firms fading away in to the doldrums (after producing those early quick wins)- partly because of their lack of marathon like mindset. Hence, the question before us today is -do we execute our strategies with a sprint mindset, marathon mindset, or both?

Solomon – the wisest man ever lived – once, said -“There is a time for everything, and a season for every activity”. In other words, the appropriate speed in which we react to business situations depend upon the seasons of the business cycle - and so it is important that we get in tune with the business seasons first - before deciding whether to execute our strategies with a sprint or marathon mindset. What do I mean by that?

As it turns out - the concept of seasons is what gives us the confidence that every down cycle in life or business has a beginning and an end. In other words – if situations like misfortunes, misunderstandings, quarrels, failures, disappointments, profit or loss -have no end, our life will be totally meaningless (and perhaps even boring). As a matter of fact, if there is no down time – we will not be able to even appreciate the goodness of up time – much less experiencing them.

Likewise, if we look at the characteristics of sprint and marathon races – we can clearly understand that - both have start and finish lines, and yet – what happens between their start and finish lines are a different story. In a sprint, the effort is focused on reaching the finish line in seconds or perhaps in minutes, and so the runners push hard, giving the whole energy they’ve got till they reach the finish line. Also,the timely start is critical, as it makes up the huge percentage of the race, and even a tiny stumble can cost them a heavy damage much less winning the trophy. On the other hand, in a marathon, runners know that they’re going to be running for a long time, and so pacing is critical for them to reach the finish line much less winning the trophy. While the start is important, it is secondary in comparison to sustained progress and so, one can even recover from a large stumble as long as it doesn’t result in any physical injury.

Similarly, those who approach strategy execution as a sprint quickly burn out. They run the first few days, maybe even the first month or two, like a category 5 hurricane that seems unstoppable by their competitors. And yet, as time wears on, they lose their strength (stamina), well before the finish line. On the other hand, those who approach it as a marathon, though, they get off to a good start, and yet oftentimes fall far behind the sprinters. So, the question of the day is - how do we get to that optimum speed that helps us to win the race at all times? I guess the answer lies in Solomon’s words of wisdom within the context of the sprint-marathon metaphor –“run the business race like a marathon, yet sprint up, once in a while as needed-as per the seasons – and, then scale back after the sprinting season is over”.

This does not mean that we have to be wiggling like worms for every environmental change -on the contrary, we need to be steady and manage the execution speed (or momentum) by proactively choosing the optimum speed, as per the seasons of business realities. The optimum speed is what going to help us to transcend over the minor changes of the environment – thus, giving us the control over the future ( i.e. leading to superior results) vs. letting the environment controlling our future without our proactive intervention. That being said, we cannot, however, blindly ignore the seasonal challenges as well- as adjustments (like speeding up once in a while like a sprint) are absolutely needed to react appropriately to the seasons (e.g. missing a quarter numbers). Without such minor adjustments, our strategies can quickly become irrelevant to the moment and actually end up hurting our long term success.

In the final analysis - it is a balancing act -and so depending upon the seasons- we need to pick and choose the optimum speed (as a sprint or marathon) as needed by the business realities of the seasons to sustain the momentum for the long haul. Without such speed, we might even miss the mark on some business situations – and likewise, with too much speed, we might even lose the stamina (needed for the long haul) - and so “doing both” is the way to go when it comes to strategic planning in the words of Inder Sidhu and Roger Martin. To get to that “doing both” mindset within the strategic planning process – like most things in this world – we need to adhere to certain principles to help arrive at that optimum speed.

Marathon principles

• Principle of "high energy" – Addressing “who we are” question in terms of forming the “spirit-soul-body” balanced high energy team – or hire the right people who can execute with high energy for the long haul.
• Principle of "sustainment" – Addressing the "why do we exist" question in terms of sustainment based purpose dimension.
• Principle of "endurance" – Addressing “where to play” question in terms of overcoming the early painful situations (i.e. anything is worth chasing after it creates some pain) or chasing the right market track/geography.
• Principle of “never giving up” – Addressing “what to play” question by overcoming the early brick walls with “never giving up” type differentiation and exploitation strategies.
• Principle of "dream" – Addressing “how do we win” question by “keeping the dream of finish line in mind” or with top line focused big bet ideas.
  

Sprint Principles

• Principle of "unstoppable force" – Addressing “who we are” question in terms of forming the team with a good mix of "skill, talent and giftings" who can execute with a great force for a higher first mover advantage or business impact.
• Principle of "early start" – Addressing the "why do we exist" question in terms of hitting the quarterly profit numbers quickly.
• Principle of "focus" – Addressing “where to play” question in terms of being laser focused with the right set of product and services categories.
• Principle of "finish" – Addressing “What to play” question in terms of “getting to the finish line” quickly mentality.
• Principle of "trophy" - Addressing “How do we win” question in terms of “keeping the trophy in mind” type bottom line focused operational excellence ideas.

Bottom line: As we can recognize from this set of marathon-sprint balanced principles, it is clearly evident that “there is no silver bullet” -especially when it comes to arriving at the optimum speed using these marathon-sprint balanced principles - and so, it is all the more important for organizations to properly balance these principles with a “doing both” mindset. In addition, augmenting these principles with the right set of accountability/governance processes will not only make our organizations a best in class in our industry vertical in terms of exceeding the profit numbers, but also, make them the purpose leaders for the long haul.

What in the world is the "Strategy Pitch Equation"?

One of my friends who had paid a closer attention to the cartoons within one of our earlier blogs – jokingly said –“don’t stretch him any longer ... he is going to break apart”. With all the pun aside - as I thought more about it –the character within the cartoon is being stretched for a reason i.e. to reach the optimal length with the appropriate tension- so that he/she can pitch the purpose-profit balanced strategy for a maximum business outcome - very much like how a guitarist tunes his/her strings (by balancing the length and tension) artfully for bringing the maximum harmonious pitch to our ears.

C.K. Prahalad and Gary Hamel would argue that "creating stretch, a misfit between resources and aspirations, is the single most important task senior management faces" – which makes me to propose a hypothesis - that the stretch/causal analysis is the single most strategic activity within an organization, given the fact, that the number of resources (length) and their aspirations (tension) have a direct co-relation to the effective implementation of the strategy causal chain. Hence, aligning the length and tension of the strategy causal chain/string is the single most prerequisite task of the pitch masters to pitch or execute their strategies effectively.

A quick musical instrument primer would be appropriate here to move forward with our hypothesis – i.e. arriving at the optimum length along with the appropriate tension of the string are the two most important challenges for the stringed musical instrument designers to achieve the desired pitch level as outlined in the musical pitch equation below.

P=1/2L (T/m) 1/2

P= pitch frequency
L= length of the string
T= tension of the string
m= mass per unit string length

Now that we have understood the “what part” of the musical pitch equation, one can easily extend this equation to the business strategy pitch context as well- i.e. equating resources to the length of the string and aspiration to tension within the context of maximizing the strategy pitch outcome or the so called, competitive advantage . While the “what part” of the stretch/causal analysis will help us to “get even” with our competition, the “why/how part” of the analysis is what help us to create, the so called, competitive advantage to march ahead of our competition. To arrive at this “why/how part” of our analysis- we may have to revisit our strategy causal chain/string analogy, one more time, for some more inspiration.

As we dissect the variables within this musical pitch equation, we can clearly see a pattern evolving - when we keep the string's length constant, we need a higher mass “per unit string” to generate the appropriate amount of tension, which then, producing the desired pitch. On the other hand, if we keep the string's mass “per unit length” as constant, we need a longer length of string to generate the same tension, which then, producing the desired pitch.

Similarly, when we keep the number of resources constant (due to capital constraints), the talent “per unit resource” needs to be elevated higher to generate the right amount of aspiration needed to produce the desired strategic pitch outcome. For some reason, If we have to keep the talent “per unit resource” as constant (due to the lack of talented resources), we will, then need, more number of resources to generate the same amount of aspiration level, thereby achieving the same desired pitch effect - as outlined in the strategy pitch equation below.

P=1/2R (A/t) 1/2

P= strategy pitch execution frequency
R= resources of the strategy causal chain
A= aspirations of the strategy causal chain
t= talent per unit resource

As we can clearly see in this equation – it is not only strategist dilemma to balance the resource and aspiration dimensions of the strategy pitch equation for a maximum outcome, it is also the leadership dilemma to arrive at the right number of resources (with appropriate talent) with appropriate aspirations for the strategy to be pitched/executed effectively for a maximum business outcome. The next obvious question is -how can organizations with limited resources can achieve superior strategy pitch/execution performance within the context of this strategy pitch equation?

• “Stretch” the aspirations of the resources to generate the optimum tension within the strategy causal chain/string.
• “Leverage/Maximize” the talents of resources (or hire talented resources) to achieve the optimum length within the strategy causal chain/string.
• “Execute” the strategy with laser focus vigor to achieve this optimum pitch by balancing the variables of the strategy pitch equation.

What in the world is a "Purpose-Profit" balanced equation?

Courtesy: Google Images

I guess, my blogs in the last few weeks –definitely has created some buzz and made folks to pay a closer attention! On the other day, someone within our professional network barraged me with a list of questions (friendly questions though!) – What do I mean by the purpose-profit equation? What are the variables within this equation -other than purpose and profit? How and where do we draw the line between purpose and profit while balancing this equation? Are these virtues or variables mutually exclusive? Can they walk in harmony with each other - i.e. enhancing and leaning on one another thus creating a multiplier effect as suggested by Inder Sidhu?

While I was thinking about the best way to answer these questions within the larger context of the business world – I could not think of any better analogy than Buddha’s “five horse faculty” analogy. Extending this analogy to the business world- Corporation can be visualized as a team of five horses - with the lead horse (CEO) propelling the other two pairs of horses – and together they pulling the wagon called corporation to meet its intended purpose. The lead horse can go fast or slow (as guided by the board/stakeholders) - and the remaining two pairs of horses, not only must fall in step with the lead horse, but also, must balance with each other for the wagon to go forward without being toppled .

So far so good…right…well, I hear someone asking - what does that got to do with the purpose-profit balanced equation? Well, the first pair of horses within this analogy can be equated to “purpose and profit” dimension followed by the next pair of horses to “destiny and decision” dimension. In other words, “the CEO, purpose, profit, destiny and decision” are the five horses (or variables) that ride the wagon called corporation (as outlined in the picture on the top of the page) - within the context of balancing this purpose-profit equation for a maximum business outcome.

Rightfully so, the first pair of horses that need to be balanced within this equation is “purpose and profit” - I mean literally, they need to be balanced on a continual basis very much like a “tough love” type conversation occurring between two individuals. Again, leveraging Buddha’s analogy – it is like a “blind giant” called profit, conversing with a “small sharp-eyed cripple”, called purpose. Within their conversation - the blind giant apparently was saying to the sharp-eyed cripple: "Although I'm strong and can go very fast, I can't see clearly where I'm going and so, if you can ride on my shoulders, together we could go very far with the help of your sharp-eyes." Granted – it is a funny analogy – but the truth is that purpose and profit dimensions are profoundly intertwined - while the purpose dimension provides the solid root for the profitable growth, profit, on the other hand nourishes the soil in which purpose can grow. They are inseparable and necessary for each other – very much like the mind driving the profit and the heart serving the purpose in our personal lives. When heart and mind are brought to a point of this harmonious co-existence, the power of one driven multiplier effect indeed will start happening!

The next pair within the equation that needs be balanced is “destiny and decision” – i.e. exhibiting unwavering destiny focused determination while balancing the day to day decisions. Leveraging Buddha’s analogy again- it can be compared to a man wearing a turban (destiny) while standing near a burning bush (decision). Obviously, if a man is wearing a turban standing close to a burning bush, he is anxious to get rid of it (due to the heat), but yet, instead of throwing it away completely- he just keeps it aside for a period of time - till he puts the fire off. Similarly, there may be situations within our business world -where we may have to be decision minded to achieve some near term “fire fighting” situations – but, soon afterwards, we must wear the turban(destiny) back, after quenching those fire fighting situations. In other words- if destiny is not coupled with decision, it will lead to a status-quo and eventually will come back and haunt us in the long run.

The next obvious question is how does the lead horse ensure that the remaining pairs of horses are complementing each other by enhancing and leaning on one another thus creating a magical multiplier effect? With the question is about being magical, I guess -the only way we can answer it is, with a picturesque story, and not just words. Although, history is filled with many such examples (both modern and ancient days) - as I think about it more - the story of Joseph stands out more than the others. As the story goes - Joseph, the then governor of Egyptian Pharaoh in the ancient scriptural days is being sent to Egypt against his will. However, on reaching there, in a short time, with his purpose minded focus along with his shrewd profit minded administration kills – get the recognition as the best manager within Pharaoh’s court. Not only that- he also exercises integrity in every decision by fleeing away from the man made distractions (or the so called tests) of his days, but, yet was destiny minded when it comes to saving Egypt from the famine. Even on situations when he was misunderstood, imprisoned, and forgotten by his fellow friends - Joseph exercised his purpose in life – which eventually helped him to create the multiplier effect in the midst of one of the difficult circumstances of his era. In other words, the five horse balancing approach helped him to come up with the first disruptive innovative business model in the world- thus protecting Egypt from one of the worst famines. If you think about it – Joseph along with his team was the first one to come up with the “Harvest-Tax-Store-Consume” business model much ahead of the famine (i.e. recession in today’s terminology) as opposed to the prevailing business model of that era (Harvest and Consume). The impact of his team's genius work was that all the countries in and around Egypt was spared of starvation (i.e. recovery in today’s terminology) during the famine.


Bottom Line: Buddha’s five horse analogy within the context of Joseph’s life is a great case study for today’s business leaders – as balancing these five horses on a daily basis will not only make our corporations a best in class incubator for purpose-profit balanced leaders, but also producing highly sought after destiny-focused decision makers like Joseph. Healthy, yet impactful destiny balanced decisions on a daily basis increases productivity of the employees, enhances the morale, increases the perceived value to consumers; produces healthy financial results, better stock prices and dividends for the investors and other stakeholders.

Transforming “WHAT ABOUT/SO WHAT” questions in to tug-of-war like “SO THAT” Strategies based Causal Chain.

Courtesy: Google Images


Over the weekend, I heard a message - that the number one reason most prayers go unanswered is because we fail to get the “SO THAT” (or motive /purpose) part correct within our hearts – instead, we end up spending too much time asking the “WHAT ABOUT/SO WHAT” type of questions - which kind of reminds me of the reason why most business strategies go unimplemented as well. As it turns out, most strategies end up being put on the shelves is because we fail to get the “SO THAT” (or purpose) part correct -and end up spending too much time answering the “WHAT ABOUT/SO WHAT” type of questions within the larger context of purpose-profit balanced equation. What do I mean by that? The purpose-profit balanced equation, in its essence is coming up with the right set of balanced strategy questions - with an end goal of formulating a purpose-profit balanced strategy causal chain (http://strategywithapurpose.blogspot.com/2010/06/purpose-driven-systemic-strategic.html). The strategy causal chain - in my opinion – is the missing link- that is needed to transform the so called “WHAT ABOUT/SO WHAT” questions in to an outcome (or execution) based “SO THAT” strategies. In other words, strategy causal chain is the sequence of cause and effect based strategy actions leading up to the final effect (or outcome), where each element of the sequence causes its succeeding element with an execution focused action/answer.

A very important challenge of forming the strategy causal chain is arriving at the “good enough” length with a proper tension, similar to that of a tug-of-war chain – or arriving at the appropriate amount of time we must be spending on answering the follow-on “what about/so what” questions. If the chain is too short, strategic planning itself will become trivial and so does its sub-actions. On the other hand, as the chain lengthens- strategic planning slowly loses its momentum (& focus) and eventually do not get implemented. So, failure on both fronts can result in inaction -and so managing the length of the strategy causal chain (with a proper tension like a tug of war), perhaps is the most important part of the strategic planning process as it has a direct correlation to the business impact or outcome. The challenging part, though, is arriving at that optimum length (with a proper tension) – which by the way is decided by the way we go about answering the key strategy questions without falling in to the so called WHAT ABOUT and SO WHAT question traps.

Those of us who have gone through the large scale cross-functional strategic planning efforts would hopefully relate to this - while the early-stage hypothesis or ideas usually come with a great potential (and enthusiasm) from various quarters, they also come with their own share of uncertainties – partly, because of the lack of data to substantiate them. This is where – if one is not careful -the so called “what about and/or so what” questions can do more harm than benefit – and end up killing those early momentum/enthusiasms, especially within disruptive innovation initiatives.

· What about the market size? Are we sure that these ball park numbers are right?
· What about the competitive landscape? Is it possible to model the landscape to assess the impact of us entering that space?
· What about margin numbers? Are they realistic?
· What about the Profits? Has anyone done the profit pool analysis?
· What about the risk factors? Has anyone done proper risk model analysis?

While these are all valid follow-on questions, if we are not careful – sometimes these questions will never stop -and go in to an infinite loop of analysis/paralysis mode -and eventually bringing the whole strategic planning effort to its knees. Granted, the intentions of the questions are valid — but the problem, though, is what follows those "what about/so what" questions. The result from most of these questions- invariably- is to conduct further research and analysis which means delayed action or execution.

Don’t get me wrong - asking the follow-on “questions" by themselves are not bad as long as they are asked within the right context (& for the right type of problem we are trying to solve). It is a balancing act as asking the right questions within the right context is a skill only few folks are good at. To find that right balance, we need to first understand the human decision making process so that we can comprehend why some folks ask those diverging set of “what about/so what questions”.

By and large, depending upon the data or facts available to us (& risk tolerance level), we pick and choose one of the following decision making/problem solving methods. We tend to go from one side of the spectrum to the other side depending upon the amount of data available to us to make decisions.

1. “Shoot at the dot” method
2. “Connect the dots” method
3. “Hypothesis based” method
4. “Framework based” method
5. “Mathematical model” method
6. “Repeatable process” method

We usually settle down with the “shoot at the dot” or “connect the dots” methods when we try to solve a problem with less or no data at all. Interestingly enough, these two methods are more of ART type methods and folks with right brain thinking skills are usually good at arriving at the right decisions using these methods. “Hypothesis based” method is most commonly used within the Strategy problem solving space and in general we can arrive at a reasonably sound decision with this method. “Framework based” method is also common in strategy arena, but more widely used in the pure sciences. “Mathematical model” method is more common in applied sciences/engineering fields whereas repeatable process is used in life sensitive/R&D decision making situations. As we navigate across this spectrum, most of the disruptive innovation problems fall within the realm of methods #1 or #2 whereas traditional strategy problems fall within realm of #3 and #4 and scientific/R&D problems fall within the realm of #5 and #6. Rightfully so, the methods within this spectrum starts first with the “ART” characteristics and finally ends with the “SCIENCE” characteristics.

With this prelude- let us come back to the “what about questions” - which in general are diverging in nature (i.e. they create more options) and are typically asked by left brain thinkers whereas “so what” type questions are converging in nature (synthesis/insight focused and so eliminate options) and typically asked by right brain thinkers. The point is that both types of questions are asked with right intentions, but the problem is asking wrong set of diverging questions (e.g. “what about/so what” questions) for the wrong problem space and context (e.g. disruptive innovation) – which invariably will delay the execution – resulting in killing innovations in early stages.

This is where we need to step back – and work towards establishing the missing link – or the so called “good enough” strategy causal chain - which inherently will help us to ask the right set of balanced questions with an optimum amount of details - that is good enough to solve the current problem at hand instead of boiling the whole ocean. In other words, while answering the questions – one has to agree on the larger purpose or the so called “so that” root cause of the chain first before answering the “what about/so what” based effect part. The cause-effect relationship is key – i.e. identifying the root cause or the purpose part will eventually make the effect part to fall in place within the context of the purpose profit balanced strategy equation. Formulating the causal chain with the purpose (cause) part on one end -that is chained together to the profit (effect) part on the other end (like a tug of war as outlined in the top of the page)-is what that transforms “WHAT ABOUT /SO WHAT” questions in to “SO THAT” Strategy based Causal Chain.

Finally, let us face it- it is not worth to put those well thought out strategies on the shelf -and so it is time to step back and take a balanced approach when it comes to strategic planning – i.e. forming the strategy causal chain, which not only helps us to transform the “what about/so what” questions in to “so that” strategies, but also helps us to be purpose focused.