Silicon Valley State of Mind, a blog by John Weathington, "The Science of Success"
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    Welcome to a Silicon Valley State of Mind, thoughts tips and advice based on the consulting work of John Weathington, "Silicon Valley's Top Information Strategist."

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Silicon Valley State of Mind

Tips, thoughts, and advice based on the consulting work of John Weathington, "The Science of Success."

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Strategy

Strategy is the framework that guides the decisions that determine what your company will be in the next three to five years. Most people don't understand what strategy is, so it's no surprise that they get it wrong. Here are my tips, tricks and advice for making sure you get strategy right.

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Happy Tuesday, folks! I hope everyone had a fun and relaxing Memorial Day weekend. I sure did; Kim and I lounged around all weekend, usually doing something close to nothing. If you know me at all, you know cooking was on the agenda; however, this year I went a little mellow compared to some of the other holidays. I need to drop some pounds, so I started on Atkins a few weeks back. It’s going pretty well so far; I’m down about 7 or 8 pounds. One adjustment that I thought was going to be tough was eating more vegetables; however, it has pleasantly turned out well. The key I’ve found is this: the right ingredients make all the difference—that’s true with diets and it’s true with strategy.

One thing I’ve really grown to love is tomatoes. Before starting the diet, I would rarely eat tomatoes; however, now I eat two to three every day. And now that I’m a tomato connoisseur, I’ve noticed that not all tomatoes are created equal. Sure, Roma tomatoes will not taste like Beefsteak tomatoes. What matters more though is where I get the tomatoes from. The tomatoes from Safeway aren’t as good as the same type of tomatoes from Whole Foods; and these aren’t as good as the same type of tomatoes from Windmill Farms (they carry a lot of fresh produce from local farmers). The tomatoes on the vine at Windmill Farms are awesome and the same type of tomatoes from Safeway are barely okay, even though they look similar.

Selecting people for your strategy—whether they’re full-time employees or consultants—is like selecting tomatoes. The talent differential between average, good, and great is sizable; and looks can be deceiving. It astounds me every time I come across someone from a big-name firm like McKinsey, Deloitte, or Accenture, who doesn’t know the difference between strategy and long-range planning. Or, an Executive Vice President with an MBA who cannot make a decision.

One of the critical elements of executing a successful strategy, is making sure you have the right people on your team. Selection is crucial—you don’t want to end up with a bunch of sour tomatoes.

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How many management consultants does it take to change a light bulb?

Well, it depends; let’s first understand why you feel light bulbs are necessary.

(I’m kidding)

Actually, I had a light bulb moment yesterday—literally. We have a small chandelier in our entry way that blew its last bulb this past weekend, so my first order of business was to shed light on the situation (pun intended). Once I got up on the ladder, I realized I had a situation. I could not reach the light bulbs because there was a grey, metal diffuser in the way. It’s there so that people upstairs looking down don’t get blinded by staring directly into the bulbs. The only solution that came to mind was to remove the large, heavy, glass base of the contraption. So that’s what I did.

Before long, I was screaming to my wife for help. I’m balancing on the third step of a ladder holding a heavy, delicate ornament in one hand and the knobs that hold it in place in the other. Fortunately, Kim quickly came to the rescue and I was able to change out the light bulbs without breaking my neck.

Later that day, I stopped into the lighting store where we bought the chandelier and told my story to the owner. He patiently waited for me to finish my story, smiled, paused, then explained to me that I should have removed the diffuser—not the huge glass bowl at the bottom.

Good information not only increases strategic effectiveness and efficiency, but it also reduces risk. I talked about this yesterday when I was commenting on the awful bombings at the Boston Marathon. In my chandelier episode yesterday, I got the result I was looking for—light where there was no light. However, I could have arrived at the same result with much less risk, had I known about removing the diffuser instead of the base.

I’m not making that mistake again. Fortunately, I see the light now.

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I’m still struggling to process how anyone thinks it’s okay to set off a bomb in the middle of a crowd of innocent people over a difference of ideals. I was in the dentist’s chair this afternoon when my wife sent me a text succinctly detailing the awful Boston Marathon bombing. I couldn’t believe it—and still can’t. It’s unfortunate that a plot like this actually succeeds; however, I’m thankful for all the terrorist plots against our people that don’t. Although I talk a lot about using information for strategy and innovation, information prowess is also a powerful tool to mitigate critical risks.

It’s hard to notice non-events because they aren’t conspicuous; however, it’s remarkable to think about all the terrorist plots that were attempted and failed. Our intelligence agencies work with our enforcement agencies around the clock to monitor and intercept all the crazy schemes devised to harm and kill Americans. At times like this, President Obama reminds us, our friends, and our enemies how serious we are about justice around these matters. The combination of leadership and information prowess keeps critical risks from surfacing. The unfortunate event in Boston today is the exception that makes the rule.

All strategy is vulnerable to the effects of critical risks—not only those that involve Big Data or some other form of information exploitation. Your degree of analytic capability has a direct impact on how well you mitigate these risks. You can see this in action with Santam, South Africa’s largest short-term insurance provider. With big data and predictive analytics, Santam was able to save millions that were previously lost to insurance fraud.

Mitigating critical risks is an important part of any leader’s strategy. If the stakes are high enough, it may make sense to assemble a big data team for the sole purpose of making sure nothing happens. Regardless, take some time today to see where advanced analytics might neutralize your biggest risks.

My sincere condolences to those affected by the Boston Marathon bombings

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My wife just bought me a great cookbook by Faye Porter called, At My Grandmother’s Table: Heartwarming Stories & Cherished Recipes from the South. When I’m not out helping executives turn their chaotic data into strategic wisdom, I’m often found in the kitchen or the backyard cookin’ up something good. I love to cook and I like to experiment with new ideas; but I absolutely love old-fashioned cooking (methods and recipes). Although you must always be innovating, some of the best ideas come from the wisdom that precedes us.

For instance, look at the way I define Big Data for use in a competitive business strategy:

Big data is the massive amount of rapidly moving and freely available data that potentially serves a valuable and unique need in the marketplace, but is extremely expensive and difficult to mine by traditional means

I opened up TechRepublic’s Big Data Analytics Blog with my seminal post, Big Data defined, wherein I systematically explained this definition using the underpinnings of Michael Porter’s five forces analysis. Although Porter put out these ideas in the 1980s, they’re still relevant for academic discussions on strategy and for evolutionary derivatives as I did with defining Big Data for strategic competitive reasons.

With all the charm brought about by the novelty of Big Data, it’s easy to lose sight of the the past—this is a mistake. We have a wonderful repository leadership and management theories and ideas that date back to Taylorism in the early 1900s: and all the way back to the history of time if you study leaders qualitatively. Bringing these ideas current is a talent you should embrace.

Now, I’m off to embrace Grandma Elizabeth Robertson Smith’s Crumb Top Apple Pie.

Have a great weekend, everybody!

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We’ve recently been entertaining some uninvited visitors in our cement pond. A couple of months ago, a cute avian couple landed in our swimming pool to hang out for the day. I knew it was a couple because male ducks are much more colorful than females. At the time, my wife felt compelled to feed them; they ate well, feasting on our 9-grain bread and stoneground wheat crackers. Well, the word got out, and now our pool is a popular hangout among the duck community. Although it was a bit surprising at first to be greeted by ducks in the morning, the truth is—they were here before we were here. Survival requires adaptation.

I had this epiphany a few months back when I saw a band of coyotes emerge from a nearby creek. It startled me at first, then I quickly realized that there were children playing at the grade school a block away that would not be thrilled to have coyotes join their fun, so my wife immediately called the school and I called animal services. That’s when I received my education. After assuring me that the coyotes were no threat, the gentleman kindly explained to me that we moved into their territory—not the other way around. The wildlife around here has had to make some significant adjustments over the last few decades to accommodate the disruption we call suburban progress. It was an unwelcome change for the incumbent fauna; however, survival requires adaptation.

To survive today, leaders must focus on keeping their organizations adaptable. Martin Reeves and Mike Deimler, partners at the Boston Consulting Group, assert that today’s companies must adjust their strategic focus from building out one strong competence to learning new things quickly (Reeves & Deimler, 2011, p. 137). I agree, provided your organization is suspect to wildly changing external conditions. This ideology ostensibly flies in the face of traditional strategy planning where a long-term vision is articulated; however—for some companies—survival requires adaptation.

If you’re trying to run a company where the rules of engagement keep changing, think about where your focus is. To be successful on a traditional program, you must firmly focus on what will be delivered; however, to be successful on an agile program, you must firmly focus on how it’s being delivered—with a deep respect for the effect change will have on the evolution of your product and how this change will be managed.

Take some time to evaluate your environment. If you sense radical disruption, you may want to focus more on adaptability than your articulated vision. This doesn’t mean abandoning your mission—this is your reason for existence. However, a radically changing external environment has engendered a different attitude in leaders who are running successful organizations. If this is your situation, adaptation is your only answer. If ducks and coyotes can do it, I’m sure you can figure it out.

References:

Reeves, M., & Deimler, M. (2011). Adaptability: The new competitive advantage. Harvard Business Review, 89(7/8), 134-141.

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I went into my bank last week, and I thought I walked into the wrong building. I’ve banked there for at least 10 years now, building relationships with all the tellers and account managers. I go there frequently, at least a few times a month; however, last week when I walked in, I didn’t recognize one person. You cannot build a relationship with your clients if you’re constantly introducing them to new people.

The foundation of your relationship strategy is the people that interact with your customers. There are other things that contribute to customer loyalty like your brand; however, any real relationship involves at least two people: your customer and the person in your organization that comes in contact with your customer.

Banks have a bad reputation for turnover, so seeing one or two people leave is disappointing and demeritorious, but doesn’t really come as a surprise. Last week however, was jolting. There were at least a dozen people working in the bank, and I didn’t recognize anybody. I made a comment to the teller asking, “Where did everybody go?” I started naming names, and one-by-one, she notified me that they had either transferred to another branch, or left “for a better opportunity.”

For me, this isn’t my bank anymore. I’m not leaving or canceling any of my accounts, but it’s just another place for transactions now. I can get the same experience at the grocery store, and since I shop more often than transact with the bank, I probably won’t go to my branch anymore. It’s a shame when I feel more comfortable picking up Chinese food than sitting down with my banker to discuss a loan.

Employee retention is vital in all areas of your organization, but especially where these employees touch your customers. Whether you like it or not, your customers are more loyal to the people in your company than your company’s brand or values. If your employees are leaving for better opportunities, your customers are probably walking right behind them.

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Ebay announced earlier this week that it was shutting down the sale of metaphysical goods and services on its site, including psychic readings, potions, spells, and fortune telling. They should have also included some strategy formulation in this category. When you hire big consulting firms to build fancy strategies for you, are you buying a real vision, or a very expensive love potion?

In addition to information strategy formulation, I deal with all strategy execution, so I clean up these messes all the time. A small army of nicely-dressed consultants brandishing impressive credentials and expensive pens swoop in to patronize your company with an “environmental analysis,” then proceed to pontificate through glimmering, buzzword-ridden PowerPoint about the latest management theories coming out of Harvard. Then, with one of their hands shaking your hand, and the other holding your big check, they’re out the door to repeat the process with your competitors. That’s about the time you call me to ask, “John, how do we make this work now?”

Thanks a lot.

When I step into a situation like this, I don’t automatically look for problems with the strategy; however, it must be vetted. That’ doesn’t mean I correct their paper, it just means that to mobilize a strategy, certain things must be in place.

Strategy execution is very different from project or program execution. With program execution, you execute tasks to complete a relatively short-term objective. With strategy execution you monitor assumptions and consider possibilities and alternatives to move toward a relatively long-term vision. So, to vet a strategy, you must document and support your assumptions about the future. Until you do this, there’s no way to responsibly mobilize your strategy.

Unfortunately, in going through this process, you often see the big-strategy spell dissipate. It’s a painful realization; however, it’s better than spending the next three to five years committing resources to a strategy that won’t work.

Although the sale of metaphysical services has been part of Ebay since its inception, they finally decided to pull the plug, because customer service is tired of people complaining that their $20 love potion didn’t work. Who are you going to call when your $250,000 love potion doesn’t work?

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Is it possible to be too nice to customers? Is it possible to overdo customer service? Are there damaging effects to exceeding your strategic goals with customer relationships? These are interesting questions to consider; let me share some of my ideas on the topic.

There was a period a few years back when my local Safeway was treating me way too nice. I couldn’t get down one aisle without three different clerks stopping to ask me if I was finding everything okay. If I did happen to need some help finding something, you would think I was rushing into a hospital with a severed arm, desperately in need of boxed macaroni and cheese. Maybe some people appreciated the experience, but for me it was too much.

As you can tell through my discussions about The Orient Express and Sage Vets, I’m a big fan of customer service. It’s more for professional reasons than personal reasons. Although my practice heavily revolves around information strategy, in my view, the best intended use of information is to please customers.

I don’t think you can go too far with customer service, but I do think you can aim for the wrong mark. For customer service to be effective, it needs to be perceived by the customer as valuable and helpful. What Safeway did back then (they’ve since corrected things) was paved with good intentions, but we all know where that road sometimes leads us. The experience was actually annoying for me, not valuable or helpful.

To be sure, you must be in touch with your clients and customers. Talk to them; conduct interviews, surveys, and focus groups as appropriate. Or, have an independent third party shop your business and relay what the experience was like. Get accurate market information, and keep good score. These are the kinds of metrics you should be tracking, not the number of hits on your website.

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The acquisition of Frommer’s by Google is interesting to me. Of course, Google is a paragon of how to exploit information, so any move they make is interesting to me.

There’s plenty of speculation on what Google intends to do with the company, and its famous travel guide. There’s an obvious connection between this and the recent acquisition of Zagat, the restaurant guide, and travel software company ITA. Perhaps they’re making a strong move in the travel industry? They’re perhaps mounting an attack against the likes of Expedia and Orbitz?

Perhaps.

Google is full of surprises, and they always deliver on their promise of innovating in every corner possible.

What I like from an information strategy standpoint is that they’re not trying to bake everything in-house. They’ve certainly built an internal culture that fosters innovation, and information innovation is no exception. However, they also understand there’s more than one way to flip a floppy. When you start considering the best ways to exploit information, acquisition is a very solid strategy, as long as you have the competence for merging/acquiring businesses. Frommer’s is their 116th acquisition, and their stable includes some giants like YouTube, DoubleClick, and Motorola Mobility. By this time, I think they have the formula down.

“Buy versus build” decisions apply to more than just software. If there’s a company out there with valuable, proprietary information that you can exploit, why not make an offer? The worst they can say is no.

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Over the weekend we received this wonderful gift from Sage Centers for Veterinary Specialty and Emergency Care. It’s not expensive or elaborate, just a hand-made craft with a picture of Lacy surrounded by congratulatory messages from all the doctors and nurses that took care of her over the last few weeks.

Lacy, our wonderful and perfect darling of the family was diagnosed with squamous cell carcinoma (yes, malignant cancer) a couple of months ago, and the wonderful staff at Sage have been nothing but courteous and professional throughout the whole process of excising the tumor, administering radiation treatment for three weeks, and following up with post-radiation treatments. Her checkup last Thursday was nothing but good news—she’s doing extremely well, and she will be ready for chemotherapy in just a couple of weeks. So, the staff at Sage decided to send us a nice “congratulations,” on the great progress she has made so far.

Sage continues to impress us with not only their professionalism, but their personal touch. As you can see by their Yelp reviews, they take their customer relationships very seriously. They’ve been awesome to this point, but I never expected anything like this. In my opinion, this is over the top.

Relationships are a key component to any business. For any company to have this kind of affect on so many people, there’s more than excellent customer service in play—this is proper execution on a relationship strategy. This is the secret to building long-term customer loyalty; something vital in today’s competitive environment. Relationships must be part of your strategy, and contemplated by the CEO and top management in the same discussion with what products will be offered and what markets will be served. Like anything else in your strategy, you can choose to be competitive, distinctive, or breakthrough. If you choose to pursue a breakthrough relationship strategy, you don’t need to spend a lot of money, but you do need to make a very strong impression on your customers: over and above what they normally experience. Sure, I get cards in the mail at Christmas time from my dentist; however, this is playing at a completely different level!

A couple of weeks ago I talked about The Orient Express, and now Sage. To be honest, I can count on one hand the number of companies that have this level of loyalty with me, and none of them have to do with utilities, financial services, or travel and hospitality. What have you done lately to show your customers how much you appreciate their business? If you value your customer base, you don’t want your competition to come up with a better answer.

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