HBR: Four common flaws in Strategic Planning

From HBR there is a very interesting post about four common flags in strategic planning:

• "Skipping Rigorous Analysis
  Many managers believe their business experience and knowledge base alone equips them with all the information they need to conduct effective strategic planning. This belief is almost always untrue and serves only to undermine the kind of critical thinking from which truly creative strategies are born.

• Believing Strategy Can Be Built in a Day
  Yet many executive teams earnestly believe that effective strategies can be identified, explored, and agreed upon during abbreviated offsite meetings where the main driver of the agenda is the timing of snack breaks.

• Failing to Link Strategic Planning with Strategic Execution
  According to a recent survey by the Conference Board, execution overall and strategy execution in particular hold the first and second positions when it comes to "top issues" in executive's minds. It's no wonder — executing strategy requires the work of the entire organization, whereas strategic planning only requires the top team. But part of a top team's challenge in execution often stems from the failure to link their work with ongoing strategy execution.

• Dodging Strategy Review Meetings
  Strategic plans quickly become obsolete when there is no activity in place to keep them alive. Worse, managers sometimes feel freed from execution accountability when reviews are continually rescheduled or dropped from the calendar altogether."

These common flags are very important to be considered and avoided in the Strategic Design and Planning of Services phase in the service life-cycle. However, these are also relevant in the complete cycle.

Amazon Kindle : e-books as a Service

E-books readers are devices that use e-ink technology to offer a book-like experience thanks to an easy to read screen, enabling users to keep reading for many hours without headaches.

There are many of e-book readers, but the most important ones are the Amazon Kindle and Sony Reader. The Sony Reader supports more e-books formats than Amazon and also offer a model with touch screen, but it's e-book store is weak. You can't find all the books that Amazon has.

Sony it's a hardware oriented company that use an e-book store to sell more Sony Readers. In the other hand, Amazon it's a e-book provider that use a e-book reader platform to sell many books as possible.

Amazon complemented their offer with the Kindle for iPhone, that introduced a new feature called whispersync (Fig 1). This functionality lets you synchronize your readings between your Kindle e-book reader with your Kindle for iPhone. For example, you can use your iPhone to read when you are in the subway or waiting in a queue. But when you are at home relaxed in your sofa, you continue your experience with the Kindle e-book reader at the same page that you left the Kindle for iPhone.

Fig.1. The whispersync offers great value, letting the users to sync their iPhone application with the Kindle reader.

Amazon's strategy shifted from the Product Oriented Kindle e-book reader with an e-book store to a Service Oriented Kindle, offering a total customer experience thanks to the richer interactions that are delivered trough the Kindle e-book reader and the Kindle for iPhone, enabling the customer to co-create value (Fig.2). The iPhone application is not trying to cannibalize the Kindle e-book reader, in deed Kindle for iPhone will engage more users to the Kindle service. Amazon is not an electronics manufacturer, it's the biggest bookstore on the planet that is aiming to be the biggest e-book store on the planet.

Fig.2. The users of the Amazon Kindle service can co-create value thank to the rich interactions delivered by iPhone and the e-reader.

The shift form product to service of Amazon Kindle is the greatest differentiation with the competition. They can't compete to the value that offer "e-books as a Service", where the service use the devices to sell e-books.

Service Innovation : Smartphones. Service Inside! Synchronization as a service

Apple redefined the smartphone with the iPhone, a sleek device with an excellent user interface controlled by your fingers through a touch screen. Apple enhanced even more the customer experience integrating an Application Store. Applying the same strategy form from iPod+iTunes, as we discussed in a previous post, where the user co-create value thanks to the mix of product and services.

Today, is not possible to bring just a product, the new smartphone operating systems like Google 's Android, offer services out-of-the box . Including an applications store called Android Market and Google services like Gmail and Calendar that provides front-stage interaction to their back-stage servers. You no longer need to backup your mail, every Google application is synchronized with Google's servers (Video 1). All these services and new ones like the Google latitude for location sharing, enable the user to get a great costumer experience with richer interactions. Right now, even Microsoft is trying to include services into their windows mobile, with myphone you will able to backup your contacts and appointments.

Video 1: Google Android

Palm took the serivce integration further, with a new operating system called WebOS. The new Palm's Operating System use "cloud computing" (or Internet as a Service, that is an emerging tendency which allows to companies use higher processing capacities from third parties with less costs for them) to do server side processing from your information sources (not just Google's applications, like Android) that are available to the user trough a single mobile interface provided with the new Palm Pre.

The fundamental concept behind the WebOS is Synergy, that takes synchronization as a service. When you add an appointment or modify a contact in the smartphone, the changes will be synchronized into the palm's cloud. This Synergy happens from many sources, like Facebook. So, when you add a friend in your Facebook account, it will be reflected in your phone contacts, even if you got a repeated contact (same contact form different sources), it will be unified at a single one at your contacts application in the smartphone (Video 2).

Video 2: Palm Pre WebOS Synergy

The innovation from Palm is driven by services out of the box from different providers, where you no longer need to synchronize your data with your computer. All the synchronization happens in the Palm's servers from different kind of sources. This service innovation takes the smartphone user experience a step further, with richer interactions that let users to co-create value. Palm is back from the dead with a great value offer that sets a new trend in mobile devices.

Designing either ethical or disturbing services?

Today, two interesting posts (WSJ and CNET) about a new web-based service was published. These posts refer the SmartyCard service. That allows parents to reward their children when they learn different matters like math, technology and social and cultural studies among other, playing into the site.
Both post have pointed the ethical concerns. These concerns rise as you try to find the innovative side of that service. So, ethical and moral concerns must rule innovative ideas. Successful companies like "IBM and P&G are bright spots on values and ethics". Rosabeth Moss Kanter says:

"...the sense of social mission that accompanies the business mission keeps people focused on the importance of their work to solving societal problems. The resulting innovations help the companies in tough as well as easy times".

Therefore, it's not only about invent new things and make money with new efforts. The most Innovative companies must be distinguished by their Role value and their ability for "doing a nice thing once, doing it again, and doing something completely differently, again and again ..." (Scott Anthony at HBR)

Understanding consumers?

It's not new trying to understand consumer minds. A recent study reveals a interesting consumer choice mechanism. That is, a user can easier choose a product out of three:

"... when making a choice between only two, equally preferred options; subjects tended to display irritation because of the difficulty of the choice process. The presence of the third option made the choice process easier and relatively more pleasurable."

A Nielsen's study shows different consumer mindsets: “Indifferent” and ”Blinkered” Modes, "Browsing” Mode, “Buzz” Mode, and “Bargain-Activated” Mode.
These shopping modes influence buying decisions and consumer behaviors.

However, in the current Downturn the consumers "have re-focused on the essentials: “If you can’t eat it, you don’t need it.” Higher incomes have not been immune: the shopping and spending habits of all income levels have been affected by the economy" - a Nielsen's post says.
So, manufacturing "opportunities will be found by aligning with evolving consumer behaviors such as fulfilling basic over discretionary needs, trading down and a focus on value".




And, what about Services? well, services also have to be designed taking all these consumer concerns. Moreover, services have to properly connect the back-stage with the front-stage. So, services are seamlessly designed bringing the highest satisfaction and most valuable experience to the consumers. And consumers are willing to pay that experience and by "the need to have it". Service providers must be will to service excellence and consumer loyalty.



Broadeep helps companies to co-create value on their services, aiming to Consumer Loyalty. More information at http://www.broadeep.com.

Investing in IT Services for Cost Savings and Optimization

On last week, Gartner Inc. has published a press release saying that investing in IT Services represents one of the largest opportunities for Cost Savings and Optimization:

Going forward, the strategy, selection and ongoing management of IT services must become one of the top strategic imperatives for enterprises.

Also, they say:

Managing IT costs is not just about buying the hardware and software. The big spending is in the delivery of IT services to design, build, deploy and manage those assets.

Furthermore, Gartner specialists say that this year is a opportunity for CPM (Corporate Performance Management)

A series of case studies by Gartner of 16 organizations that have corporate performance management software installed showed a reduction in the number of reports -- in some cases from 1,500 to 100 and in other cases a $2.5 million cost savings realized from days reduced in the planning and reporting cycle.