I work in the Office of the CTO. My boss is Jon Pittman, who is the Autodesk VP of Corporate Strategy. Jon has also been a Lecturer at the Haas School of Business of the University of California at Berkeley. One of the elements of our strategy is exploring what capabilities are needed by our customers to design places, things, and media in an everything-is-connected world. We're also investigating what the educational experience should be to prepare students to use such tools. As part of studying this first-hand, Jon has 149 connected devices at his home.
Over the years, Jon and I have had many discussions about strategy. Recently, Jon put some of his ideas to paper. With Jon's permission, I thought I would share them with It's Alive in the Lab readers who might also be interested in strategy.
Strategy creates competitive separation by deploying resources to meet constantly changing external demands. Strategy occurs at multiple levels and with different purposes:
Corporate Strategy is about maximizing the value and effectiveness of an entire organization. It involves selecting, developing, and orchestrating the shared capabilities and defining characteristics (e.g., customer-centric) that make the whole greater than the sum of its parts. It is the purview of senior leadership but must be done dispassionately and independently — because ultimately it is about tradeoffs and resource allocation among the various constituencies. Corporate strategy transcends industry strategy.
Industry Strategy is about determining the appropriate market segments, value proposition, and offerings to serve a particular industry. In divisionalized companies, this is synonymous with division strategy. It is intensely focused on particular customer segments, their needs, and competitors. It is typically the purview of the marketing and product teams focused on a particular industry.
Market Strategy and Planning is about taking a strategy to market. It involves aligning marketing and sales to most effectively communicate with customers and drive sales behavior to execute the strategy. It is typically the purview of the marketing and sales teams focused on a particular industry.
For companies to avoid becoming formulaic about strategy where each division "just puts one foot in front of the other" by adopting an incremental product plan as strategy:
- Strategy is a way of thinking. It is more about mindset than toolset.
- Tools, frameworks, and processes can support strategy, but they do not substitute for strategic thinking.
- Strategy is about creating competitive separation. This requires providing goods or services that:
- Customers value highly.
- Leverage the core competencies of the company.
- Competitors find hard to replicate.
- Strategy is about making choices about what to do and what not to do.
- Strategy is different from operational excellence. Running a company more efficiently does not create competitive separation, only lower costs.
- Strategy creates the context for and drives planning. Planning does not create strategy.
- Strategy is situational. There is no one strategy that always works. An effective strategy is based on capabilities of the organization, the nature of competition, and how the company meets customer needs.
- Storytelling makes strategy concrete, meaningful, and widely-held.
Corporate strategy was originally born as a discipline in the 1960s. It was very financially-driven and focused on portfolio management of large conglomerates. That approach has been largely discredited. As such, the traditional, analytic view of strategy is losing traction. Much of the challenge in strategy today is a failure of the imagination. There is a very interesting trend of strategy and design coming together. A couple of years ago McKinsey bought Lunar, a design firm here in San Francisco, Deloitte bought Doblin, and recently Boston Consulting Group bought Maya Design. All of these big-name, high-profile, heavy analysis firms are buying design firms to help their clients with strategy work. This also reflects the importance of storytelling in strategy.
By its nature, corporate strategy intentionally creates tension in the system that must be managed — and not optimized away. It creates tension along three key dimensions.
Whole system vs. components — Corporate strategy focuses on optimizing the whole as a system rather than optimizing the individual components. It emphasizes integration, sharing, and interdependency vs. silos and independence. It emphasizes the connections – and threads together existing, emerging, and future products and services. It drives convergence rather than divergence.
Creation vs. dissemination of strategy, thought leadership, and stories — Development of strategy, thought leadership, and stories is a messy, creative process. It is more akin to experimentation. It is an act of synthesis that requires the right combination of divergent and convergent thinking. It requires dialog and engagement with customers and outside thought leaders. It requires a longer focal length and different competencies than the competencies required for disseminating the above.
Strategic Importance vs. operational urgency — Strategy unfolds over time and is thus, long-term and big picture. It is easy for operationally urgent issues to overwhelm strategically important issues. It is important to make sure companies balance long-term importance with short-term operational urgency. That is the only way companies make progress and create the systems, structures, and processes that prevent operational urgency.
As a Design/Make/Use tool provider, Autodesk has always been an automation company, and today more than ever that means that our strategy is to help people make more things, better things, with less; more and better in terms of increasing efficiency, performance, quality, and innovation; less in terms of time, resources, and negative impacts (e.g., social, environmental).
Strategy is alive in the lab.