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1ST ANNIVERSARY We take a look back over the past year


Editor’s Letter

Letter From The Editor Welcome to this special edition of Chief Strategy Officer. This issue has been created to celebrate the first year of Chief Strategy Officer, having gone from a thought in January to now the fifth issue with over 10,000 readers worldwide. In the past year we have seen some profound changes in the ways in which some of the largest companies in the world have utilised new strategies. From the use of wearable technologies growing, the ongoing growth in social media and the ways in which companies are utilising these to maximise their potential.

Managing Editor George Hill President Josie King

We have seen the rise of the Chief Innovation Officer, a position that was practically unknown only 18 months ago. Now we have senior executives who have a sole purpose to push forward thinking and new ideas within organisations. This kind of move has not only given a flexibility to strategies, but has also allowed companies to become more open and dynamic places.

Art Director Gavin Bailey

There has also been several high profile cases of companies going from public to private, allowing them to make the best strategy decisions for the company rather than for stockholders, with companies like Blackberry and Dell being two examples.

Advertising Hannah Sturgess

We hope that in the next year we can continue to see these shifts in strategic mindset. We want to thank everybody who has got us to this stage, from those who were willing to put their ideas onto the pages to the people who have shared this on social media and recommended it to others. We would not be at the stage we are at the moment without your help and support. The content within these pages are a selection of the articles that we have found the most thought provoking and that our readers have been talking about. The quality of content that we have seen this year has been fantastic and we want to thank everybody who has written articles for the magazine. As always, if you are interested in writing for us please contact us at and we hope that you enjoy this selection of articles from the last 12 months. George Hill Managing Editor

Assistant Editor Joanna Giddings

Contributors Tim McCausland Yulia Ivanova Michaela JefferyMorrison Niko Karjalainen DJ Francis All Enquiries



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Originally Published Issue

Niko Karjalainen discusses how strategic planning is broken, and how we can fix it


We talked to Robert Harles, Head of Social Media at Bloomberg about how they are using new media


Technology or People? Kevin Rooney looked at which was leading the way in strategy today


DJ Francis discussed how to utilize content strategy in one of the most popular articles from this year


We got an in depth interview with Mark Howard from Forbes, where he discussed their digital successes


We spoke to Mohamad Ali, Chief Strategy Officer at Hewlett Packard, one of the world’s leading technology manufacturers


Anthony Willoughby gave us the lowdown on how he has used a tribal approach to strategies


How do you compete with bigger companies? Timothy McCausland gave us the lowdown


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Fixing Strategic Planning

Fixing Strategic Planning

Niko Karjalainen Senior Director, Strategy, Hertz

Fixing Strategic Planning

Companies need strategy as much as ever. They also need strategic planning, but different to the traditional way of planning based on long cycles, forecasting the future and top-down analysis. What is needed is the capability to consistently identify, rapidly analyse and prioritise strategic opportunities in a changing environment. Is strategy still relevant? It is a brave CEO or a Board that does not spend considerable energy on strategy, be it to take advantage of emerging opportunities or to just survive. The economic turbulence continues in Europe and elsewhere. Competition is not getting any easier and creative destruction reigns: the average tenure of a company in the S&P 500 index decreased from 61 years in 1958 to 25 years in 1980 to only 18 years in 20121 . Customer behavior keeps changing, sometimes in fundamental ways as evidenced by the recent high street retail business failures in the UK. Adding to this are new applications of digital technologies, such as social media. And for those operating in heavily regulated industries, for example in financial services, regulatory changes can render existing business models obsolete. So one can safely venture that the ride is not going to get any smoother soon. Prospering in a turbulent environment requires strategic thinking, analysis and behavior. Relying on operational excellence or best practices is not sufficient. Indeed, continued demand for strategy 1 Innosight (2012): Creative Destruction Whips through Corporate America. Executive Briefing

consulting services, on average 25% of European consulting spend in 2000-102 , provides some evidence of investment in strategic thinking. But if strategy is alive and in demand, why then was strategic planning pronounced dead already a couple of decades ago? What’s wrong with strategic planning? To start with, there is persistent confusion about what is “Strategy” and what is “Strategic Planning”. Strategy is essentially about insights on how to differentiate and create value3. Strategic planning is about making the insights actionable. However, in practice the two concepts are often used synonymously, leading us to think of strategy as a plan. The consequence can be “me too” strategy wrapped in an elaborate execution plan. What are needed are genuine, differentiated insights. A lot has been said about “strategy innovation” as a source of insights4 . Innovation, be it product/service, 2Whittington, R. (2012), “Strategy professionals: strategic planners and strategy consultants”, in Seidl, D. and Jarzabkowski, P. (eds), Strategy as Practice: Theories, methodologies and phenomena. Henry Stewart Talks Ltd, London 3 Porter, Michael (1996): What is Strategy? Harvard Business Review, November-December 4 E.g. Hamel, Gary (2002): Leading the Revolution. How to Thrive in Turbulent Times by Making Innovation a Way of Life. Harvard Business School Press, 2nd edition



Fixing Strategic Planning

enabled by new technology, some may not 5. Formulaic, rigid planning processes further constrain companies’ ability to create true strategic insights. At the same time, the nature of many businesses has changed as customers are able to access information more effectively, contributing to fragmentation of markets and segments. What is needed then is the ability to rapidly identify and analyse a large number of strategic opportunities and pinpoint those where a company has an advantage. Targeting these specific opportunities enables differentiation and creates economic rents 6. Back to basics process or a business model, is important but not the full answer. Too often, innovation processes disconnected from the realities of business end up producing “pink bicycles” - innovation for innovation’s sake. Neither is deploying new (digital) technologies the cure. While most companies probably should be investing in applications of digital technology to stay in the game, merely deploying technology is not a source of differentiation. As with the Internet and “eCommerce” ten-fifteen years ago, the key is to identify and invest in the right strategic opportunities for a particular company. Some of these may be

An answer to making strategic planni-ng more effective is to integrate strategy (creating insights) with planning (making the insights actionable). What follows are a few high-level pointers on how do this within a broader corporate strategy framework. Firstly, create a solid strategic analysis engine to identify, rapidly analyse and prioritise emerging and potential opportunities. To do this, strategists need to get back to basics by acknowledging that strategy itself is primarily an analytical discipline built on the 5 E.g. Karjalainen, Niko (2001): Electronic Business. A Strategic View. WSOY Ekonomia, Finland 6 E.g. Viguerie, Patrick. Smit, Sven. Baghai, Mehrdad (2011): The Granularity of Growth. John Wiley & Sons

Fixing Strategic Planning

foundations of microeconomics, finance, behavioural psychology and other fields. Underpinning the ability to generate truly valuable and relevant insights is hard analytical work at all stages of the process from scanning the environment in a structured way to building a solid business case for investment. Secondly, link the analytical engine to the rest of the organization to draw on expertise from sales and marketing, operations, R&D and other functions. This is both to source the most valuable ideas and to ensure that they are assessed in a realistic way. The ultimate objective should be to disseminate the strategy skillset and the (jargon free parts) of the language of strategy throughout the organization, making strategy work part of the organization’s everyday life. Thirdly, instill a culture of disciplined decision making for investing in the best opportunities. This includes alignment among senior management on a strategic framework for investment, clear view on the financial objectives and the capacity to take regular investment decisions. The objective is not to drip feed money into markets to keep chasing new ideas, but to constantly and consciously question where capital is best put to use, i.e. to make strategic choices. The recommended actions are certainly not a cure-all, but hopefully a step closer to more effective strategic planning.

About the author Niko Karjalainen is Senior Director, Strategy at Hertz. This article is written in personal capacity and all views expressed are the author’s.



Social Media at Bloomberg

Social Media Strategy at Bloomberg, An Interview With Robert Harles George Hill Chief Editor

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Social Media at Bloomberg

36 months ago Bloomberg were still using what many within the organization considered to be the first ever social network. They however were not allowed access to any of the big 3 social media sites until Robert Harles arrived at the company with a new idea for how Bloomberg could not only embrace social media but also use it to build on their incredibly successful original social model. When Robert began at the company he was not surprised that Bloomberg had not allowed their employees to have access to social media at work. This was after all a company who had built their success on a base of trust and accuracy, something that many journalists have found is hard to maintain when utilizing social media. He could understand the reasoning behind this decision as many in the company thought that this kind of access could open pandora’s box. The problem and solution that Robert found at the company was summed up brilliantly when he told me about some of his early encounters: “When I first came on board, people maybe teased me a little bit and say things like ‘how many of our clients are really on social media?’ I would think about it for half a second and I would boldly say ‘Well probably about 99.9%’ they would also say no they aren’t because a lot of institutions they work for ban use of social media during the work day. I would always dig around in my pocket and pull out my smartphone and ask ‘How many have one of these and what do you think

they are doing with those?’ They are subject to a number of restrictions but in truth people are creatures of curiosity so it’s unlikely that you are going to be able to stop them and plug that leaky bucket.” He was also surprised when many employees made the remark that Bloomberg actually had the first social media network, the Terminal. The terminal is a collection of 300,000 contacts all revolving around subjects being discussed across the Bloomberg networks, it also had individual profiles and discussions. This was essentially a social network in its purest form. Using this kind of model made the adoption of social media across the company in a broader sense easier and created a base from which to focus elsewhere. For instance Robert makes clear that last year from this network of 300,000 Bloomberg managed to create $27 Billion in revenue. By comparison Facebook made roughly half that from a network of closer to 1 billion. This shows the importance of focussed subjects and functional conversations amongst similarly minded professionals. Bloomberg have taken this discussion mantra into other social media arenas and Robert makes the point that the point of Bloomberg is that “We

Social Media at Bloomberg


don’t want to get in the way of interactions, we want to facilitate”. This is clearly the reasoning behind the original iteration of the Terminal that has brought them so much success. From Robert’s experiences many companies that try to lead and dominate conversations often find that they are getting in the way of their own success as they become intimidating to others in the discussion. The reason for this is simply that many companies find it difficult to maintain the balance of commercial pressures and good conversation, when one tips too far one way the other suffers. The approach of Bloomberg is “We think about

how to get out the way to deliver whats needed, but let’s let our community source the direction they want to go” The real value of social media however is something that many people have struggled to show. Is it really possible to equate the x number of tweets means x number of sales? Robert has addressed the issues within this by not shying away from the difficult


Social Media at Bloomberg

question, tackling them head on. One of the easy ways to look at this is that connections could become relationships, relationships could then become sales. The move from initial connection through to sale could take considerable time, making it harder to measure, but of no less value to the company. Essentially one of the main reasons that Robert thinks people have adopted social media so readily, especially within niche areas is that people want to feel like they matter. Traditionally, before social media, this would have been done through face to face meetings but with the constraints on time and the availability of those with similar interests through the internet has been the catalyst to spread social media. Anybody can deliver a product or a service, the companies who are really making strides today are those who have managed to create a genuine community. So why is having a strong community such a great thing for

the brand? Robert has likened modern brands to the Seurat painting, ‘Afternoon In The Park’. From far away you can see the broad brushstrokes created by the marketing and communication teams, but once you get closer in you can see all of the dots that make up the painting as a whole. This is the same with brands, the dots are the individuals that make up what the brand represents and in modern times with the use of social media, you have access to the thoughts of these individuals. Therefore, having a clear reasoning behind social media interaction and implementation at Bloomberg, with a team of only 1 or 2, Robert went about making Bloomberg a social brand. Going from top down on this would have made it difficult and would have also made a mass transition untenable, so instead he began to infect the company. By

this he means introducing an

Social Media at Bloomberg


individual to social media then allowing the idea to spread throughout the organisation once people saw the success that this was bringing. In order to make sure that this was being done in a sustainable way and to make sure that there was solid business reasoning behind the transition, rather than going to them, Robert made people come to him. When they did this he made sure that they were giving their business cases for adopting social media. Not only did this mean that they were truly setting themselves targets, but also meant that social media was made to be a true business function rather than a nice to have. According to Robert, Implementing a social media strategy in your organization is similar to getting a puppy, it is not something that you can pick up and put down when things get difficult. You need to put in the time and effort and take care of it every day.

About Robert Harles Robert Harles is Global Head of Social Media at Bloombery LP. The answers in this article are in a personal capacity and all views expressed are no representative of Bloomberg LP.

HIGH IMPACT INNOVATION Too many innovation efforts begin with high hopes but end up in little more than a tall stack of Post-it notes.  Until that’s fixed, innovation can’t be the reliable growth engine you need it to be. The problem is one-sided innovation models, built to solve for the consumer or the business, rather than both. Talk to us about how our two-sided model has transformed innovation impact for many of the word’s great companies.


Technology or People

Tech or People, who is leading? Kevin Rooney Chief Strategy Officer American Access Casualty Company

Technology or People

Before taking on my current role as Chief Strategy Officer at American Access Casualty Company, I had been our CIO for four years. In many ways, it was great preparation for my current role. As CIO, I had a broad view of our overall operations and strong relationships with the other senior executives who were my customers. I also had a passion for technology as a business enabler, especially in industries such as insurance, where data and business intelligence are so critical. At many CIO events, a common question is how to align the business and IT. It drove me crazy then and it drives me even crazier today because the question itself is part of the problem. IT is no more separate from the business than finance, sales, engineering, operations or human resources. All parts of the whole must be aligned, which in essence describes what I attempt to do as CSO. What I had thought separated IT in this alignment question was its function as an enabler and change agent. CIO’s often struggle with the balance of whether the strategy drives technology or the technology should drive strategy. And, while the pace of change in IT is surely breath-taking, my perspective now is that every form of capital an organization has or wishes to acquire (human, technology, financial, cultural, political and on) must be enablers and must be aligned under a common mission

and vision. So this strategy question is much bigger than just technology driven strategy. It is about capability driven strategy, or, even more empowering a thought, about possibility driven strategy. What things are suddenly possible today, or might be possible tomorrow, that can broaden our product and service offering, drive our strategy, and grow our organization? And how do we balance what’s possible with an overall strategy to drive maximum value? To achieve this balance, we must be able to answer four critical things. First, what does the customer value? Second, what are your organization’s capabilities and possibilities? Third, where


can your organization achieve its required returns? Finally, where do those circles overlap? This diagram illustrates the concept: Once these circles were arranged like this, some interesting concepts came to light for me. For example, what happens if your offerings are outside that core intersection? Second, what can you do to expand those circles and therefore increase the value of your organization? If you’re delivering a product that’s not profitable but it’s valued, it’s a loss leader. You better be either focusing on expanding your profitability circle through operational efficiency or cut that offering quickly.


Technology or People

If you’re delivering a product that’s not valued, you risk customer loyalty and brand reputation. You better quickly expand your value circle by convincing the market that your offering is valuable.

leaders. That’s the true balance. Expanding those circles, though, is the exciting part of what we do, and what will sustain our organizations well into the future, whatever possibilities are on the horizon.

If you’re delivering a product that isn’t really possible, you are overpromising and underdelivering. You better quickly expand your possibility circle through innovation. Finding that intersection between what’s valued, what’s possible, and what’s profitable is the role of all of us as business

About the author Kevin Rooney is Chief Strategt Officer at The American Access Casualty Company. This article is written in personal capacity and all views expressed are the author’s.

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Content Strategy

Utilizing Content Strategy to Remain User Focused (Or Avoiding the Nurse Ratched Trap) DJ Francis Content Strategist

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Content Strategy

Few viewers sympathize with antagonist Nurse Ratched in the 1975 film One Flew Over the Cuckoo’s Nest. And much has already been written about the character’s villainy and the well-deserved scorn elicited from many viewers. I contend that it is high time we consider a more empathetic (and fresh) view of Nurse Ratched. After all, this is a woman stuck between hospital administrators wanting one thing and a den full of patients wanting the complete opposite. Given the recent rise of content marketing and other inbound methods, many strategists and brand/ product managers find themselves in similar positions – tasked with producing content ostensibly for business purposes, but aimed at an audience with varying needs and concerns, some much removed from said business purposes. “Wait a second,” you’re thinking, “doesn’t that make ME Nurse Ratched in this scenario?” Maybe more than you think. Employing the tenets of content strategy, however, can ease this tension and provide much-needed focus to your efforts. But only if done correctly. The Fallacy of Zero-Sum Marketing Many of us frame our jobs like Nurse Ratched, as a zero-sum game. We must pick a side because the desires of hospital administrators and patients – or executives and consumers – are mutually exclusive. This is simply not true. And we all know that executive and consumer desires aren’t mutual-

ly exclusive. Look at consumer-focused organizations like Apple, Amazon and Zappos. They have figured out how to do right by the consumer while making a profit. The only difference is the order. They start with the consumer desire and then figure out how to make money. After all, as Peter Drucker said 60 years ago, a company’s primary responsibility is to serve its customers. Profit is not the primary goal. Profit is generally a result of serving customers well. But your company probably isn’t Apple. You probably feel pressure to hit your numbers each quarter whether that means solving a consumer’s problem or not. (More often, not.) To solve this conundrum, many strategists and brand/product managers turn to content strategy to help. After all, content strategy is inherently consumer-focused as the goal is useful, usable and desirable content. However, many strategists and brand/product managers fall into a common trap that perverts their ability to stay userfocused and inevitably poisons their content marketing programs. The Biggest Roadblock to a User-Centric Experience I once had a breathlessly tell me that their internal team had already completed a content


Content Strategy

strategy. They’d just finished a content audit, so they just wanted a once-over from me to ensure everything was perfect. They presented me with a content plan that would have doubtlessly generated content. There was a


spreadsheet with their topics, all of the products and services they would mention, who would write each piece, which department was assigned to edit, etc. The client could certainly have produced this content. The only trouble was that the content they had planned to write was useless to any of their target consumers. They had forgotten a central tenet of business: Strategy is the WHAT and the WHY; Planning is the HOW. They had planned for the content, but had omitted the strategy. My client was using an inbound channel, but treating the content like an outbound asset. They weren’t focused on generating credibility and trust; instead, they wanted to use content to interrupt and talk about their products. Your biggest roadblock to a user-focused experience is often content planning sans strategy because it provides a false line of sight into your content efforts while permitting you to ignore the big picture entirely. 5 Tips to Retain a Relentless Consumer Focus In-house strategists and brand/ product managers should continue to call upon content strategy to guide their content programs and keep them user-focused. At Imagination, we are often brought in to provide perspective and expertise, but remain on projects because of our ability to advocate for the consumer. Here are a few ways other clients have retained a focus on the con-


Content Strategy

sumer and enjoyed the influx of consumer trust (and purchases) that comes with it. 1. Prioritize: For each content program, we learn everything we can about the following five elements. But when making decisions, we remember that this is a prioritized list, with the consumer right at the top.

the piece of content followed by the defined target audience. An insight brief should start with the consumer’s demographic and psychographic info. Build in your consumer focus by starting with the consumer.

a. Consumer b. Business c. Brand d. Competition e. Existing content 2. Be Objective: Start with a list of questions you need to answer to please the end consumer. These aren’t the traditional project brief questions; instead, determine what you need to know to make decisions, then find answers to those questions and only afterwards make your decisions. Forget the corporate B.S. What do your consumers want? Where do they want it and how do they want it delivered? Answer basic questions about your consumer to guide your efforts down the line. 3. Ask “Why?”: You should ask “Why?” so much that it annoys your co-workers. Throw out more “Why?” questions than an average two-year-old. Consider it a red flag if answers include names of internal stakeholders (“Bill wants it that way.”) or the newest shiny object (“Because we want a SnapChat/ Meebo/FaceSpace presence.”). Build it in: If the first column 4. of your audit spreadsheet is a list of products, you are doing it wrong. A content audit should start with

5. Teach: Instead of thinking about promoting a product, consider yourself a teacher here to educate about a consumer solution. Provide information at each step in your purchase cycle and measure your success on consumer-focused metrics (bounce rate, calls into the customer care line). You Can’t Fake Focus The tragedy of One Flew Over the Cuckoo’s Nest is really the meaninglessness of the central power struggle. If Nurse Ratched had simply focused on patient care, she would have inevitably pleased the hospital administrators. Instead, by focusing only on the administrator’s needs, neither administrators nor patients (nor Nurse Ratched) were pleased. The same is true for strategists and brand/product managers. Content planning without content strategy is doomed to

Content Strategy

fail. In the movie, the protagonist is only moved to physical violence against her when Nurse Ratched insists upon the status quo after an upsetting event. Your consumers will not appreciate self-serving content when they are desperate for innovation. After all, the best way to ensure that your content efforts will succeed is to actually empathize. Don’t fall into the Nurse Ratched trap. DJ Francis is the VP, Content Strategy for Imagination, the 2012 content agency of the year. His main goal in life is to help businesses act more like good people. DJ lives in Chicago with his wife and two dogs.


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Forbes’ Digital Strategy

How Forbes’ Digital Strategy Changed Everything, An Interview With Mark Howard George Hill Chief Editor


Forbes’ Digital Strategy

Today strategy is going through a shift in power from those in the boardroom to those who are online. One of the companies that has truly managed to leverage its existing strategic position into a true digital dominance is forbes. With a website that is the envy of many within the industry, as well as digital offerings that have almost no rival, the business media company has truly embraced the new ideas within the digital realm. In 2011, the traffic coming to the forbes site was at a plateau, and wsj was at an almost unassailable point above them, working in the same space and vying for the same audiences. Jump to 2013 and forbes.Com finds itself ahead of wsj.Com with a suite of online services that are propelling the company forwards and seeing them increasingly at the cutting edge of digital offerings. In may 2013, unique vistors to forbes.Com were approximately 25 million (according to comscore worldwide) compared to wsj.Com at 22 million. Traffic on forbes.Com is up 35% since may 2012. Forbes’ digital strategies have not only seen the company catch up with its competitors, but from an internal point of view, its online audience is up more than 100% since june 2010 when forbes. Com was reinvented. This increase in audience has seen the organisation take advantage of a situation that many traditional publishing companies have struggled with.

I was lucky enough to speak with Mark howard, senior vice president, digital advertising strategy at forbes media about the company’s rise to digital prominence. Mark moved across to a strategic role within forbes in january 2012 from his previous digital sales role. This was midway through the digital transformation that has seen forbes come out as a leading digitally led company today. Talking to Mark, I gathered that there were several unique aspects of the forbes online strategy. One of the most interesting aspects was the use of the startup mindset within the digital team. What has set this apart from other companies, is that the digital division of forbes was originally created in 1996 as a completely separate entity from forbes magazine, meaning that a more lean



Forbes’ Digital Strategy

approach could be taken. The profits made by the online side of the company could also be used for further development of digital products, meaning that for the past decade the forbes online offerings have had the opportunities to invest in new and exciting technologies. Mark has described the company as ”we act like a 96 year old start up”, in its mentality towards trying new approaches and new technologies. This has seen an increasing value for advertisers on the site who, using new technologies, can now get a far better roi and can target individuals rather than a relatively generic audience. Using a technology called chart beat, forbes can now track the kind of people who are engaging and sharing this content, meaning that journalists have a better opportunity to create stories that these people want to read. One of the ways in which they are making sure that they can act dynamically and quickly is through the use of their workforce too.

“About 18 months ago we invested heavily in the development of our own design team.” Cloud-based ad creation tools from flite have allowed forbes to create ads or make changes in one or two days that may have taken an agency or freelance staff one or two weeks to do. Moat, a ny-based analytics company, provides deep dive analytical tools for tracking the exposure and engagement users have with ads, ensuring that the online offerings can be flexible and changed depending on their current usages. Mark mentions though that it has been important to not only have the skills in house, but to leverage the mindset of smaller startups. Through partnerships they have managed to create a stack of technology that creates opportunities for them to monetize their online offerings, but also use the mindset that small startups tend to have and the excitement and forward thrust that this brings. Forbes has understood that a modern company cannot look at strategy in the same way as it did even five years ago. In Mark’s words “the rules have changed.” Many of its competitors have seen that their traditional methods of aggregating audiences and selling them as a stack to advertisers, is no longer fit for purpose. Using the new technologies has allowed forbes to target individuals. Forbes now uses a data management platform company, krux, to look at how the individual is engaging with the content and how this can be

Forbes’ Digital Strategy

changed to truly place adverts in front of the right people at the right time. In Mark’s eyes, the social web has democratised the publishing tools that were traditionally open only to publishers a few years ago. Although effective businesses should now see themselves as publishers, Mark makes the point that publishing is one thing, but to make it truly effective, companies need to create a foundation and jumping off point. Companies today need to be made up of storytellers. Consumers want to hear what companies are actually saying, not what they are selling and what they are advertising. This creation of a genuine brand personality rather than the personality that is put forward in press releases or adverts, has reaped rewards for thousands of companies globally and forbes is one of the most successful. With that in mind, forbes created brandvoice, a platform that enables brands to publish thought leadership on forbes.Com, and build a dialogue with the individuals that matter to them. One of the ways in which a strategist can utilise this is through placement. Mark makes the point that strategists in today’s company need to be more than just the navigator, they need to be at the intersection between departments of the company. Communication is key and having a strategically minded person working between the analysts, content creators and

all other aspects of the business is vital to business success. The analysts need to tell the storytellers what is working, the storytellers need to create and the technologists need to make sure that the technology for this continues to not only be fit for task, but improving the company

performance. The strategist needs to sit between all of these groups and make sure that the process is working effectively and is being steered in the right direction. S o where a r e w e



Forbes’ Digital Strategy

likely to see this kind of strategy in five years’ time?

cutting edge of new ideas with lean and flexible companies.

With the rapid rate of change, it is hard to predict where digital strategies will be. It has only been in the past few years that we have seen companies really looking at the way in which their content is received on mobile and tablet devices. This is something that five years ago would not have been considered at all.

One thing that is for certain is that when the next big revolution does come along, thanks to the work of Mark and others within the forbes management team, forbes will be well equipped to make the most of it.

One of the keys to taking advantage of these changes is that companies need to create a firm but flexible foundation from which new developments can grow. The use of internal design teams means that change can be achieved quickly and easily, whilst working with small agile minded startups has meant that the company is keeping on the

About Robert Harles Mark Howard is Chief Revenue Officer at Forbes Media. The answers in this article are in a personal capacity and all views expressed are no representative of Forbes.



Strategy at HP

An Interview With Mohamad Ali, Chief Strategy Officer at HP Michaela Jeffery-Morrison Strategy Summit Organizer

Strategy at HP

I spoke to Mohamad Ali ahead of his presentation at the Chief Strategy Officer Summit in New York on December 5 & 6. Mohamad is Chief Strategy Officer for Hewlett Packard. Most recently, Mohamad was CEO of Aspect’s workforce optimization division. Before joining Aspect, Mohamad served as president of the Avaya’s global services division, and previously as senior vice president responsible for the company’s strategy, corporate development and research labs. Mohamad has also held various senior executive positions at IBM including vice president of strategy and business development for the information management division where he sourced and integrated key acquisitions, including Cognos, FileNet and Ascential Software, creating the foundation for IBM’s business analytics strategy. What do you think you need to succeed in a strategy career today? I come to strategy from an operational background. I’ve spend time in engineering, sales, services, business unit management, strategy, mergers & acquisitions and post-merger integration at various companies including IBM, Avaya and HP. I find the operational experience and resulting insights very helpful in designing and implementing strategy. Having said this, formal management consulting training brings a certain discipline and methodology that is critical to framing and structuring the stages of the strategic process: determining where you are, where do you want to go, and how to get there. As

a result, I hire strategists who have a combination of consulting firm experience and operational experience, and I would advise someone looking to have a career in strategy to build both skillsets. How has strategy implementation changed in the past 5 years? I don’t know if this is a general trend, but from my experience, the strategy implementation work that strategy groups do seem to have expanded over the years. At HP, examples include diagnosing, developing and working with the business and functional teams to implement pricing policy changes, measure results and adjust implementation; tearing down hardware to advise the engineering teams on the right supply chain strategy and working with those teams and vendors to implement; and developing governance mechanisms for the company as a whole and working with IT to deploy and debug. Yes, at the top of our charter is developing the company strategy from which all these projects emanate, but that’s just the beginning. Operationalizing the strategy is a critical function of the strategy group. As you can imagine, one of the key elements of the HP turnaround that we are well on our way



Strategy at HP


implementing has a sizable process reengineering project as a core element, which is coordinated through the office of the Chief Strategy Officer, further aligning strategy implementation with strategy development. What unique experiences have you found from your work at Hewlett Packard? I love my job at HP. Last August, I had the opportunity to take a similar job at another very large IT company, and elected to join HP instead. The challenge of developing and implementing strategies for a company this rich in IP covering possibly the broadest spectrum of IT product and services in the industry is a once-in-a-life-time opportunity. We cover a wide spectrum of strategy at HP – from operational reengineering to product strategy, from consumer tablets to software defined networking for data centers, from optimizing one of the

world’s largest supply chains to designing the strategy for tomorrow’s most reliable and secure public cloud. But unlike many other technology companies, HP has technologies under development that can change computing in as fundamental a way as the transistor. So today’s immediate job is to enable one of the world’s largest turnarounds, while planning to fundamentally transform our world tomorrow. It’s a pretty awesome job. How has the increased use in internet usage changed the way that many companies approach their strategies? The internet, and technology in general, has provided new tools for strategists. I can gather data very fast today, whether directly through on-line surveys or indirectly from the growing number of publically available data aggregation services. But with all this data comes the challenge of finding the needle in the haystack. HP provides cloud, big data, mobility and security products and solutions for customers. Our big data products help customers solve this “needle in the haystack” problem, of finding actionable insights from large piles of data. At HP, we use our own big data products, such as Vertica an Autonomy, to analyze large quantities of data for our internal strategy projects. An example is supply chain optimization around memory forecasting. As you can imagine, HP buys a lot of memory for the tablets, PCs, printers, servers, storage and networking equipment that

Strategy at HP

we make and sell. Our old model of forecasting memory demand and prices had a certain accuracy, which was not 100% of course. But imagine, if you knew with 100% accuracy that memory prices would go up in the next three months and what your demand would be, you would probably buy a bunch of it now, and save a lot of money. Similarly, if you knew prices were going down and your current inventory would meet your forecasted demand, you would likely wait and not buy at today’s higher prices. There has always been a lot of data available to forecast things, and more in becoming available every day. However, recently, new data-structures and algorithms have been invented, such as HP Vertica’s columnar data-structure and related algorithms, to help us analyze

this data more effectively. By using Vertica on this supply chain strategy project, we were able to realize dramatic financial benefits for HP. So yes, the internet as a source of data, and related new technologies to analyze that data, have indeed changed the approaches we take. How do you manage to balance targeting and flexibility when implementing a new strategy? A strategy can be viewed as route on a map to get from where you are today to where you want to go. No map route provides all the information needed to get from point A to point B. There could be an unexpected accident on the road, and the driver may need to find an alternate route. In many cases, you can build that flexibility into the routing. You might have the option to send the driver on a road that is



Strategy at HP

the fastest, but if there is a problem, there are no alternatives. Or you could choose to send the driver on a slower route, but one that has several alternate paths. We make these trade-offs every day in many things we do. However, sometimes in business we forget to actively consider the “options value” of our strategic choices. Having started my career after leaving Stanford at two small companies, including one start-up, I tend to prefer the fast route with fewer alternate routes. However, this can require the driver at times to make the impossible

happen, such as finding a route around the accident that doesn’t seem to quite exist. Yet, this is the fundamental spirit of our industry, of entrepreneurialism, of Bill Hewlett and David Packard – to do the seemingly impossible. Of course, we do not build all our strategies with the same profile, and the portfolio contains a mix of these tradeoff points between speed and flexibility. What elements need to be concentrated on to make the most effective strategies? The strategy business is a people business. You need smart people. I could just stop here. However, I’m gathering that you are looking for more, and there is more. Strategy is fundamentally about knowing where you are (and many organizations commonly can’t get this very first step right), knowing where you want to go and then mapping the optimal path to get there. I will focus on the last piece here, because it is the most fun, at least for me. Mapping the optimal path is about data and process. I am a heavy user of deep data analytics. One of the small companies that I worked for after Stanford was a data analytics company, and I was the executive responsible for developing the algorithms, including statistical techniques, neural networks, fuzzy logic and genetic algorithms. At IBM, I led and in-

Strategy at HP

tegrated most of the acquisitions that became IBM’s “business analytics” business. At HP, I lead our shared services team of data scientists that provide analytic services to the company, and I am a large consumer of these analytic services for our corporate strategy projects. “Process” is about how you get things done, such how do you determine what new product or service to develop. So my approach to developing optimal strategies to get from point A to point B includes a significant amount of work upfront to gather good data and develop a solid understanding of the process. And then it’s back to people. You need smart people to come up with the techniques to gather the data, understand the processes and have the analytics and consultative skills to synthesize into an optimal strategy. Now, to make the good strategies effective, the strategy needs to be “impedance matched” to the organization execution capabilities.


This means that a great strategy that an organization cannot execute is not an effective strategy, nor is a weak strategy that the organization can execute well.

About Muhammad Ali Muhammad Ali is the Chief Strategy Officer at Hewlett Packard. The views expressed are not representative of Hewlett Packard.



Tribal Strategy

Going Tribal Anthony Willoughby Founder, Mammoth Hunters

Tribal Strategy

The time might be right for executives to stop looking for new and novel ideas and to start exploring the methodology of successful decision making, leadership development and capital protection upon which all civilizations have developed. As technology and information services become even more readily available and accessible today, the next great business innovation may very well come from the fundamentals of wealth management and leadership development that have been with us for thousands of years. Over the past decades, I have been working on a visualizing

process called territory mapping, obtained from 15,000 year old nomadic principles and wisdom that draw on responsibility, authority, contribution and an absolute clarity of your territory. This process encourages future-thinking organizations to tackle the most complex business situations like nomads trekking the globe: to understand, value and transcend all cultural, hierarchal and language barriers is to achieve a new clarity in today’s changing and challenging commercial landscapes. Laying the Groundwork One way to lay the groundwork


for territory mapping is to go out of the boardroom and break out of the comfort zone literally and figuratively, and embark on immersive, off-the-path experiences – some people call them adventures. The scene for a leadership workshop might be a 100-year old Chinese building constructed around a large internal shady courtyard. Or the backdrop of the Great Wall of China itself. Ian Thubron, TBWA Greater China Group President, describes takeaways from his experience: “Up on the Wall – there can be no more powerful metaphor for the barriers we face than the Great


Tribal Strategy

Wall of China… We came away bonded as a group of leaders, with some war stories, some legends, some common language, and more importantly a clear plan per office, of some of the things they need to do to help us be more TBWA; how to build the culture, how to energise staff, how to collaborate, how to make ourselves more attractive to clients and prospects. A huge array of ideas.” Global Business Nomads The Omnicom Group Inc. applies territory mapping techniques in developing the workforce and attracting “the brightest and most creative talent.” Creating a common corporate language is also a focus of Express Automation in Kenya as they use nomadic principles to get people to take more responsibility for the destiny of the company. Vacuum cleaners manufacturer Dyson used the concept of territory in strategizing the entry of their new air treatment fans to new market categories in North America, China and Australia. The board of Aviva Group in Turkey and the executives of Cigna Global Health also have embarked on semi-nomadic journeys to gain insight into new methods of growing their business and developing talent. Situating talent development in locations that disconnect employees from the modern way of life (no Internet access, dormitory accommodation, hot water and electricity optional) allows for intensive engagement within

the core group. Participants discover that it lets them focus on investing in the will power and morale of the team. If a company builds trust in employees, it leads to individual fulfillment which creates group motivation. At the same time, the motivation of the group inspires individuals to lead in ways that generate

more profitable, competitive and happier firms. Immersion in Indonesia Not all organizations choose such remote locations to inspire employees because they disconnect people from their business realities. One forward looking Japanese electronics firm is us-

Tribal Strategy

ing immersion as a strategy to connect key players into the realities of what they see as a burgeoning emerging market. This electronics giant aims to develop the mindset and skills of its staff to tie in project opportunities with infrastructure development in Indonesia. The company sent seven executives from Japan, to join two Indonesian researchers as part of their mindset and skills training. The mapping and discussion sessions took place in various settings: Borobudur, a 9th century Mahayana Buddhist Temple in Central Java; a climb to Mount Merapi, dubbed one of the most active and dangerous volcanoes on Earth; then back to the seminar rooms for intensive brainstorming. Herders, Warriors, Leaders The stunning locations are just a backdrop – such settings work because of the interaction with and learning from the culture and wisdom of the people inhabiting these landscapes. For many years I have been taking foreign executives to spend time with the Maasai people of East Africa to explore leadership and values. A famed tribe of herders and warriors, the Maassai stays true to a traditional semi-nomadic way of life that has allowed the tribe to farm deserts and scrublands for generations, and survive the most devastating droughts and natural disasters – a relevant model for a world facing the challenges of climate change, energy consumption and resource availability. For a week, executives walk, talk and

sit around camp fires with Maasai elders, warriors, women and children. These discussions provide the executives with fascinating insights into the nomadic way of life and how it has enabled the Maasai to thrive, adapt and prosper in changing and hostile environments. By examining Maasai core competencies, participants can design their framework for building a successful organization, which is anchored on clarifying and aligning responsibility, authority and accountability of their key stakeholders. Milia (Emmanuel) Mankura, a Maasai elder and colleague who co-facilitates programmes with me, highlights the core values of stability and knowing who you are – important traits for sustainability and



Tribal Strategy

adaptability. According to Mankura, “Nomadic lifestyle takes us into others’ territory. How we approach this is by sharing what we can do, and being respectful by taking care not to damage territory.� The practice of nomadic cattle herding and ways of thinking that Mankura demonstrates can be applied to modern business systems of decision making, people development, resource management and organizational structure. Using nomad principles as a framework, we sit down with the chief and the head of HR and work with the executive team to help employees understand, own and take responsibility for delivery of the corporate mission. The experience highlights a key Maassai principle: ensuring everything a person learns is useful and has a relevant application is to instill pride and confidence in their own identity and ensure their contribution to the community. Mapping is a useful technique for people to explore both their inner territories (who they are as business leaders) and their business terrain (their organizations, their markets, the economic landscape). Having a clear sense of how everything fits together grows the needed inspiration, passion and courage as we claim our space and share the world with others.

Anthony Willoughby is an explorer, entrepreneur and team builder. He is a Founding Partner of Mammoth Hunters. Note: Re-published with permission from The HR Agenda Magazine, published by The Japan HR Society (JHRS). Original article link:

David vs Goliath

War or Peace: Strategies for Effectively Competing Against the Giants Timothy S. McCausland Chief Strategy Officer Orange County Trust

41 41


David vs Goliath

As the Chief Strategy Officer for a small community bank operating in the suburbs of New York City, I am constantly reminded through advertising, event sponsorship and direct competition that my “rivals” include some of the largest financial institutions on earth. Eight out of the top ten banks in America operate within our bank’s footprint. The deposit base of the smallest bank on this list is 500 times that of our bank. That’s the competitive reality which must be considered in devising strategy for our small company. Yet, Orange County Trust is a very profitable bank, returning a respectable annual dividend to stockholders and maintaining capital levels that exceed, by multiples, the legally required minimums. Those top ten banks control about 90% of all US bank assets. The sheer scale of this concentration can be mind-numbing for smaller competitors. The other 10% is held by about 7,000 banking institutions of various sizes, with the vast majority clustered in a category generally described as “small.” In a system unique to the United States, community banks are the Mom & Pops of American finance and, for the most part, serve as the bankof-choice for a majority of America’s small businesses. So, in markets where community banks operate side-by-side with the money center banks, what are the strategies that can sustain superior performance results? Moreover, can these strategies be modified by other types of small businesses to compete against “giants?”

Too Big to Fail as Strategic Partner The Merriam-Webster online dictionary defines the word pragmatic as a way of “dealing with the problems that exist in a specific situation in a reasonable and logical way instead of depending on ideas and theories.” Thus, pragmatism leads to the strategy of working with big competitors in circumstances that results in an overall benefit to the customer. Since our bank might not be able to offer a commercial customer a loan of the size required for the customer’s factory expansion, for example, partnering with a larger bank to meet the needs of the customer provides a solution that is a win for all parties. It also helps develop our bank’s reputation as an active player in the market, all while sharing the risk with the larger partner. But, since all is fair in love, war and business, the threat of client poaching must be considered. In my experience, if the larger partner bank wants to do Deal No. 2, they will be respectful of the various relationships and, in most markets, word usually gets around that someone “chicken-hawked” a customer out of a participation deal. Not cool, but it can happen. Try to get non-compete language in any partner arrangement with large competitors, but don’t expect a warm response to the request. Typically, a large bank, or any national firm, will assert the standard line that “if we do this for you, we have to do it for everyone.” In dealing with large, money center banks, I have been reminded more than once that the reason and logic of pragmatism works both ways.

David vs Goliath

A correlative opportunity in relationships with large banks can include an off-load of business that is simply not profitable “enough” for the larger partner, although it might be square within the profitability target of our bank. While the larger bank might keep certain elements of the relationship, there can be occasions where our bank fills in the gaps, here and there. It might not be a line of business that can be accurately forecasted, but maintaining a working relationship with the larger bank has its own strategic benefits for our bank, sometimes beyond any particular customer enhancement. Our bank, like any business, has capital needs. When it becomes necessary, having a good relationship with a larger bank, though a competitor, puts us in a good position to obtain favorable terms for our own “house” financing. Finally, though not claiming to be exhaustive of the benefits in partnering with a competitor, large banks have well-trained employees and, occasionally, an individual may find some allure in working for a smaller outfit. This can be a delicate dance, of course, but many larger banks prefer to maintain a happy stable of alumni rather than an angry rabble of defectors. The Small Experience Over the years “customer service” has generally been averred as the principal differentiator between small and big companies. That is, small companies were thought to have a superior nimbleness that permits broader and longer hand holding with customers. Hand hold-

ing is still important, but only to the extent it can be justified by measurable effectiveness. Smaller firms tend to have limited resources and owners usually wear multiple hats, which can limit the amount of actual time spent with any one customer. Customer service, moreover, has become a component of a broader customer contact strategy designed to create an enhanced “experience” for the customer. Old time marketers might bemoan the MBA-speak of such things as an “enhanced customer experience” since keeping the customer happy has been a tenet of commerce since the lumberjack sold logs to Noah, but when a business provides a positive, impactful customer experience, the end result is usually a “sticky,” profitable customer. What is a positive customer experience? As noted, part of it is simply being attentive to customer needs – good customer service - but customers may not always be knowledgeable of a company’s capabilities which, unless addressed, could result in lost opportunities or worse; a customer departs to a competitor that deploys all its resources to snare the customer. Good customer service is an expected commodity in all markets, big and small. Small companies can no longer realistically differentiate themselves by “offering” a high level of customer service. Delivering a positive cus-



David vs Goliath

tomer experience has more to do with learning something new, being exposed to some practical application for one’s business or personal life and, generally, experiencing the unexpected. While small businesses might not be able to deliver superior customer service in today’s market, they are, nonetheless, better positioned to deliver the positive customer experience. Small businesses are not apt to have a “playbook” carved in stone like bigger businesses. Each customer can truly be treated as unique. Then, by decoding a customer’s commercial genome, a small business can discover the possibilities for delivering the unexpected. This should not be

viewed as a haphazard process and no business can expect to be successful with a hit-or-miss approach. For small businesses that compete directly with giants, the single most important strategy for success is an enthusiastic, unwavering, committed embrace of information technology. It wasn’t long ago that our bank self-identified as a “fast follower” with respect to information technology. That is, basic capital allocation priorities limited the amount of resources we could throw at IT such that we would “follow” the lead of bigger, resource-laden banks, assuming with follow-on investigations that the IT in question was fully

vetted before being deployed. IT “drafting,” if you will. For some time, the gap between leader and follower was, for the most part, imperceptible to the customer, but, as IT channels have increased (social media, mobile capability, cloud commuting) and IT costs have, on a relative basis, decreased, the idea of being a technology fast follower can hardly be justified as a prudent strategy. For small businesses, a sensible, but comprehensive assessment of available IT is a worthwhile investment – and strategy - that will likely unveil surprises. For our bank, a recent IT assessment revealed some underutilization of technology we already owned

David vs Goliath

(which is common) as well as available new applications and processes that might have been prohibitively expensive a few short years ago. The customer base of our bank is, like us, primarily made up of small businesses. Many of these businesses, again like us, compete against much larger competitors. The small businesses in this category that have taken advantage of the advancements and cost reductions in IT have been the businesses that effectively compete (and thrive) as against their much larger competitors. Assessment is vital, of course, but


what becomes even more critical to sustaining competitiveness for small businesses is the proper deployment of the adopted technology throughout the organization. It doesn’t help if the boss is the only one who knows “how it works.” Central to this concept is continuous training, update monitoring and testing of the IT you own. Underutilization is usually the result of a temporary pause, intended or not, in the use of any particular piece of information technology. It creeps in when people are promoted, transferred, fired, go on vacation or hide in their jobs.

There are examples of small businesses successfully competing against larger rivals in all corners of American business – alcohol production (craft beer, wine and spirits), energy (“Small Wind”), agriculture (“Farm to Fork”) and financial services (community banks), just to name a few. In each category, the calculus for success is built around a unique, impactful customer experience. Then, through the leveraging of relatively inexpensive technology with wide applicability, small businesses are successfully competing with the giants in measures here-

tofore unseen.

About The Author Tim McCausland is the Chief Strategy Officer at Orange County Trust. This article is written in personal capacity and all views expressed are the author’s.




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Chief Strategy Officer, Annual Review 2013  

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