What, Exactly, Is A Strategy?

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Tim Sheedy

 

I work with a lot of CIOs and heads of strategy in Australia and the Asia Pacific area – particularly concerning the development and updating of their IT strategies. As a part of our strategy document review service, I have seen plenty of approaches to IT strategies – from “on a single page” position statements through to hugely detailed documents that outline every project that will take place over the next 5-10 years.

While it can be argued that an IT strategy can’t really be strategic at all if it is just responding to business needs and requests (isn’t that just an IT plan?), the broader question of “what, exactly is a strategy?” is rarely touched upon.

I was fortunate to be invited to TCS’s recent Australian customer summit in Sydney. I was particularly attracted by the high caliber of the speakers and audience. One of the speakers whose presentation I found fascinating was Richard Rumelt, from UCLA Anderson – author of the book Good Strategy, Bad Strategy: The Difference and Why It Matters. His presentation focused on “what makes a good strategy, and how do you identify a bad one.” I really like his definition of what a strategy is:

A strategy is a coherent mix of policy and action designed to surmount a high-stakes challenge.

The basis of a good strategy is to diagnose the challenge, develop a guiding policy and create coherent policies and actions.

You know it’s a bad strategy when it:

-          Is all performance goals (i.e., we plan to increase our profit margin by 30% by 2015)

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How To Get Beyond Alignment

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Nigel Fenwick
 

It’s the perennial issue for many CIOs and often the No. 1 challenge for new CIOs: “How do I align IT with the business?” And while this is perhaps the most important challenge for IT groups struggling with a bad reputation across the business, it’s certainly not the most important challenge for IT groups with a solid track record of success. For these teams, the challenge is how to move beyond alignment.

In the report Beyond Alignment: BT Strategic Planning, I highlight how critical it is for IT to help formulate business strategy. The research suggests that how a firm develops and manages business strategy is pivotal to the question of how IT can move beyond alignment. Unfortunately, there are a number of challenges with this:

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A Letter To Meg Whitman From The Market

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Glenn O'Donnell

Dear Meg,

Now that you’ve settled into your latest position as the head of Hewlett-Packard, we wish to make a request of you. That request is, “Please take HP back to the greatness it once represented.” The culture once known as “The HP Way” has gone astray and the people have suffered as a result. Those people are of course the vast collection of incredible HP employees, but also its even vaster collection of customers. They (ahem, we) once believed in the venerable enterprise that Bill Hewlett and David Packard conceived and built through the latter half of the 20th century.

HP became renowned for its innovation and the quality of its products. While they tended to be pricey, we bought HP products because we knew they would perform well and perform long. We could count on HP to not only sell us technology, but to guide us in our journey to use this technology for the betterment of our own lives. We yearn for the old HP that inspired Steve Jobs to change the world – and he did!

We need not remind you of what transpired over the past decade or so, but we do have some suggestions for what you should address to restore the luster of HP’s golden age:

  • Commit to a mission. HP needs an audacious mission that articulates a purpose for every employee, from you and the HP board all the way down to the lowest levels. Borrow a page from IBM’s Smarter Planet mission. While it sometimes seems over the top, that’s the whole point. It is over the top and speaks to a bold mission to create a new world. Slowly but surely, IBM is making the planet smarter. Steve Jobs got Apple to convince us to Think Different, and we did. What is HP’s mission?
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Chief Customer Officer (CCO) Roundtable On CX Maturity

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Paul Hagen

“Customer experience (CX) maturity” was the topic of Forrester’s recent chief customer officer (CCO) roundtable meeting. Based on a recent report by Megan Burns called “Customer Experience Maturity Defined,” the customer experience leaders present took Forrester’s self-test of key CX practices, discussed their own company’s strengths and weaknesses, and shared successes and challenges they faced at their companies in interactive discussions throughout the day.

Here are some of the highlights from the discussion.

Governance and project investment. A significant portion of the discussion revolved around customer experience governance and getting funds for projects. There was clear agreement in the room on needing CX leaders at the top levels of management. For instance, the CCOs were saying:

  • “Customer experience loses at the corporate budgeting level. You need to be there or have an exec like the CFO fighting for you there.”
  • “Get on the decision-making body for investments and make sure you at least have veto power over projects.”
  • “When I’m making the business case for CX-related projects and pushing it up to the C-level, I always build ranges into the outcomes (e.g., reduce churn by 0.5% [worst case], 1% [middle case], and 2% [best case]; increase word of mouth by 2% [worst case], 5% [middle case], 10% [best case]). I get less argument about even the low number . . . people are overly optimistic.”
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Isn't It Time To Move Beyond Alignment?

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Nigel Fenwick

It's strange, but some things about the CIO role change very little from year to year -- and one of the most consistent priorities for CIOs has always been achieving better "alignment" with “the business.” But should this really be a top priority?

I can’t help it, I really dislike the term “alignment” -- it suggests to me that CIOs are trying to bring together two separate and distinct things: “the business” and “IT.” But the really successful CIOs already know this specific language sets everyone up to perceive IT as something apart from the business. And we all know that every business has technology woven intricately throughout -- to suggest technology is not a vital part of business success is simply wrong. So instead of talking about aligning IT with the rest of the business, we need to focus on ensuring the business is using technology to achieve defined goals and deliver business results.

Unfortunately, for many companies, IT appears to be in the software development business -- responding to “orders” from “internal customers” and busily delivering applications. CIOs need to ask: “what business are we in?” For most CIOs, the answer will undoubtedly NOT be the technology business. For these CIOs, the most precious skill IT can bring to the organization is business knowledge and process understanding coupled with technology know-how. By helping identify how technology can change the business dynamics and move the organization more efficiently toward its objectives, IT becomes the foundation for competitive advantage. In other words, IT needs to be in the business of helping shape business strategy.  

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ARM-Based Servers – Looming Tsunami Or Just A Ripple In The Industry Pond?

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Richard Fichera

From nothing more than an outlandish speculation, the prospects for a new entrant into the volume Linux and Windows server space have suddenly become much more concrete, culminating in an immense buzz at CES as numerous players, including NVIDIA and Microsoft, stoked the fires with innuendo, announcements, and demos.

Consumers of x86 servers are always on the lookout for faster, cheaper, and more power-efficient servers. In the event that they can’t get all three, the combination of cheaper and more energy-efficient seems to be attractive to a large enough chunk of the market to have motivated Intel, AMD, and all their system partners to develop low-power chips and servers designed for high density compute and web/cloud environments. Up until now the debate was Intel versus AMD, and low power meant a CPU with four cores and a power dissipation of 35 – 65 Watts.

The Promised Land

The performance trajectory of processors that were formerly purely mobile device processors, notably the ARM Cortex, has suddenly introduced a new potential option into the collective industry mindset. But is this even a reasonable proposition, and if so, what does it take for it to become a reality?

Our first item of business is to figure out whether or not it even makes sense to think about these CPUs as server processors. My quick take is yes, with some caveats. The latest ARM offering is the Cortex A9, with vendors offering dual core products at up to 1.2 GHz currently (the architecture claims scalability to four cores and 2 GHz). It draws approximately 2W, much less than any single core x86 CPU, and a multi-core version should be able to execute any reasonable web workload. Coupled with the promise of embedded GPUs, the notion of a server that consumes much less power than even the lowest power x86 begins to look attractive. But…

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Looking Forward To Forrester's Marketing & Strategy Forum In London Next Month

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Benjamin Ensor

Many of my colleagues in the eBusiness & Channel Strategy team at Forrester have been working extremely hard for the past few weeks, preparing for next week's Consumer Forum, which is taking place at the Hilton in Chicago on October 28th and 29th. Among my colleagues who are presenting their latest research are Brian Walker, Diane Clarkson and Zia Daniell Wigder, while Carrie Johnson is hosting the entire event. I'm sure it will be two days well spent.

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Join Forrester's New Community For Consumer Product Strategists!

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JP Gownder

I'd like to invite you to participate in an exciting new forum for discussion: our community for Consumer Product Strategy professionals!

The community is a place for product strategists to exchange ideas, opinions, and real-world solutions with each other. Forrester analysts will also be part of the community, helping facilitate the discussions and sharing their views.

Right now, we already have discussions going on the topics of product co-creation, creating video content for your product or brand, and the effects disruptive technologies like the iPad have on product strategies. These vibrant conversations are just getting started, but they're already pretty exciting discussions.

In general, here's what you’ll find

  • A simple platform on which you can pose your questions and get advice from peers who face the same business challenges.
  • Insight from our analysts, who weigh in frequently on the issues. 
  • Fresh perspective from peers, who share their real-world success stories and best practices.
  • Content on the latest technologies and trends affecting your business — from Forrester and other thought leaders

I encourage you to become part of the community:

  • Ask a question about a complex business problem.
  • Start a discussion on an emerging trend that’s having an impact on your work.
  • Contribute to an existing discussion thread from a community member.
  • Suggest topics for upcoming Forrester research reports.
  • Create a community profile.
  • Share your perspective with others.

The community is open to both Forrester clients AND to non-clients.  Why not visit today? 

http://community.forrester.com/community/cps

Unscrew Your Light Bulb!

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Nigel Fenwick

Unscrew Your LightbulbRollin Ford has one of the toughest CIO jobs on the planet. He leads a global IT team in one of the world’s largest companies by revenue and employees, a company that has earned a reputation for leadership in supply chain that has allowed it to dominate its markets. Yet Wal-Mart is constantly under pressure to maintain its leadership position. In the US, Target has become a fierce competitor, while in the UK, Tesco may have overtaken Wal-Mart in supply-chain leadership, with Tesco's move into the US watched closely by Wal-Mart.

Earlier this year, Ford sat on a CIO panel discussing IT’s role in innovation. His thoughts on innovation also touched on strategy and alignment. He suggested that innovation starts with the customer, then leads into a business strategy, and then it gets enabled by technology. However, he acknowledges, “there are very few secrets out there.” Ford suggests that the only competitive advantage over time is the speed at which your organization can implement and leverage innovative ideas: “Your organization has to embrace change and new technologies, and that becomes your model. It’s about getting from A to B and doing it quicker than everybody else.”

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What Do Business Strategy And Formula One Racing Have In Common?

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Nigel Fenwick

Many companies are at the height of the IT strategic-planning season. For some, this is an annual ritual tied to the budgeting process. For others, this is part of a long-range planning process, with an annual review to check on progress. Still other CIOs are approaching the development of an IT strategy as an integral part of an ever-evolving business strategy, with regular adjustments as the business units flex and respond to market changes. Whatever your perspective, it’s apparent that in the past executives outside of IT have given scant attention to the machinations of the IT strategy — but this is surely changing.

The operational performance of any business unit is now so heavily dependent upon the effective and efficient deployment of appropriate technology that planning a business strategy without also planning technology strategy is like planning to win Formula One without any telemetry. You can’t even get to the starting grid.

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