strategy Archives - Page 2 of 2 - Organizational Physics by Lex Sisney

Lifecycle Strategy: How to Tell if You’re Doing it Right

In my previous post, I introduced the product, market, and execution lifecycles and why a successful strategy must align them. Now we’ll take a look at the four key indicators that will tell you if you’re on the right strategic path. The key indicators, which must be taken into account at each lifecycle stage, are Market Growth Rate, Competition, Pricing Pressure, and Net Cash Flow.

Let’s take a visual walk around the figure above and see how the key indicators work. First, notice that when you’re piloting your product for innovators in quadrant 1 you should be in negative cash flow. The total invested into the product to date should exceed the return. The market growth rate should be low because you’re still defining the problem and the solution for the market. Therefore, the competitors within your defined niche should be few both in number and capabilities. Consequently, the pricing pressure will be high because you haven’t defined the problem or the solution, so you have no ability to charge enough money for it at this stage.

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By Lex Sisney|2021-05-18T05:38:26-07:00October 19th, 2011|

Lifecycle Strategy: Product, Market, Execution Fit

Everything has a lifecycle. It is born, it grows, it ages, and it ultimately dies. It’s easy to spot a lifecycle in action everywhere you look. A person is born, grows, ages, and dies. So does a star, a tree, a bee, or a civilization. So does a company, a product, or a market. Everything has a lifecycle.

All lifecycles exist within a dynamic between system development and system stability. When something is born, it’s early in its development and it also has low stability. As it grows, both its development and stability increase until it matures. After that, its ability to develop diminishes over time while its stability keeps increasing over time. Finally, it becomes so stable that it ultimately dies and, at that moment, loses all stability too.

That’s the basics of all lifecycles. We can try to optimize the path or slow the effects of aging, but ultimately every system makes this progression. Of course, not all systems follow a bell curve like the picture above. Some might die a premature death. Others are a flash in the pan. A few live long and prosper. But from insects to stars and everything in between, we can say that everything comes into being, grows, matures, ages, and ultimately fades away. Such is life.

What do the principles of adaptation and lifecycles have to do with your business strategy? Everything. Just as a parent wouldn’t treat her child the same way if she’s three or thirty years old, you must […]

By Lex Sisney|2021-05-18T05:39:04-07:00October 18th, 2011|

Success Goes to the Best Adapted

It’s not survival of the fittest. Success goes to the best adapted.

Every potential business strategy has the same ultimate aim. This is true whether you are trying to sell your business, go IPO, enter a new market, raise venture capital, hire top-notch talent, fend off competitors, manage increasing regulations, win an industry award, or create the next hot startup. It doesn’t matter what the strategy is — the goal is always the same. This goal is also independent of time or context. It’s just as true in recessionary times as it is in boom times. It was true one million years ago and it will be true one million years from now. So what is this goal of strategy?

The ultimate goal of any strategy is to acquire new energy from the surrounding environment now and in the future.

The evidence for this comes from the most fundamental tenet of evolution: adaptation. Before we continue, let me clear something up about evolution. When most people think of evolution they think of Darwin. And when people think of Darwin, they usually recall the term “survival of the fittest.” However, Darwin himself never used that term. Well, that’s mostly true … Darwin only used the term late in his life to refute the notion that success goes to those most fit. Instead, what Darwin made clear is that survival (and prosperity for that matter) goes to those most adapted to their environment. If there’s good adaption or integration with the environment, then the species will flourish. But if the environment changes and the species can’t adapt, it will fail. That’s why you’re reading this – and not some brontosaurus.

Why is adaptation with the environment so important? Because that’s where new energy comes from. […]

By Lex|2021-05-18T05:40:15-07:00October 14th, 2011|

Exit the System – The First Step to Strategic Change

During one cold winter in Minnesota, I worked as a college intern for the mayor’s office in St. Paul. There are two things I still remember about the job. One, my twenty-year-old Toyota Corolla had a broken heater and so the commute from my apartment at the University of St. Thomas to downtown St. Paul felt like a prolonged, icy slap in the face.

The second thing I remember is how totally caught up in the political system everyone was at the mayor’s office – certainly the mayor, but also the assistants, wonks, and even the janitor. Politics at the mayor’s office — who’s doing what, who’s saying what, how the political winds are moving — was all encompassing.

For example, the state newspaper published an opinion piece about some mundane issue… I think it was the style of the new streetlights. If I hadn’t set foot in the mayor’s office, I would never have given this a moment’s thought. I’m sure the rest of the population didn’t care either. But in the mayor’s office, that article caused a flurry of activity, debate, and crisis management fit for a minor natural disaster. At least three, intense meetings were called to address the issue. I remember thinking, “What’s wrong with you all? Don’t you know that no one but you actually gives a shit?”

The same thing is true for any system – including your business, your family, and your life in general. When you’re standing inside the system, small things take on great significance. It’s only when you see them from outside the system that you can put them in the […]

By Lex Sisney|2021-05-18T05:40:53-07:00March 27th, 2011|

How to Keep Everyone on the Same Page – The Rule of Three

I met with the CEO of a fast-growing high tech company this week. This company (we’ll call it Company X) has grown from $100M to $400M over the past three years and plans to be a billion dollar business within the next three. We got together to discuss the challenges of keeping everyone in the company focused on the most important things. It’s a classic challenge. In fact, if you ask any leader of a fast-growing organization what are his or her three biggest challenges, you’ll hear “keeping everyone on the same page” as one of the top responses. How you help to do that is the subject of this article. And a powerful answer lies in the rule of three.

In the 4th century BC, Aristotle spoke about the rule of three – how the human mind tends to easily remember three things but forgets four or more. Every great communicator through the centuries has recognized and used the rule of three:

“Veni, Vidi, Vici” (I came, I saw, I conquered) – Julius Ceasar

“Friends, Romans, Countrymen” – William Shakespeare

“Life, liberty, happiness” – Thomas Jefferson

“Blood, sweat, and tears” – Winston Churchill

Notice too how common sayings are also often structured by the Rule of 3:

“Body, mind spirit”

“Tall, grande, venti”

“Learn your ABCs and 123s”

“Reduce, reuse, recycle”

“The 3 Rs – reading, writing, arithmetic”

Similarly, Company X has used the rule of three to help its staff focus on the most important things, as well as to recognize and stop work that isn’t focused on those things. Here’s how they did it.

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By Lex Sisney|2021-05-18T05:44:27-07:00February 21st, 2011|

Give Winning Presentations Everytime

You have a big presentation coming up. Perhaps you’re raising money for your new start-up or you’re competing to win a lucrative new contract. In any case, there’s a lot riding on the presentation. You want to make sure you’re at your best and that your message meets the needs and expectations of your audience.

I’ve given many presentations over the years. I’ve done presentations to raise over $50M in venture capital, to close new sales contracts, and even to teach meditation to kids. I think the hardest part of any presentation is the opening. If you can get that right, then the rest of your talk flows easily. But if you get the opening wrong, you’ll never fully recover. Here’s a simple technique that I’ve found very powerful to start your presentations off on the right foot and to tailor your message to any audience, be they VC sharks or indifferent kids. ☺

To start, you’ll need a partner or a coach. Get together in person or on the phone and brainstorm a list of ten to twenty questions that you think the audience wants answered in your presentation. Put yourself in their shoes. How do they view the world? What problems do they have? What situations and challenges are they currently facing? And, of course, what do they want to get out of your presentation?

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By Lex|2021-05-18T05:45:44-07:00December 27th, 2010|

Who’s On Your Team?

A Winning Model for Human Resource Management

“I would not give a fig for the simplicity this side of complexity, but I would give my life for the simplicity on the other side of complexity.”
– Oliver Wendell Holmes

The CEO stood at the podium and declared once again to the staff gathered for the annual all-company meeting: “Our people are our greatest asset.” And the audience sighed inwardly because they knew it was bullshit. A worn-out cliché that becomes more hypocritical with each use. They think, “If people are indeed our greatest asset, then why have training budgets been slashed again? And if I’m truly valued here, why am I working longer than ever but for less pay? And what about Frank in accounting? He’s not an asset – that jerk is a liability!” or some variation. Rarely do companies back up their “our people are #1” rhetoric with demonstrable, consistent actions.

Perhaps there’s no better way to mask a self-evident truth like “value your people because ultimately your value comes from them” than through over-worn clichés and empty rhetoric. It’s a shame because if you’re going to build a thriving organization, you’re not going to do it through strategy, systems, branding, sales, market share and efficient use of capital – you’re going to do it by building and re-building a winning team. Everything in your organization traces itself back to the people involved. It’s the people who define the strategy, design and implement the systems, conduct the branding, engage in sales, capture market share, and deploy capital. People are indeed your most important asset.

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By Lex|2021-05-18T05:46:19-07:00December 26th, 2010|