Strategy: The What and the How of Technology Strategy

compass-imageImagine I tell you that I want to go to San Francisco from LA. You then begin plans to determine the best way to travel to SF by either car, plane, or boat. After careful analysis, you select flight as the most efficient way to get us to SF and begin working on travel plans and booking flights. About midway through your work to get us to SF, I come back and say actually, Toronto is a much better destination. How would you feel if the tickets had been purchased and lodging booked? This is what many clients do to their teams by believing that the project objectives are fluid and can be a “living document” to be changed anytime. This the “what” part of tech strategy (what are we doing, what is the destination etc.) that I believe is critical to defining before you get to the “how” (how are we building this, how are we getting to the destination, etc.) of any project.

Let’s be honest, defining the “what” part of tech strategy is hard work and is commonly avoided or giving very minimal attention from managers and executives before they embark on that high-profile digital initiative. It is what causes many tech teams, designers, and PM’s to pull out their hair as they attempt to lock down the objective of a project while being simultaneously pushed to “just build the damn thing and get it launched.”

So how do we avoid this headache and get stakeholders to agree on objectives that provide the team with a compass to find the project’s “True North?” My advice is to be honest with managers, executives, and clients. Let them know that by “evolving” goals, they are forcing the team to constantly find a moving target. This typically results in increased costs, delayed or canceled projects, and a huge hit to team morale. By defining the objectives upfront, the success metrics can be defined and measured upfront. If the metrics dictate a pivot, you have the data to back up a change in strategy. This is why it is critical to define the “what” in your tech or digital strategy.

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Daniel is a digital consultant specializing in IT advisory on technology strategy, investment, and implementation. He helps companies solve complex and strategic problems across multiple industries and domains. His drive to find solutions for clients and attain personal growth for himself is what keeps him at the forefront of innovation and helps him guide teams and organizations to cultivate amazing products and services. He can be found on Twitter at @dewilliams.

How to Differentiate You Product Using a Competitive Matrix

beat the competition

Every business that provides a product or service needs to differentiate themselves from their competitors or alternative solutions. For purposes of this article, I don’t really make a distinction between competitors and alternatives since both will keep customers from using your product or service. For example, Amazon Books technically competes with Barnes and Noble (B&N), but an alternative to Amazon and B&N would be your local library where books are free.

 

When developing your differentiation strategy, you should look at the problems that your target customers have and how your product or service solves those problems. List each problem in a table or spreadsheet down the first column as in Table 1:

Competitive Matrix
Table 1: Competitive Matrix

When scoring your product, try to be as objective as possible, not overvaluing your product and undervaluing competitive or alternative products that solve your customers’ problems. Also, prior to putting together this matrix, your should already have a firm grasp of the problem(s) you are solving and who are your target customers.

The next step in this process is to do a quick calculation comparing your product against the average score of your competition’s ability to solve your customers’ problems. The process involves pretty simple math:

  • Take the average of your competitors/alternatives for each problem line (ex for line 1: (1.00+1.00+3.00+2.00+3.00)/5 = 2.00)
  • Subtract the average for each line from your product’s score for that line (ex: for line 1: 4 – 2.00 = 2.00)
  • Take the average of the difference for each line.

Table 2 below shows how this fictional “Fancy Problem Solver” stacks up against the competition with an overall score of 1.53.

Competitive Score
Table 2: Competitive Score

In my experience, anything less that a 1.5 has some serious competitive problems. Also, anytime you have this many competitors and alternatives, you should consider solving a different problem or creating a new category that doesn’t exist. This does not mean that you are making up a BS category to avoid the hard work of competing. What it means is that you create a new category in the minds of customers so that they no longer associate your product or the problems you solve with any other alternatives.

I have personally helped may clients define their product, competitive landscape, and how to position their solution in the minds of their customers. For example, I have a client that provides a luxury, high-end service. They were have trouble defining the services and attracting customers on a recurring basis. In looking at what they offered, I first determined that they were defining their services in the sports therapy category, when they should be defined in the luxury therapy category. Once we had a new category definition, we then reached out to multiple luxury car dealerships in the area (this is a very posh, well-to-do community in Southern CA) to offer memberships to the dealerships’ customers. All they need to do is show up with their key fob and they were treated like royalty. This has translated into an increase in foot traffic and most importantly, an increase in sales and profit margins.

If you would like to discuss how I can help with your product or service strategy, feel free to contact me via the comments or LinkedIn.

Life Strategy: Mental Models

I discovered the wisdom of Charlie Munger a few years ago and have been obsessed with his concept of Mental Models for solving both complex and everyday problems. I’ve been slowly working through mastery of each mental model recently as a refresher and to tackle some new challenges in life and business. I highly recommend going through the list and rank you knowledge of each from 0-5 (0 being no knowledge and 5 being mastery of the mental model). While I wouldn’t call myself a master of any of them yet, I have self-ranked 3-4 on a few of them that I find most useful and use frequently. Hope you enjoy!

Mental Models