“Anyone, Anyone?” Who’s Thinking about Economics?

If you follow pop culture even a little bit, you recognize the reference in our title to Ben Stein’s portrayal of the boring economics teacher in Ferris Bueller’s Day Off.

Like the high school class staring vacantly as Stein’s character explains the Smoot-Hawley Tariff and the Laffer Curve*, many of our clients fail to thoroughly consider economics, assuming that it is just financial calculations that should be left to the accounting department.

The scene works because economics is generally considered to be boring. Maybe this is because it is taught poorly, or maybe it has something to do with the terrible track record of macro-economic predictions. In any case, while most businesspeople have taken at least some economics, they tend to leave it behind at university like those nearly forgotten courses in psychology and sociology. Worse yet, many senior managers adopt the language of accountants when describing their businesses, sidestepping a real economic understanding of how their market and their business actually work.

Unlocking the Value Chain

When we conduct our Grassroots Strategy workshops, a task on day one is to draw your value chain – the steps your offering goes through before reaching an end-user. In the business-to-business world, value chains can include different distributors, specifiers, installers and value-added resellers, all of whom can influence what gets bought by whom. We recommend looking at not just product flow, but also at how decisions and money flow up and down this chain.

RACI:  Love them or hate them, but used correctly, they can add value

After years of documenting key processes, re-writing job descriptions and automating org charts, many organizations still struggle to have clarity and alignment around roles, responsibilities, and authority.  This impacts business processes, project execution and day to day decisions resulting in frustration, inefficiency and sometimes poor decision-making.  We have seen this issue in action with our clients across many industries.

Several years ago, we were working with a major candy manufacturer. One of the key triggers for calling us in was the country president’s growing dissatisfaction with his organization’s inability to make decisions without bringing problems to him. One example that happened to be on his desk when we talked was a Halloween candy promotion with their biggest retail customer, Walmart. We eventually talked his team through the situation and discovered the core issues – three different managers each thought they should make the final decision, and they could cite their job descriptions to defend their position: The account manager for Walmart who was responsible for “maximizing revenue at his account,” the VP of Marketing who was responsible for “maintaining and improving our brand equity across the country” and the CFO who was responsible for “implementing our pricing strategy across channels and key customers.”

As one of them lamented to us, “lots of people can say ‘no,’ but no one is sure who can say ‘yes’”. This is one of the classic symptoms of unclear accountability and misaligned objectives. So, how do we solve this problem? 

One approach for clarifying responsibilities is the RACI Matrix.

The Adventures of 2023 Planning and Lessons From a Tumultuous 2022

By any measure, 2022 was a year of nearly unprecedented change and for many of us, one that we are not in a hurry to see repeated. While 2022 saw most of the covid-related restrictions lifted, experts are still debating the lessons and the long-term cost to things like education and small businesses as well as impacts on mental health. In addition, many businesses are still struggling with covid-related supply chain issues, including supply chain ‘whiplash’ in industries that saw big spikes in demand.

Reflecting on all this as we do our own planning for 2023 at Amphora, we are reminded of two key principles that we have stated before, read the blog below for a refresh on these principles!

Your Organization is Hungry for a Strategy

We recall a rather depressing conversation with the CEO of a medium-sized company several years ago. We were trying to stress the importance of articulating a strategic agenda when he effectively shut down the conversation by asserting, “we have a three-pronged strategy: operational efficiency, organic growth and acquisitions. People need to stop asking questions and… Continue reading Your Organization is Hungry for a Strategy

Rest in Peace, Vin Scully, There Will Never Be Another One Like You

Baseball broadcasting legend Vincent Edward ‘Vin’ Scully passed away last week at the age of 94. He was the voice of the Dodgers for an incredible 67 seasons, from 1950 to 2016. The awards and accolades that Scully received during his career are too numerous to mention. As one example, he received the Ford Frick Award for broadcasting excellence from the National Baseball Hall of Fame in 1982, and then went on to work for 34 more years!

Good Segmentation Schemes Often Start Out Sounding ‘Just Crazy Enough’

One of the benefits of having coached project teams through our needs-based segmentation process hundreds of times across dozens of industries is that we can spot patterns that are difficult to identify for even the seasoned industry practitioner who has typically developed a limited number of segmentation schemes, probably in just one or two industries.  One pattern that we often see is a natural clustering of customers based on size and complexity – with large customers demanding a high degree of customization for their unique requirements and small customers buying just one or two standard products serving their far simpler needs (or if they do have greater needs, we cannot afford to serve them because of their purchase volume).

While this type of segmentation works in addressing those two extremes, the problem is ‘the middle’ – the medium-size, medium complexity customers.  Leaving them all in one segment is often not a good option, as they can comprise 60 – 70 percent of your revenue.

What can The Rolling Stones teach us about Voice of the Customer?

In a probably slightly twisted sort of way I often think of the Rolling Stones song “You Can’t Always Get What You Want” when I think about Voice of the Customer or VOC.  It is almost a universal truth that if you ask customers what they want, they will respond with some form of “a better version of what we are buying from you (or your competitor) today at a lower price.”  If you just ask directly, this is almost certainly what customers will say they want, and many probably believe it.  But the goal of good VOC is to get beyond this superficial response. 

Don’t Wait for the Perfect Mission and Vision Statement to Create a Strategy

We often talk with companies who are waiting to work on their strategy because they are reworking their mission and vision statements.  There are key differences between mission, vision and strategy and it is essential they all fit together to drive impact.  Successful companies connect these three pieces together to ensure their business focus is clear, communicated and market driven.  But strategy is too important to be put on hold while you search for the perfect mission and vision.  

Our advice: Make sure you don’t put your strategy on hold while updating your vision and mission statements. 

Read the full blog for insights on the core components of your strategy that drive results to set you and your company up for success.

In search of …… silver bullet strategy

Too often, companies believe that the purpose of strategic planning is to find some magical ‘silver bullet’ that will solve all their problems and guarantee a path to profitable growth. A frustrating conversation with a client we had a few years ago comes to mind:

Amphora: What do you think of this draft strategy?
Client Executive: I don’t know, it feels like something is missing.
Amphora: Well, is there something wrong with our logic? This strategy should result in higher growth and higher profits.
Client Executive: No, but it’s based on information we already know, I was looking for a big idea.
Amphora: Yes, but this strategy is completely different than how you currently operate; it clarifies the underlying business trade-offs and forces different choices. Is there something you think we overlooked?
Client Executive: I just feel like there should be something more, like an outside-the-box idea.
Amphora: Is there any specific big idea that you think we should investigate?
Client Executive: I thought that was what you were going to come back with.

Expecting your strategic planning team to come up with the next big idea to guarantee profitable growth, is a bit like asking for a plan to lose weight without diet or exercise, or a plan to make money in the stock market without taking any risk. It would be nice if these strategies existed, but it is rarely the case.