The Opportunity Landscape
In Fewer,
Bigger, Bolder: From Mindless Expansion to Focused Growth,
Sanjay Khosla, former president of Kraft Foods’ developing markets
unit, and Mohanbir Sawhney, director of the Center for Research in
Technology and Innovation at the Kellogg School of Management,
propose a framework for sustainable growth. Called Focus7, it
consists of seven steps that begin with searching for growth and end
with measuring and communicating progress.
Developing
strategy (or picking your bets, as the authors call it) is the second
step of Focus7, and it entails navigating the “opportunity
landscape.” This methodology has four dimensions, each with two
lenses: (1) what you offer, with brand and product lenses; (2) who
you serve, with customer and partner lenses; (3) where you go to
market, with channel and market lenses; and (4) how you operate, with
monetization and process lenses.
Along
the way, the authors provide apt examples, making this step
refreshingly tangible. For instance, regarding the customer lens,
Khosla and Sawhney aver that Enterprise Rent-A-Car’s number one
position (by revenue) in its category is based on the company’s
unique and relentless emphasis since 1957 on addressing a specific
consumer problem—the need for a replacement car. While Enterprise’s
competitors bloodied each other at the airports, Enterprise opened
more than 5,000 outlets in neighborhoods across the U.S. to furnish
autos to local people whose vehicles were being repaired or who
didn’t own a car, but needed one for a special occasion.
Although
entertaining and informative, this section, like much of the
principal argument in the book, avoids a coherent discussion of
strategy itself. Presumably, a good strategy is the product of a
“focused” set of bets, whereas a bad strategy results from a
“mindless” one. It’s hard to argue with this view of the
difference between good and bad strategies, chiefly because it is a
tautology. This weakness aside, the notion of an opportunity
landscape does provide the basis for a higher-level strategy debate
in which all companies must engage to succeed. And the authors
present a useful series of ideas to explore in assessing your
company’s performance and prospects.
What
most intrigued me about Fewer,
Bigger, Bolder—and
what makes it well worth adding to your reading list—are Khosla’s
in-depth anecdotes about how he altered the fortunes of the Kraft
units he led. In those sections, the book takes on a fly-on-the-wall
quality, providing a valuable insider and, yes, strategic perspective
of an executive’s thought processes as he effectively manages a
turnaround.
When
Khosla joined Kraft in 2007, the company had expanded wildly into
international markets, but its earnings were coming at a premium. Its
sales campaigns lacked discipline, and there was no economic
justification for the vast resources that Kraft expended on these
efforts. To fix this, Khosla implemented a program known as 5-10-10,
under which Kraft’s dozens of product categories, 100-plus brands,
and 60-country portfolio were pared down to five strong categories,
10 brands, and 10 markets that the company would focus on and
support. Within six years, Khosla’s division tripled its revenue to
$16 billion, and profitability grew by 50 percent.
The
5-10-10 buckets were populated through a series of global workshops
that represented a substantial shift away from Kraft’s centralized
top-down structure—an approach that executive readers hoping to
simplify decision making in large organizations should consider
emulating. Kraft regional managers, as well as vendors, consultants,
investment bankers, and consumers, attended the workshops. Although
the agendas were strict, the participants were encouraged to speak
freely, share evidence and anecdotes to back up their points of view,
and propose practical solutions. Perhaps most important, and useful
from a management perspective, Khosla demanded that the top brass in
these meetings, including himself, be muted. “The point is to let
the discussion roam without regard to past practices or current
favorite initiatives,” the authors say. “Even the body language
of the ranking executive can tilt the proceedings and inhibit the
openness that’s necessary for best results.”
Khosla’s
decentralized approach to the workshops opened up the possibility of
more autonomy at the local level throughout Kraft, and regional
managers were given greater latitude in decision making and enjoyed
greater influence in the organization. This eventually led to the
most notable marketing success in Kraft’s recent history. During
the 2013 Super Bowl at the New Orleans Superdome, a power outage
occurred just after the second half started, and the game was stopped
for more than a half hour. Almost as soon as the blackout hit,
Kraft’s Oreo marketing team came up with a creative tweet to play
off the cookie’s well-known “Twist, Lick, Dunk” campaign:
“Power out? No problem. You can still dunk in the dark.”
That
short, free ad was retweeted 10,000 times in the next hour, and the
publicity that Kraft received for it over the next few days was
priceless. The tweet, though, was possible only because the company’s
leadership equation had been altered. “The authority to approve the
tweet had been pushed down far enough that the decision could be made
almost instantaneously,” the authors write.
The
description of the international expansion campaign that Khosla put
in place is a guide to creative executive decision making that
C-suite readers can emulate to their advantage. And, although the
definition of strategy is somewhat nebulous in Fewer,
Bigger, Bolder,
Khosla’s success at Kraft nods at the good things that can happen
when strategy and tactics align.
http://www.strategy-business.com/article/00287?pg=all
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