Thursday, November 20, 2014

BOOK SPECIAL ......Fewer, Bigger, Bolder: From Mindless Expansion to Focused Growth

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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