Original link: https://ljf.com/2023/04/18/1240/
What is a good company? We believe that a good company does not lie in its market value, nor in its profits or profit margins, but in how many customers it serves, what problems it solves for them, and what value it creates.
The core of this book is to analyze how to connect mission, vision, values, organization, talents, and performance systems with strategies through the formulation of strategies anchoring customer value, so as to form a growing strategy and execution system, so as to achieve a good business company goals.
Focus on strategy but not on people, even the best strategic planning may not necessarily bring good results, so things and people are like two sides of a coin, only the unity of people and people can “win” from strategy to execution.
A complete strategy should answer the following key questions:
· WHO: Who is the client?
· WHAT: What customer value can we provide to them? Are these customer values unique?
· HOW: In what way is customer value delivered, that is, what is the business model? How does the business model maintain or enhance the uniqueness of customer value?
In order to achieve strategic or annual planning, one of the important tasks is to adjust the organizational structure.
Alibaba’s concept of talent has repeatedly mentioned “spiritual strength”. My understanding of “spiritual strength” includes the following three parts:
Willpower: How to face the goal? Can you see it? Can you believe it?
Variable force: how to deal with change and uncertainty?
Resilience: How to deal with setbacks? When do you “give up and never give up”?
The establishment of “heart power” is integrated in Alibaba’s culture, values, and performance appraisal process, and the thinking model behind it is growth psychology. Growth psychology believes that everyone can change themselves and become a better self. This point of view has the same goal as the concept of “refresh” reform that Microsoft has promoted in recent years.
The key to growth is to keep replaying, and push yourself into a corner during the replaying process. Only by being honest with yourself can you have the courage to face the key issues that emerge, embark on the road to solutions, and continue to grow.
I remember that my team and I spent a long time contacting customers and users to find the differences between them. In the end, we found that what is more important than the answer is to reach a consensus with each other in the process and form a unified language system
01 Mission, vision, and values are the roots of strategy
Mission leads us to do the right thing, not to do the right thing. In addition to being clear enough, the vision must also be far enough and exciting enough. Values can ensure that the process of achieving results does not go astray.
In the “seven-piece set”, strategy is at the core. It is the key link between the past and the future. It must be connected with the mission and vision upwards, and it must be coordinated with goals, organizations, and KPIs downwards. And the value will support the implementation of the strategy.
Vision: what kind of company do you want to be
In addition to being clear enough, the vision must also be long-term and exciting enough.
Mission usually refers to what we want to provide to this society or the whole world.
The vision is about the enterprise itself, that is, what kind of enterprise we want to be, and what kind of means or appearance we want to achieve our mission.
The mission corresponds to the perspective of others, and the vision corresponds to one’s own perspective.
The company’s values are more like a “code of conduct”, which is the consistent value choice of all employees in the company when facing problems: there is no right or wrong, just a choice.
Mission, vision, and values, let us be “like-minded” and “harmonious”
3 keys to refining your mission
Key 1: Altruistic missions are more likely to be recognized
Key 2: The mission should be able to arouse the inner motivation of employees
Key 3: The mission should be vivid, easy to remember, and spread by word of mouth
02 Take customer value as the core of strategy and find out what to do
The minimalist framework of the strategy is the intersection of “want to do”, “can do” and “can do” – “should do”.
Professor Zeng Ming once defined strategy in this way: strategy is the effective allocation and combination of resources and capabilities to achieve certain long-term goals in a specific environment
Teacher Ma Yun often said: “Strategy is the same as life. You must think clearly about three questions: what do you want? What do you want? What do you give up?” “What” and “what do you want” may be relatively easy to answer. Think clearly about “what to give up” “But it was very difficult, and the process was full of contradictions and entanglements, because it was too anti-human.
“Achievable” is the law, the development trend of society, economy, technology, etc., and it corresponds to the external perspective. “Achievable” is also a judgment on opportunities: which opportunities are the most valuable, which are major trends, and which are opportunity costs.
How does “can do” predict the future? I think you have to think about the following questions first. If these questions are answered clearly, then the “doable” will be relatively clear.
· 10 years from now, what will our industry look like? Is the industry as a whole expanding or shrinking?
· Who will be the consumers (users) of this industry 10 years from now? Is the group getting bigger, or is it getting smaller? where are they now Will their needs change? What is the trend of change?
10 years from now, which players will be serving these users? What is the business form of these services? What are their strengths/weaknesses and profitability? You can list the business forms one by one.
After this, consider the distribution of the market: will the entire market be monopolized by a few players or will it be fragmented? What is the upstream and downstream status and relationship between them? Will the continuous development and changes of new technologies attract new players?
“Can do” requires us to be honest with ourselves
We often say that the triple state of life is “seeing oneself, seeing all beings, and seeing the world”. The most basic of these is to face ourselves calmly, neither arrogant nor inferior: What are we good at? What success experience? What are the lessons of failure? What are the unique resources? What abilities do others not have? In this process, we need to discover the most unique things about ourselves, that is, things that others do not have or are difficult to have.
Strategies must continue to grow in the process of “doing” and grow out by themselves. This requires the coordination of all resources, the focus and persistence of all members, and this is the most important part of the entire strategy.
4 soul questions about customer value
First, is it a real customer need?
Second, what is the scale of this demand?
Third, where is the uniqueness of this customer value?
Fourth, is this uniqueness unique to us?
A strategy should clearly answer three key questions.
· WHO: Who are our clients?
· WHAT: What customer value can we provide?
· HOW: How do we provide it?
If customer value is not anchored, then “customer first” is empty talk and cannot be implemented into actual operations. We often say “customers are right”, but there is another sentence behind it: “But you don’t have to meet the needs of customers.” Our choice is to create customer value, solve problems for customers, and do what we can do , rather than blindly meet all the needs of customers. Therefore, “customer first” is based on “customer value”. After clarifying customer value, you need to act selectively.
In terms of how to see it, I especially like the way the movie “Tenet” was conceived.
We have to look forward 10 years, determine our vision, and determine our position in the future pattern; think 3 to 5 years, make strategic choices, anchor customer value, and determine the direction of progress; Use the annual plan for the year to implement the strategy, find out the strategic focus, and the goals to be achieved in the near future. All three actions are necessary if we hope to go further.
Strategy is an important job of the CEO and the core team, not just the responsibility of the chief strategy officer.
In the complicated situation, we determined that the key to Taobao’s move to a larger scale is dataization, and the key to dataization is data interoperability. We came up with this breakthrough idea and reached a consensus. Visiting the ruins of the Qin Dynasty in Xi’an and listening to historical stories about the Qin Dynasty are the fields that facilitate these.
I usually ask the team that comes to class to discuss strategy to have at least the leadership of the CFO, CPO and technology R&D team
The second part of the long perspective of the strategy Alibaba from 0 to 1 to N, reshaping the new framework of strategic evolution
Strategy is constant persistence and focus – there is no good strategy, only suitable strategy, so strategy is unique. Being able to stand in the future and make trade-offs for today’s strategy is the key to the uniqueness of the strategy. The process of strategic evolution is also a process of deep insight into customers and the environment in which customers live, and the process of finding unique customer value.
03 Alibaba’s Strategy Evolution Methodology
Cases in strategy classes always try to explain the appearance of success, but rarely mention the reasons behind the strategic choices. Success is difficult to replicate, and the way of thinking in the process of strategic selection is the most worthy of reference for entrepreneurs.
We have several clear judgments about the future.
· The number of newly added Internet users will increase rapidly in the next few years, which will bring huge development opportunities for e-commerce.
· The C2C war has just begun, and whoever can get more new users will win in the end.
Today Ali people often say “Because we believe, we see.” I think the “belief” in the strategy comes from the future we see and our judgment on the future.
Regarding the question of “who is our seller”, we didn’t figure it out all at once, but gradually became clear while we were doing it.
When a positive question is deadlocked in the positive discussion, you can try to find the answer from the opposite direction – which direction must not work, which method must not be used, who must not be a customer… In this way The scope of the answer can be narrowed down slowly, and the discussion and exploration can be gradually focused. Knowing “what not to do” is also an answer, even a very important answer.
When looking for customer value, we need to pay attention to the “point of life and death”. I call the part of customer value that will lead to customer loss if it is not done well “dead point”, and the part of customer value that can keep customers and attract new customers if done well is called “dead point”. The dead point is on the defensive. If it is done well, there may not be development. The raw point is on the offensive. Only when it is done well will it bring future and development. Therefore, both the raw point and the dead point in customer value need to be paid attention to.
When I was in charge of operations, I would look at a category called “Others” every day-those products that I don’t know which category to put in will be placed here. This category is a natural growth place, and many new things emerge from “other”. For example, for a while, we found that someone uploaded products that “help you decorate your store” and products that “help you make models”. After careful research, we found that the needs of sellers can also be met on Taobao. Slowly, we gathered these related products for sellers, which became the prototype of Taobao’s current “seller service market”. I especially like this place on Taobao that can grow. This is what we usually call blank space: don’t plan everything perfectly, leave some space for customers and teams to play, and then we just need to quietly expect surprises Enough. No choice is perfect, we want this and we don’t have that, that has to be accepted.
The original purpose of Taobao was to protect Alibaba’s B2B business.
The final outcome of the industry is not the real final outcome, but the industrial structure after 5 to 10 years.
When we look at the “endgame”, we have to think about how we can do it when we are still on the court and the position is not bad.
It is very necessary to be able to project yourself into the future. When the world you see is completely different from others, the choices you make will naturally be very different.
From strategy to implementation, it is necessary to “see, do, and win”. Only “seeing” is not enough. In order to achieve “doing”, the most critical thing in strategy formulation is persistence and choice. The determination of persistence and choice comes from the judgment of the future and the understanding of self-ability.
In the process of making a choice, I have some principles to help me face the pain of choice:
· There are no more than three things, and you can only choose three things at most.
· Remove the most difficult, least important, and least capable ones first.
· Of the rest, keep the three most important.
Customer value needs to take into account the “point of life and death”. The “death point” is the place where we will die if we do not do well, and the “life point” is the place where we will live better and develop if we do it well. We can’t just focus on “life acupoints” and forget “death acupoints”, or keep “dead acupoints” without “life acupoints”.
At the beginning of Taobao’s establishment, the first critical strategic question we encountered was: Are Taobao’s customers buyers or sellers, and what is the relationship between the two? When the interests of buyers and sellers are inconsistent, how should the platform choose?
How to identify key strategic issues? My experience is to be honest with yourself and your team. Usually, these issues will continue to plague the team during the implementation process, and being able to put it on the table for discussion is half the battle. Maybe everyone can’t reach a consensus in a short period of time, and it is necessary to face the problems candidly and find a consensus in the process.
What are tactics? Tactics are specific, short-term actions taken in response to a specific situation. Tactics are generally more attractive, fun, pleasant to hear, and feel like a legendary story.
The stories of tactics sound very enjoyable and legendary, and we are often confused by the cleverness in tactics, always hoping to “eat the world with one new trick”. But the tactics are often closely related to the time at that time, and it is difficult to reproduce them later, so the tactics are the stories, just have fun after listening to them. Only strategy is the “way” and the key to success in the future.
04 Focus on annual planning, only by “doing it” can we grow
The key to “doing it” is annual planning.
In order to avoid such problems, we have summarized several points through continuous exploration and improvement:
· Keep looking at the present from the perspective of the future, and take each year’s strategic planning as a review of the current strategy and make constant adjustments.
· The task of strategic annual planning is to find key tasks within one year around the construction of customer value, and determine key campaigns and key indicators at the company-wide level.
· Cultivate the ability of strategic thinking in the process of strategic planning and daily strategy execution, so that customer value runs through the selection and implementation of strategies.
· In the process of strategic annual planning and execution, ensure the rational distribution of power on the two paths of life and death.
The lower the organizational level, the higher the frequency of review. Monthly or quarterly review can be considered. At the business level, it is usually recommended to conduct a review every quarter or every six months, while at the company level, half-yearly and annual reviews are possible.
Juhua is a place to attract users to take a look every day, and it has the function of drainage. This is its strategic positioning in Taobao as a whole.
When we think about whether a company is doing well or not, we should not only look at the numbers, but also whether the company has the motivation to grow in the future, that is, to make a judgment on the health of the business.
05 Cope with uncertainty and overcome the “pit” in strategy implementation
Disclosing strategy across the organization is a must when we want organizations to be able to continuously and rapidly respond to uncertain change.
Strategies need to set different goals at different levels of the organization : high-level leaders must spend enough time to form a consensus on strategy and goals through co-creation and other forms. strength; the middle management plays a connecting role in the implementation of the strategy, so it is necessary to have a clear understanding of the strategy and goals, and also understand why such goals are set; The synchronous sharing of goals mainly focuses on customers, customer value and goals. Through continuous question answering and communication, they are clearly and clearly described, and the goals should also be easy to remember and not too complicated.
“Understanding and doing are two different things. Only by doing and repeating to form muscle memory can we really learn.”
The transition from a manager to a coach is also very challenging. Not only do you have to control your own impulse to do it, take the time to explain the reasons behind the goal, the way of thinking, and the logic of judgment, but also provide opportunities for subordinates and the team to do it. In addition, it is necessary to control the urge to end in person, observe patiently and correct actions, do not rush to give answers, and ask more effective questions.
I think the success of DingTalk is to redefine customers and customer value.
If you want to get close to customers, you need to open the boundaries of the organization and let customers and partners deeply participate. Only in this way can you continuously adapt to changes and discover new customer values. This may become the normal state of the organization in the future.
OKR is more suitable for businesses that have high requirements for exploration and innovation, while KPI is suitable for businesses that are relatively focused on execution. We can choose flexibly according to the actual work situation. A company can consider using different tools for different businesses and different functional modules.
Whether it is KPI or OKR, the most critical point in the implementation process is the determination of the goal, that is, the alignment of the top, bottom, left, and right goals.
06 Strategic review, beyond the review itself
Because the strategy is essentially “suitable”, it can be done with you, but it may not be done if others take it.
The process of strategic growth is a cyclical process of continuous review, execution, and re-review. This process requires the cooperation of the team’s strategic capabilities: in-depth thinking about strategy and execution is the inner strength of continuous growth of strategy.
As far as strategy is concerned, the meaning of review goes beyond review itself.
First, review the strategy itself.
Second, review the stage of the strategy.
The first principle: have a neutral and objective perspective.
“Seeing yourself clearly” is one of the difficult problems in life, and it is the same for the team. Everyone and the team will have their own comfort zone, and also have the inertia of doing things, always believe that the path they choose is the best path. The task of replaying is to see “what you don’t see” and “know what you don’t know”, so you need a neutral third-party perspective to get an objective evaluation.
The second principle: keep an open mind and return to zero.
The third principle: try to see the whole picture.
Four types of key information input for strategic review
The first category: overall changes in the external environment
The second category: business data and final result data in the process of strategy execution
Category Three: The Customer and the Voice of the Customer
Category Four: Voices from the Frontlines
Type 1: Re-understanding of strategy
Through the review of “want to do”, “can do” and “can do”, discuss whether there is a need for fine-tuning or major adjustment on “should be done”.
Type 2: “Real Problems” in Strategy Implementation
First, has unique customer value been formed? Is uniqueness recognized by target customers?
Second, what is the biggest challenge currently facing implementing this strategy? from where? Is there a solution? Is there a deviation in the goals and execution process? Why do these deviations occur? Is it a matter of understanding the strategy, or a distortion of execution? Is the current solution path optimal in terms of path selection to the goal? Is there a better option?
The third type: Assess what stage the strategy is at and what is the next action plan
A very important task in strategy review is to identify which stage the strategy is in.
1. Identify whether the trial period is over and enter the development period
The so-called star appearance is “unique customer value”.
2. Identify whether the development period is over and enter the expansion period
The question that the business model has to answer is whether the product can generate “unique customer value” and whether this customer value will be accepted by customers.
Three stages of strategic review
The first stage is the design stage of review, and the design should clearly include the following contents:
· Why is it resuming now?
· What are the specific goals of the review?
· Who are the participants in the review (key persons)?
· What content (key information) needs to be input for review, and in what form?
· What is the time, place, and process of the review?
The second stage is the implementation process of the review, which generally includes 5 steps.
Step 1, Opening
Step 2, content input
Step 3, discuss
Step 4, Action Plan
Step 5, summarize at the end.
The third stage is the precipitation and action stage, which is also the stage of implementing the conclusions of the strategic review. Four actions need to be completed.
Action 1, archive
Action 2, communication
Action 3, execute
Action 4, conduct regular evaluation of the action plan.
The third part is the unity of personnel and personnel of strategy
It is a process of “integration of personnel and personnel” from the formulation of strategy to the implementation of strategy. It can be said that “people” and “things” are the “side A” and “side B” of the strategy coin.
When we talk about whether we are willing or not, we often mention a sentence: because we believe, we see. Many entrepreneurs will also use this sentence to ask the team and employees to see it with him. In fact, the point of this sentence is how to believe, not to see together. Seeing is a result of believing.
The implementation of the strategy is a process that requires persistence and focus, and it also requires the power of belief. On the cornerstone of belief, there is an effective method, which is to “accumulate small victories into big victories”.
Only ideals are illusory, and only reality has no sense of accomplishment. Therefore, it is necessary to establish a sense of mission and face reality, and give everyone monetary incentives. In addition, when talking about the sense of mission, don’t try to test human nature.
07 Organizational support, from strategy to execution “chariot”
Doing strategy is not the job of the chief strategy officer. The first person responsible for strategy is the CEO, and the first responsible team is the entire core team.
To form a team, the most important thing is to be able to see each other, understand each other, and establish a common goal.
We are always envious of other people’s company’s good generals, but the “dream team” is never there on the first day, nor can it be bought. The dream team is formed by interweaving each other’s lives one by one.
Based on the strategy execution discussion, organizational assurance can be carried out around three points.
· What organizational capabilities are needed to realize this strategy? How many people are needed? What abilities are they?
· What is the management model for implementing this strategy? The management mode can be considered in terms of organizational structure, communication mode, and assessment methods.
· What is the corporate culture for implementing this strategy?
Earth-shaking innovations can be encountered but not sought after. What can be done in a down-to-earth manner is “improvement”. In the process of continuous improvement, there may be great innovations.
“Change your behavior first, then your thinking.”
“Change behavior first, then change thinking”, which is contrary to our common sense. Usually everyone thinks that “change the thinking first, and then change the behavior”. Many things are easier said than done. If we don’t force ourselves to do it, the change of thinking will only be a temporary change. Only by doing it constantly and experiencing the changes brought about by changing behavior can we internalize the change of thinking into a kind of ability.
08 Talent concept based on the future: There is no distinction between good and bad, only suitable and unsuitable
Due to different goals, talents and talents are also different. Talents in aspect A may not be talents in aspect B.
So how do we judge talent? When considering talents, we must start from strategy.
· What are the key departments and roles to realize this strategy? What kind of people are needed for these key positions? What capabilities should they have?
· Do we already have these people? If not, what strategy should we use to acquire these people? Is it internal or external? Where would they be if outsourced?
· Are these key positions still key positions in the future? What kind of people are needed for key positions in the future? How to get?
· In terms of key talent, who do we keep? What ability to develop? What changed?
Based on the strategy and the talent concept derived from it, under the same performance conditions, we prefer to use options to motivate employees with medium and long-term development value, and use bonus incentives to employees with short-term business development value.
Business executives are the first party responsible for talent strategy
Developing a talent strategy can be followed in 3 steps.
The first step is to draw a talent map
The second step is to determine the concept of talents
The third step is to implement the talent strategy
Be soft, be quick
09 Culture is the soil, and values are the background of culture
Regardless of whether there are clear values or whether they are being practiced, the ultimate manifestation of a company’s culture is the three dimensions of “rewarding, promoting, and dismissing”.
Values (value choices) can ensure that the process and means of achieving goals are correct and long-term. Companies without consensus value choices, and companies whose value choices are not implemented, are easily constrained by short-term income and unable to achieve long-term development.
Epilogue accept shaking, reject mediocrity
The matter of shooting has finally become difficult and very simple. Only by using intuition, feeling, and accepting shaking can you experience the unity of heart, eyes, and hands, and only then can you reach the 10th ring. And when you pursue the 10th ring too much, it is often impossible to hit the 10th ring.
The same is true in the process of strategy making and strategy execution. We must first accept the shaking, accept that the strategy must not be perfect and precise, and then constantly correct the direction and path in the process of progress, and gradually approach the goal on the basis of the unity of personnel and personnel.
There is a mission in the heart, the future in the eyes, and the direction in the hands. Only by seeking the unity of the heart, eyes, and hands in the shaking can we hit the bull’s-eye.
Excellence is not a steady state, either towards excellence or mediocrity.
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