Strategy in Three Minutes. Episode 18

1. Strategy and Value Exchange: Stop chasing competitive advantage. Start creating value uniqueness

Don’t drown in a blue ocean.

Blue oceans as zones where you can find untapped customers don’t exist.

You fulfill customer needs. Your rivals fulfill customer needs. The ones who do it better win.

Unmet needs are a scarce thing.

Good products solve customer problems. Great products change the way customers see their problems.

Disruptive products satisfy customer needs radically better than others.

Ask yourself:

[1] What basic customer needs do you want to address?

[2] How could customers meet these needs in the simplest, cheapest, and most convenient way?

[3] What can be eliminated from current solutions to make them radically simpler?

Forget for a moment what makes it impossible. Unleash your imagination.

You’ll think about it later.

2. Strategy-related terms: The simplicity of the method hides the complexity of the outcomes

Throwing ideas at the wall to see what sticks isn’t the best innovation strategy.

The era of Agile and “nimble strategies” has introduced a new mantra: fail fast and fail early.

Hypothesize, experiment, and sooner or later, you’ll strike gold.

Some companies took it too literally:

[1] “We may ignore customer opinion.”

[2] “We must innovate relentlessly and launch new products as fast as possible.”

But this is an expensive strategy. Clayton Christensen stated that 95% of new products fail. My experience confirms that.

You can stumble upon a great idea accidentally. A broken clock is right twice a day.

But starting with customers and their needs can save you precious resources.

[1] Identify customer needs

[2] Hypothesize

[3] Test your hypotheses fast

[4] Launch a product

Check out my book, Red and Yellow Strategies: Flip Your Strategic Thinking and Overcome Short-termism

3. Trend of the week: Why do we buy?

Influence engineering as a business strategy

Influence engineering is the practice of designing algorithms to influence digital user choices at scale.

The algorithms apply behavioral science techniques like “anchoring” to prompt specific online behaviors.

In 2022, Gartner included IE in its list of four emerging technologies expected to have a transformational impact on digital advertising.

Quote from Gartner:

“The abundance of data sources and machine learning capabilities enables new systems of influence and breakthroughs in areas such as emotion detection and language generation show clear potential to automate influential aspects of communication.”

According to Exploding Topics, it is a fast-growing trend today.

Though IE may look like a manipulative technique, businesses have been using such tools in retail, social media, and other industries for decades.

Are you going to use influence engineering for your business and strategy?

Svyatoslav Biryulin

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