Amazon Buying Whole Foods: An Amazon Strategy Lesson 21 Years in the Making

Categories StrategiesPosted on

In recent days, cable news business shows, print newspapers, and social media outlets have been packed with extensive commentary about Amazon strategy to pay $13+ billion to acquire Whole Foods. Speculation runs the gambit about the short- and long-term impact of Amazon’s latest move.

Today’s Wall Street Journal (WSJ) says it well:

“The impact of the e-commerce giant’s Whole Foods deal on online grocery services is still unclear, but one thing is certain: Competition is heating up” – WSJ

The article goes on to explain that Amazon’s entrance in the space is adding to the frenzy among grocery stores for a growing share of home delivery service market.

 Strategy Lesson 21 Years in the Making

Two seemingly unrelated events happened in 1996. I invite you to join me as I draw from both events, take the liberty to make a few connections, and challenge your approach to strategy development.

Event #1: July 5, 1996 – The Dolly the Sheep Strategy

Dolly the Sheep was born at the Roslin Institute, part of the University of Edinburgh in Scotland. She was the first-ever cloned mammal – the product of a cytoplasmic donor, a nuclear donor, and a surrogate ewe.

At the time of her birth, the story dominated the media. It was called everything from an amazing scientific feat to a moral issue that would unwind the fabric of humanity. Dolly’s saga led to much public debate and many laws to curtail human cloning.

Dolly lived only 6 years. That’s considerably less than the typical 10-12 year lifespan, but her impact was significant. Today, she is on display at the National Museums Scotland.

As interesting as the story of Dolly the Sheep is, this article is not about cloning mammals.

However, it is about cloning.

This leads us to the second event…

Event #2: November-December 1996 – Enter the Amazon Strategy

The November-December 1996 Harvard Business Review contains Michael Porter’s seminal piece What is Strategy? Among other things, Porter, who is a faculty member at the Harvard Business School and prolific writer, explains that many leaders confuse strategic positioning with operational effectiveness.

What’s the difference?

In short, operational effectiveness focuses on performing the same activities as your competitors; strategic positioning means that you are making trade-offs, choosing not to do some things, and taking on different activities.

Combining these two 1996 events…

If you will allow me a few liberties, I’d like to provide an example to illustrate the connection. (Is it perfect? No, but it will suffice for our purposes.)

In the not so distant past, there were many more brick and mortar bookstores. It is likely that many bookstore chain leaders focused on reducing costs, growing market share, acquiring better locations, increasing year-over-year revenue, or a myriad of other goals.

True, these goals were good. The more successful chains raced to the top of the heap. However, over time, the efficiencies achieved by one company were likely replicated by its competitors.

The reality is that they weren’t thinking strategically. They were merely improving on the practices of others in the industry.

They were employing a Dolly the Sheep Strategy.

No, they weren’t trying to clone one another. Nonetheless, as time passed, the differences among them became less and less. One company would improve a process and eventually the rest of the pack would catch-up. In many ways, they were clones of one another.

As a result, the race to the top turned into a sprint to the bottom. This required organizations to compete on price, which is not an easily sustained, long-term plan for most organizations.

Then, along came Amazon and the Amazon Strategy.

Amazon was competing in the same industry, but doing very different activities. Jeff Bezos was thinking strategically. The Amazon Strategy was to be a wolf, and many companies paid the price for their Dolly the Sheep Strategy.

What about you and your organization?

Here are a few questions for you to consider about your strategy:

  • Are you employing a Dolly the Sheep Strategy or an Amazon Strategy? Or are you behaving like a wolf?
  • Is your current strategic direction mostly focused on operational effectiveness?
  • If so, how sustainable is that approach? How long will it be before your operational improvements become the industry’s status quo?
  • What might you do today to begin thinking more strategically?
  • What new activities might your organization take on if you were to employee an Amazon strategy?
  • What trade-offs are you willing to make?

WSJ Reports YOU Will Be Less Successful, Here’s 4 Entrepreneurial Lessons to Prove Them Wrong

Categories Inspiration, Strategies, Your CareerPosted on

Earlier this year, The Wall Street Journal (WSJ) proclaimed that Barely Half of 30-Year-Olds Earn More Than Their Parents. The piece, written by Senior Editor Bob Davis, explains that middle class wage stagnation makes it near impossible to reverse this trend. Perhaps these four entrepreneurial lessons will prove them wrong.

Barely half of 30-year-olds earn more than their parents did at a similar age, a research team found, an enormous decline from the early 1970s when the incomes of nearly all offspring outpaced their parents. Even rapid economic growth won’t do much to reverse the trend. – WSJ

There is little doubt that many will read the WSJ article and leave feeling depressed, anxious, or fearful. My hope is that this post will encourage you to think otherwise.

Wages may have stagnated, but this doesn’t mean that opportunities aren’t all around us.

I teach Corporate Strategy and Marketing classes at Vanderbilt University. Every semester, I invite entrepreneurs into the classroom to share their stories with my students, partner with student teams to address business challenges, and receive recommendations about how to improve their businesses, drive growth, and better position themselves in the marketplace.

Using these experiences as a backdrop, coupled with my own business endeavors, I offer 4 entrepreneurial lessons to encourage you to start a business tonight.


1: You know of a problem that should be solved

Last spring, Dr. Christian Hahn served as my students’ client. Dr. Hahn is a highly successful and sought after cosmetic dentist. His professional pedigree is phenomenal and his practice (Ideal Dentistry in Louisville, KY) is a tremendous success.

Despite his career path and his growing practice, Dr. Hahn’s desire to work with Vandy students had nothing to do with dentistry. It had everything to do with a problem that needed to be solved.

An avid inventor and father of three, Dr. Hahn noticed that his children, as well as nearly every child he met, had difficulty putting on swimming goggles. Inevitably, hair would get stuck, water would leak into eyes, and parents and children would become frustrated.

Most parents had simply resigned themselves to the fact that the goggle problem was part of the swimming experience. Not Dr. Hahn – he designed a new pair of goggles that children could easily put on themselves. He named his product Frogglez and offered it to the world.

Questions for you to consider:

  • What problems do you see that need to be solved?
  • What do you hear people complaining about or compensating for with temporary fixes?
  • Is there something that annoys you about how things currently function (or fail to function)?


2: You are uniquely positioned to solve the problem

Over the last several months, my students have been working with Jen Auerbach and Adriel Danae. These ladies (pictured above and below) are the founders of the Clary Collection.

As two new mothers, Clary Collection’s co-founders were struggling to find the best way to care for their children and themselves.

Here’s how they explain the challenge and their willingness to close the gap, “Our transition into motherhood sparked many changes in us, one of which was a tuning in to our bodies as they started to function as givers of life and home to our children. This brought new awareness to our need for clean food, products and environments…Recognizing that the skin is the body’s largest organ and that it absorbs a great deal of environmental toxins, we sought out truly clean moisturizers and balms, as they were the most essential items in our skincare routines. However, we continually came up short….With curiosity and determination, we began to seek alternatives that brought us back to a time when our ancestors carried practical knowledge and crafted useful connections between what they cultivated and gathered from the earth and how they healed. We read books and began to ask questions and share ideas with friends, neighbors, midwives, grandmothers and teachers. And we started experimenting.”

Their efforts led to the creation of the Clary Collection. Recently featured in Vogue, the collection offers a balm, bath-and-body oil, nipple balm, and a stretch-mark oil. These items, made for moms – by moms, are beautiful packaged in 1930s style containers.

Clary’s founders were uniquely positioned to solve the ailments of new mothers, because they were dealing with the challenges themselves and were passionate about making a difference.

Questions for you to consider:

  • What problems are you uniquely positioned to solve?
  • What are you willing to devote yourself to? What are you passionate about?
  • If you could spend the next 10 years fixing an issue, what would it be?
  • What is your conscious telling you?


3: People will pay for the solution you provide

In 2001, my wife and I started a consulting company. Some 12 years later, we sold it. The business exceeded our expectations. Our revenue experienced double-digit growth every year, fostered an amazing culture filled with talented and passionate employees, established offices in five states, and served a wonderful portfolio of clients.

That experience taught me that people will pay for the solutions you provide as long as you solve a problem that needs to be solved.

I recently set out to prove this to my son. A first-year college student, he loves to travel, is an avid photographer, and enjoys the outdoors.

This past March, I took him and seven of his friends on a 10-day Appalachian Trail hike. It was a great experience – a true adventure. (“What I Learned When 7 Millenials Told Me to Take a Hike“)

When we returned, my son and I made signs for each boy. Using a piece of basswood (which is known for retaining its bark after the tree is cut down), we applied a trail marker just like the one we saw throughout our hike, created a process to seal the bark, and applied a hook on back to hang the object. The boys loved them.

A couple of weeks ago, my son and I launched a small Etsy shop (YearnMore) to offer these signs to others. Our thoughts, We enjoy the memories that these markers conjure up in our minds, perhaps others would like to remember past journeys too. Our products are designed to encourage others to Yearn More for Adventure.

We were right. Within a couple of days, our first order arrived, followed by another, and another. My son is now working to expand his offerings and will be adding photos he has taken on trips from Iceland to Singapore.

Questions for you to consider:

  • Do you believe that people will pay for a product or service you have to offer?
  • What is stopping you from finding out?
  • Why don’t you invest a weekend to answering these questions?


4: The internet provides the ability to bring #2 and #3 together

We live in a truly amazing time. Unlike any generation before us, we have the ability to source products from halfway around the world, advertise them on every continent, and ship them anywhere – all without leaving our home.

Companies like Shopify, Amazon, Google, Etsy, Ebay, and a wide-range of others are working together to help you bring what you have to offer to the world. Don’t let their efforts go underused.

  • What do you know about eCommerce and how you can bring your products or services to the world?
  • Are you willing to invest two hours this evening or over the next weekend to learn about one or two of the existing platforms?

Final thought…

If you have a desire to beat the WSJ’s odds or perhaps you simply want to own something that you create yourself, I encourage you to identify a problem and work to solve it. You may be surprised at the lessons you learn along the way!


What Disney’s $34B Brand Can Teach You & Your Business

Categories Brands & Ads, StrategiesPosted on

Odds are you know something about Disney. Perhaps you’ve:

  • Watched Disney movies
  • Picked a favorite character
  • Made the trek to one of their theme parks
  • Bought a Disney toy
  • Or, interacted in one of a countless number of ways with Walt’s company.

Heck, you may even be a true Disneyphile (yes, that’s a term) defined as:

A Disneyphile is a word for someone who truly loves Disney. It’s usually associated with those who are hardcore into Disney; not your average Disney fan.  – Urban Dictionary

Disney has an extremely strong brand. That’s not just me speaking. Forbes ranks Disney #8 on its 2016 list of World’s Most Valuable Brands at $39.5 billion. That’s up three spots and nearly $5 billion in value over the past year.

Whether you are looking to build your personal or corporate brand, allow me to offer you 5 lessons from Disney’s success:

1. Lead; Don’t Just Differentiate

Disney doesn’t claim that 9 out of 10 kids prefer Mickey Mouse. They don’t advertise that Goofy is 13% funnier than others in his line of work.

Disney opted to be a leader from inception. They chose to be different in kind. The company received acclaim in the 1930s for the first ever full-length animated film. When land was tight in California, they transformed a Florida swamp into a world like no other.

What’s the point?

Differentiation is often a zero sum game.

Painful as it is to admit, your customers don’t live and breathe your company – you do. So, little differences in your products or services often go unnoticed. Ask yourself these questions:

  • How are you positioned against your competitors? Can customers even tell a difference?
  • How could you truly innovate your products or services? Your organization? Your industry?
  • What gap exists in your market that is calling out for a leader?

2. Create a Seamless Experience; Don’t Cause Customers to Pause

Step into a Disney theme park and you are immediately transported to another world. The sights, sounds, and aromas seamlessly work together to create and sustain the fantasy. If a park ‘guest’ sees something out of place, she might pause, and the moment will be ruined. This is key to Disney’s brand and the underlying principle is true for yours as well.

Whether you run a restaurant, manage an accounting firm, package consumer products, or accomplish a myriad of other worthwhile endeavors, you must create a seamless experience. If your customers pause because something feels out of place, the magic of your brand is lost.



Consider these questions:

  • What type of experience are you creating for your customers?
  • Is the experience intentional and holistic or is it inconsistent and fragmented?
  • Do you stay true to your brand or do you create gaps that cause your customers to pause because something doesn’t feel right?

3. Drive Interaction; Don’t Settle for Passivity

One of Disney’s more recent animated films, Frozen, was an instant classic. In fact, Disney recently completed a Frozen attraction at Walt Disney World. It allows guests to ‘interact’ with the film, not simply sit in a theater. Guests will wait in line for hours for a chance to ride into the magical world of Frozen.

Fortunately, fans of the film didn’t have to wait for the Frozen ride’s construction to go beyond simply watching the movie. A sing-a-long version ran in theaters and patrons were encouraged to join in the show. Google ‘Frozen videos’ and you will see that fans have invested their personal time to produce Frozen-esque videos. Disney has tapped into the concept that customer participation breeds commitment. Consider these questions:

  • Are your customers investing their time to interact with your products/services?
  • When was the last time you provided your customers opportunities to interact?
  • Can they go to your website, office, or storefront and participate in some way?

4. Produce Memories; Don’t Be Forgettable

If you travel to Disney’s private island, you will likely put out a photo of the trip in your home. It makes sense; that’s a memorable vacation. What is surprising is that when customers visit a Disney store at the local mall, they smile for photos. Now, that’s uncommon. You don’t see people posing for pictures at Wal-Mart.

If you are thinking, “Sure, that works for Disney, but we don’t have loveable characters.” You’re missing the point. You don’t have to be memorable like Disney, you have to be memorable compared to your competitors. Ask yourself these questions:

  • Do you leave your customers with positive experiences that they are likely to remember?
  • Is your brand lost in a sea of ‘others’ or does it stand out?
  • When a customer looks to use a similar product or service in the future, will they recommend your organization? Or will they have forgotten all about you?

5. Build on Success; Don’t Settle

Walt Disney didn’t settle for Disneyland in California. He built on its success to create Disney World in Florida – many times larger and grander. That innovative spirit continues today. There are theme parks around the world, multiple ESPN channels, second and third versions of movies, Broadway shows, a fleet of cruise ships, and the list goes on and on…

Sure, other businesses grow and develop new offerings or locations, but Disney didn’t do that – nothing feels cookie cutter. Each new offering is unique and arguably better. Consider your brand:

  • Have you grown content with your brand and complacent with your efforts?
  • If you don’t strive for something better, where will you be a few short years from now?
  • What can you do today to capitalize on past success?

5 Building Blocks of Lego Success

Categories StrategiesPosted on

Odds are that you have either bought, played with, or at least stepped on a Lego (fellow parents know what I mean).

Why do I believe this to be true? Well, there are lots of Lego pieces out there…

Since inception, Lego has produced over 650 billion pieces. That’s nearly 93 blocks for every man, woman, and child currently living on the planet. They’ve also manufactured 4 billion lego mini figures – one small Lego ‘person’ for every 1.75 people on earth.

Arguably more impressive than the shear number of parts and pieces in circulation is the unprecedented record of recent success.

Ten years ago, Lego was struggling on every financial front and headed toward ruin; however, they turned the business around and put themselves in a strong position. In the past five years alone, the company has quadrupled revenue while growing net income by 9% and gobbling up market share.

Here are five Business Building Blocks uncovered along the way. My hope is that you can build on Lego’s success.

1. Build Connectivity and Interdependence

Think about this – every Lego piece connects to every other Lego piece. There is no silo of blue pieces that refuse to connect with the reds. Yellow pieces aren’t busy trying to establish their own kingdom. Larger Lego pieces don’t take over meetings or demand more attention. All Lego pieces work together toward a common purpose. Yes, I’m being a bit lighthearted, but the point is useful.

Consider these questions about the connectivity and interdependence of your team or organization:

  • How much time and energy is spent defending kingdoms (budgets, personnel, and other resources) as opposed to working together for a common purpose?
  • Do your systems encourage connectivity and interdependence?
  • What do you do when divisive behaviors arise?

2. Build the Right Team

In his seminal work, Good to Great, Jim Collins discusses the need to get the right people on the bus. He argues that before an organization can be truly great, it must get the right people on (or off) the bus and ensure they are sitting in the right seats.

A decade ago, Lego was hemorrhaging money and directionally floundering, much of their turnaround is credited to getting the right people on the bus, starting with CEO Jørgen Vig Knudstorp. Knudstorp provided the clarity, decision-making, and accountability needed to take Lego through a very difficult period.

Consider these questions about your people:

  • Would you re-hire each person if given the chance?
  • Do you have right people in the right places?
  • Is someone hindering performance? What should you do to get it right?

3. Build a Simple and Clear Path

Apple’s CEO, Tim Cook, once said, “We are the most focused company that I know of or have read of or have any knowledge of. We say no to good ideas every day. We say no to great ideas in order to keep the amount of things we focus on very small in number so that we can put enormous energy behind the ones we do choose.”

At one point Lego lost sight of its path. The company said “yes” to a lot of ideas – good, bad, or otherwise. As a result, Lego branched into areas ranging from toys to video games to theme parks. To correct the situation, Lego significantly reduced the number of SKUs offered, sold off the theme parks, and reconnected to its signature Lego block.

Consider these questions about your team or organization’s path:

  • Does every team member know what matters most?
  • Has saying ‘yes’ to low value efforts cost your organization money, energy, or commitment?
  • What should you do today to ensure the organization is on the right path?

4. Build Based on the Voice of the Customer

Lego customers spend an incredible 5 billion hours every year playing with Lego products. Arguably, customers know more about Lego blocks and mini figurines than some of the people who manufacture the product. Although Steve Jobs famously said that “It’s really hard to design products by focus groups. A lot of times, people don’t know what they want until you show it to them.” Lego has found the use of focus groups to be a necessity. Watching children play with its products led to Lego creating and launching the Lego Friends line in 2012. The Friends line doubled first year sales projections and tripled overall corporate sales to girls in 2013.

Consider these questions about your customers:

  • When was the last time you observed your customers interacting with your products or services?
  • Are you making assumptions about your customers based on outdated or inaccurate information?
  • How might you better capture the voice of your customer?

5. Build Strong Partnerships

Lego has found tremendous success through building and nurturing strong partnerships. The Lego Batman and Lego Star Wars products are just two examples. By partnering and producing these products Lego has raised the company’s visibility, increased sales, and encouraged fans of their partners to purchase and collect Lego products.

  • Is your organization nurturing important partnerships?
  • Should some relationships be revisited or dissolved?
  • Do your partners elevate your organization performance and stature?

Great Leaders Address 5 Key Issues to Drive Engagement

Categories Culture, Leadership & ManagementPosted on

Are you effectively engaging both the passion and potential of your people in order to bring out their very best?

If you can honestly answer “yes” to this question. That’s wonderful.

I would imagine that many of your people do love their jobs as they find them fulfilling and a source of purpose and enjoyment.

(Note: If you think love is an overused, inappropriate, or inaccurate word choice, pick something else, but don’t let the word cause you to miss the message.)

As a leader, the engagement level of your people often comes down to how you interact with them, and how you support or hinder their development. I have noticed that great leaders, no matter their level in an organization, ensure that 5 key issues are addressed and necessary programs are in place to foster a culture of engagement.

To help remember the 5 programs, I’ve structured them with the first letter of each program combining to spell out the word STARS.

As an individual leader, you can be the catalyst to help your organization get these right. However, I encourage you not to wait for the entire organization or some other department to put these programs in place or to get them right.

You can start today to cover down on the basics and care for your people in each area.

Here are the 5 key elements, a brief explanation of each, and questions for you to consider as you assess your current performance:

  1. Selection & Orientation
  2. Training & Development
  3. Accountability & Performance Management
  4. Relationships (Coaching & Mentoring)
  5. Succession Planning

1. Selection & Orientation

Imagine what it is like to be the new employee who shows up for her first day at the office and finds herself with no building access, an unprepared workspace, and no clear plan for the first few days of work. If you’ve had more than one job in your life, you can likely relate to the different ways organizations select and orient their people.

Consider these questions:

  • Do you and your organization have a clear process for interviewing employees?
  • Is there a documented and consistently followed process for on-boarding new people?
  • Are new employees quickly and professionally oriented to your team and the broader organization as to have the biggest impact from day one?
  • Employees understand from the first day what is expected of them?

2. Training & Development

Many teams and organizations approach training as an event. Employees attend training workshops and then go back to their daily work applying little of what they learned. This typically doesn’t happen because the employee is a bad person or lacks the desire to improve. The outcome is often a result of treating training as an event – not a process and development as a function of circumstance – not a deliberate process.

Consider these questions:

  • Do you wisely and effectively use your training resources (e.g., funding, facilities, etc.)?
  • Do all employees on your team clearly understand the training, education, and experience requirements required as they progress through their careers?
  • Does your organization have an effective means for measuring return on its training investment?

3. Accountability & Performance Management

People should come to work each day knowing where they stand. They shouldn’t be confused as to what is expected of them, nor should they be unaware of how well they are performing. This means that the organization needs to set and communicate clear goals, encourage employees to connect their daily work to the overarching goals, track progress openly, and ensure that leaders and team members work together to ensure accountability.

Consider these questions:

  • Does your organization have a clear performance management process that leaders consistently use to assess individual performance?
  • Do all employees on your team understand how the organization is performing on its top priorities and how individual contributions align to top goals?
  • Do you recognize and reward performance?
  • Are you and other organizational leaders capable and comfortable with providing candid performance feedback?

4. Relationships (Coaching & Mentoring)

People want a voice and a sounding board. Look for opportunities in your organization to establish both coaching and mentoring programs. Don’t confuse the two. They aren’t the same. A good coaching program establishes relationships where the individual employee is able to explore situations, develop options, and ultimately discover for themselves the best route forward. Coaching isn’t about telling – it’s about allowing the employee to uncover for themselves the way forward. Mentoring programs allow more junior employees the chance to learn from seasoned workers. Unlike coaching, proteges do receive guidance and direction from their mentors.

Consider these questions:

  • Does your organization have an active and effective mentoring program to connect and develop employees? If not, what can you do?
  • Does your organization have active and effective coaching program that allows employees to dialogue with a third party coach where the sole purpose is to help the employee unleash his or her highest potential? If not, what can you do?
  • Are all your employees encouraged and provide time to develop mentoring and coaching relationships?

5. Succession Planning

Whether you are a team of 10 people or an organization of 1,000s, you should take the time to assess future vacancies and how you will fill them. Are you grooming bench strength that can step up and fill key positions if they go vacant or are you going to be caught flatfooted? Things happen, people change jobs (today more often then ever before). Take the time now to map out which positions will turnover in the short- and long-term and create a plan of how you groom people for future success.

Consider these questions:

  • Do you and the broader organization avoid having key positions unfilled for extended periods of time?
  • Is there an effective succession process in place that gives leaders and high potential employees a career path to future job positions within the organization?
  • Do you transition key employees well? Who is leaving next?

Put STARS into practice

If you want to put STARS into practice at your organization, click here. You will be able to get a free copy of a STARS assessment that you can use today.

Best of luck to you and your team as your work to unleash the Passion & Potential of each of your people!