How to Build an Unbeatable Business Strategy Framework Using the Nine Ps

That's what's so great about having an execution system. If that's scaling up in the one-page strategic plan, or if that's EOS or whatever that system is, it is like a platform that you can then just like plug in, you know, every quarter we come up with our rocks and then plug it in and then the rest of it works out.

Welcome to the System Hub Podcast. Hola.

Konnichiwa.

Guten Tag. Where we interview world-class experts.

You have to have a lot of passion for what you're doing.

I was fanatical in my 20s. If you could find a way to produce a business that works without you, your life with Change Like That, extracting, organizing, and optimizing their best systems and processes for rapid business growth.

Now let's get into the show.

In a world that's moving so fast, I think new technologies are being launched every single day, and I think the way that we're doing business is changing at an extraordinary rate. It's really hard to keep up. How do you make decisions that keep you one step ahead of the technology change, ahead of your competition? That's what we're going to be exploring today with our guest, Kajan Krippendorff. He's a former McKinsey consultant and he's worked with some of the biggest names in the business— Microsoft, L'Oréal, Johnson Johnson. He's written 6 books on the topic of innovation, strategy, outthinking your competition. So I couldn't think of anyone better to be talking on the topic of staying ahead. It's something that I think Kyan knows inside and out. So firstly, just like to welcome you to the call, Kyan.

Yeah, thank you, David, for having me on. I love your podcast and it's an honor to be included. Thank you.

Thank you. That perhaps is a way to start. I know you work with quite a lot of larger companies. I know you do a bit of work in the EO space as well, but I'd love your take on what is business strategy and why small business tends to overlook it, because oftentimes it just feels like they're flying at the seat of their pants. And probably the way that they approach this is going to be very different from larger organizations. But I'd love your, yeah, ideas on where you see some of those gaps.

Yeah, in my podcast, we're about 160 episodes. I always ask the guest, what's your definition of strategy? And we have some experts from Harvard and Oxford that are experts in strategy, I never get the same answer. So I don't— if anyone tells you that they know the, what it is, then I would question them. But generally it's about choices, making decisions, what choosing to do, what choosing not to do. And I think that can exist in a CEO's head. He or she can just be intuitive and make decisions, but that doesn't really scale, right? Because you can't have the CEO making all of the decisions. How are we gonna price? How are we gonna distribute? How are we gonna operationalize? How are we gonna recruit? What's our culture gonna be? What's our branding gonna be? All of that, right? And if you can't get it out of the CEO's and enable people to make the right decisions so they align, then you can really scale strategy.

Obviously, strategy is really important right now because of everything that's changing and the speed at which things are moving. Why do you think it's more important than ever to be making the right decisions and thinking about like where you're going to move? I'd love, yeah, your insight on that.

I think it's mostly about speed. I think what's interesting is it's okay. It's more okay now to make the wrong decision because the moats are more shallow. You, you make a decision and you can undo that decision. But the real challenge is that our planning cycles are shrinking. Like we operate on this annual planning cycle. Why do we operate on an annual planning cycle? Because the economy was grown from agriculture and agriculture follows the sun and there's certain seasons. So we've been stuck in this for thousands and thousands of years, this annual planning cycle. But as change happens more quickly, if you think about what you thought at the beginning of last year was going— the year was going to look like, and then what happened with AI and how that changed things, and then the disruptions and global, global disruptions, then we need to start planning in shorter periods of time. And the risk is that we say, oh, we can't plan because things are so uncertain, and then you're running around with like a chicken with your head cut off and you're not making smart choices. So we need to be able to shorten the planning cycle so that we can make smart decisions more quickly.

How do you think about that timing, then I think it's quite common for people to think, oh yes, annual planning. I'll, as a small business owner, I'm thinking over the break, what am I going to do in the new year? And you start to try and put some things in place, and then it's quite common to try and break that down to a quarterly thing, then to try and look for your quarterly rocks. How do you think about it now? Has that thinking changed as far as like the framework, uh, on when to create space to do the thinking? And yeah, how to when is the right time to adjust your strategy?

Yeah, I think that the steps are still the same. You still have to think about the future and focus on the leverage points and generate hypotheses and choose hypotheses and commit to those hypotheses— these like 5 steps. But it used to be that you could cobble up all the thinking time to November and December, right? But now come March, something's changed, and so you need to then compress that. And so you need to have time throughout the year to stop, look at what's going on. Are we making the— are we committed to the right choices? What new choices should we make? So, we need to be able to put that in. Like a lot of entrepreneurs, you've probably heard of this book, The 12-Week Year. Have you heard of that book? I think that's like a nice metaphor. Like maybe it's still an annual planning cycle, but now your year is just 12 weeks and then you have another strategy. And so, you might change your KPIs, you might change your goals, certainly change your priorities.

Hmm. It definitely feels— we're seeing disruption happen all around us. Every industry, every role, AI is just coming and shaking things up. How should we be thinking about staying 2 or 3 steps ahead? It's interesting to watch certain industries and things just almost collapse overnight, and it's very hard to know exactly how to navigate through the minefield. But this is a big part of what strategy is about. It's thinking, skating to where the puck is going to be and trying to put ourselves in the right position and making decisions right now. Is there a particular way that you think through that, or a framework, or a way to make sure that we're in the right position?

Yeah, I still think there are sources of advantage that sustain. There's maybe There are more than one views of strategy, but two common views are predicting the future and getting there first. Right. And then, but the risk is then you just, it's a tiring strategy. You're just running ahead and your, your competitors are following you. You're just like trying to stay a few steps ahead. It's tiring strategy. And, but there are things that every company has that will sustain. I think there's really three things that sustain. One is you have some preferential access to resources. You have some IP, you have some technology, you have some capability. You have customer captivity, customer loyalty, high CLV, loyal customers, captive customers, and you have scale so you can do something cheaper than other people because you have scale. So if you can establish any one of those three, then you still have an advantage that you can carry over many years. Now, you may apply it to different opportunities, but to think that you have to rethink everything will put you in that tiring race that you can only win every quarter. And you also want to look at what are those long-term things that give you power, give you advantage. And they're out there.

Definitely think those— it's tiring, like you said, to try and keep up with everything that's going on right now. It's— let's say you're a small business owner and you're looking at the landscape and what's going on. How do you identify what is that evergreen thing, like that competitive advantage? Is that something that I need to be aware of, I suppose, if you've got that identified, that's what keeps you safe because that's your moat. Some small business owners just think, oh, we provide great customer service. Some people think, oh yeah, it's our clients. Yeah, if you don't yet know what that is, is there a way to think through and try and uncover it?

Yeah, I think that what you should do is you look on a more abstract level. In 1968, Dick Fosbury jumps over the high bar backward. He introduces a new way to go over high bar, the Fosbury Flop, right? The technology that made that possible were pads put on the other side of high bars. It took Olympic athletes 15 years to figure out how to use that technology. So it's not the emergence of the technology, it is the concept around the technology. So there are certain concepts that are emerging that if we get our head around them, we can ride that. One, one big one that has been underway for a long time is coordinating the uncoordinated. It's getting cheaper and cheaper to coordinate things that were difficult to coordinate. And so what you can do is you coordinate things to create new value. For example, Julie Copeland is a friend of mine. She's an entrepreneur, third-generation entrepreneur out of Philadelphia. She had a company that sells safety equipment and she said, how could we coordinate the things that we do? Because if you're selling apples, right, and everyone's selling apples, then you're on a price, you're competing on price. But if you can combine those apples with sugar and dough and make apple pie, you can coordinate to a higher level. So we're able to coordinate to higher levels. So what she did is she said, all right, we don't just sell safety equipment, we also do safety consulting, and we also to do safety training. So what if we coordinate those things? And instead of selling apples, we sell apple pie. She created this service called Safety Care, and now she's not selling it to a purchasing manager who only cares about price. They're selling to the CFO and they're not selling cheap gloves. They're selling safety, which is much more valuable. So that is one universal theme right now that I think is gonna last for the next 10, 15 years that you can start re— you can ask what is uncoordinated. That we can coordinate.

One of your frameworks that you talk about in Outthink Your Competition, I find because it touches on so many areas of business and you go through the 8, it helps to surface some of these. It's almost writing a business plan. It's not always the output, oh, I've got a business plan, that is the big win. It's going through the exercise of writing the business plan that gives you the big win. And your 8 Ps where you talk about positioning. Well, it used to be 8 Ps. You mentioned just before we hit record that it's 9.

Yeah.

But those positioning, product, price, placement, promotion, physical experience, processes, and people.

And then purpose is the other one now, the 9th one.

What's— yeah, your— through those to help uncover this.

Yeah, I think you could, like, for every business, maybe every product or every business or your business overall, you could regularly every quarter, just score yourself across that. Positioning, is our brand strong? Do we know who our customer is? Product, are we overdelivering on the attributes that our products care about, that our customers care about? Pricing, do we have high operating gross margins and we have a unique pricing power, right? Processes, do we have clean processes that are allowing us to deliver on that? Placement, are we delivering through the right channels and the right channel partners? Physical experience, are we delivering a unique through physical experience that gets customers and our employees, like, engaged? People— how do we organize? How do we incentivize? What's our culture? And then purpose— does our purpose activate our employees, our customers, and our ecosystem partners? And what you could do is like a checklist, a business model checklist. And you could do that periodically, maybe every quarter, and just give yourself a red, yellow, green, or a 1 to 10 across each of those. And what it will surface is, hey, our pricing was great last year and our processes were terrible, right? But we work with David and now we got our processes clean, but now pricing, let's think about changing our pricing, who we, who chart, who, who pays, when they pay, on what basis they pay. And so you're always working on the most valuable one. So it's, it's, I think it's, it's pretty, I'm, I believe all models are wrong and some are useful. 9 Ps. I forced it into 9. There's probably a 10th one, but it's a complete enough list. If you talk to a CEO who's been a CEO of like big companies, these are the pretty much the 9 things that they're constantly toggling between saying, what do we need to work on next?

Was there— maybe it's a little bit like saying what's your favorite child and it's very hard to pick. Is there any one in there, a particular P that you think is particularly important for small business, or one that moves the needle the most or has big impact?

Yeah, I think the one that is most underappreciated is pricing, because it's almost like you pick what industry you're in and that industry defines what your pricing model is. And many disrupt disruptive companies have disrupted simply by changing pricing. Like, like, like Netflix. What did Netflix— the three, three big questions under pricing are who pays, when they pay, and what basis do they pay. Netflix said pricing, we're not gonna have advertisers pay, we're gonna have customers pay. So that separates them from TV. Then they said, on what basis do they pay? They're not gonna pay per rental like they do at Blockbuster. We're gonna pay per month. Now that one choice opened up a whole new category of entertainment as a service. And when do they pay? They pay every month and they don't notice it. Like you go to Blockbuster, you return your video and you feel the pain of, oh my God, I have a late fee. But with Netflix, it almost goes into the background. You don't even notice it anymore. So you could say all they did was change the basis of pricing. They create this disruptive force. They introduce a whole new kind of category or Uber. If you buy a car and you pay If you pay per car, you're in car sales. If you pay per day, you're in car rental, right? If you pay per ride, then maybe you're a taxi service, right? And so Uber was able to create this as-a-service model by changing pricing. Salesforce, right? They changed the basis of pricing to be these seats rather than licenses, and they create software as a service. That is a highly underappreciated strategic lever, and most of us are lazy because we just price the way the industry says you should price.

You mentioned Netflix, which is an interesting one and one that I think gets cited quite a bit. Um, if you think about in terms of strategy, and Blockbuster very clearly got it wrong and they had an opportunity. When it comes to the thinking, and we're talking about applying strategy, and you're thinking about— imagine we're in the seats of of running Blockbuster and we're really comfortable with what's going on in the industry right now, we're dominating, we're owning, we rule the market. How would have strategy played, or how should they have been thinking through that opportunity to avoid what ended up happening and then basically imploding when the opportunity was right in front of them?

Yeah, I think there's something really interesting about Blockbuster that many people don't appreciate. And for, honestly, for many years I was telling the wrong story about Blockbuster, that they didn't understand the model. But that's not true. They understood the model. They actually created a whole separate company, Blockbuster.com. They created— they put them in a separate building, a separate team, a separate culture, and they just gave them money and just said, you go up against Netflix. It's not that they did not see it, that they missed it. It's that they weren't able to execute it. And I think that a very important question on strategy. In fact, Peter Drucker, arguably the most influential management thinker of all time, he said strategy is the answer to one question. What business are you in? And your people are walking around saying, oh, we're in the rental business, or we are in the financial service, or we're in the insurance business. Right now, Blockbuster still thought it was in the DVD rental business, or it was in the video rental business, right? So that has a whole implication. But if If you're in the entertainment as a service business, right, then you design your website differently. For example, when— what happened was Blockbuster released this, its website, and then they went to Netflix's website and they said, holy crap, this is not a website. It is a dynamic interface. And everyone sees different recommendations. What I see is different than what— and they had built this thing because they were still thinking we are a storefront. Providing videos, right? So it's very important when you have that strategic view that you don't just say, look at the execution, but you look at the mindset and ask the question, what business are we really in? That changes the thousands of decisions that you make across those 9 Ps and aligns it with it. And that becomes the disruptive force.

It's very hard to look at your industry and your landscape with fresh eyes? Because you always feel like you're looking through it through your lens of your business and what's going on. And almost you said it with pricing, where that's what we've always done, that's what the industry is doing. Are there any particular ways that you can look at something with fresh eyes, or any strategies on, on how to kind of shake loose some of those old ideas? Yeah.

Yeah, I think there is a very easy way, which is to ask, how would this company do it? For years and years when I did my like consulting with clients, it was always like, we want to be the Apple of home building, the Apple of gear manufacturing, manu— manufac— gear manufacturing, right? So the Apple of implies a whole bunch of stuff, but now, now it's like the Netflix of, or it's the Tesla of. On Tesla, probably their mindset was, we're not an automobile company, we're, uh, an electronics company. That happens to be selling automobiles. So then how does an auto— how does a technology company price, for example, right? What you do is you produce a product and you serve a really high price. The first iPhone costs a lot, and then as you reach scale, then you bring down the price and you appeal to a broader audience. How does car companies think? They think we're gonna make an ex— we're gonna get into a market, we're gonna enter an accessible market, right? We're gonna be like Hyundai entering the US. Cheap cars, build the platform, and then sell more valuable cars, right? Sell Lexus after we sell Toyota, right? So if you could— a good way to say is we want to be the Tesla of, or we want to be the Google of, or we want to be whatever that is. And these disruptors, just like in, in nature, right? Like you have an invasive species that behaves differently. It enters a new area and it just starts devouring stuff, right? It's not a healthy thing necessarily for the ecosystem, but a lot of these disruptions are from people from companies that come from a mindset of one industry, and they apply those rules and those norms and those habits to the new industry.

Yeah, yeah. I think we've touched on a couple of the P's now. I'm going to definitely suggest people check out the book to go through all— I think the book covers 8, and obviously we said there's the new—

I've been working from the— on this new one. I have a class that I've been teaching for 15 years, and we're working it And I think it's interesting that, that purpose now becomes one. It was actually, I wrote this thing on the 8 Ps and someone messaged me on LinkedIn. He goes, what about purpose? And I was like, yeah, you're right. It used to be purpose was just to motivate your people. We're gonna conquer the mountain.

Yeah.

But now because of that coordination thing, you need to partner with ecosystem partners. You gotta get people to want to partner with you.

Right.

MasterCard CEO, former CEO of MasterCard, Ajay Banga, he brought brought the price of the stock from $25 a share to over $350 a share. And, and I interview on the podcast, I asked him like, how do you do that? He goes, we realized that our growth opportunity wasn't to take market share away from Visa, it was to take market share away from cash. So then they said, our purpose is to create a world beyond cash. Now what does that statement do? In a world beyond cash, drug dealers aren't going to sell drugs to your kids without that being traceable. In a world beyond cash, a government, when they're sending money to their citizens, it doesn't get pilfered by a bunch of middlemen. It goes directly into bank account. It's about financial inclusion. It's about fairness. And what does that do? The UN then wants to get involved. NGOs, governments, entrepreneurs. It creates this exciting moral force where people, they want to partner with you.

Why?

Because they see themselves in that future. They're not going to join you because you want to be the largest biggest card company in the world. They don't care about that, but financial inclusion they care about. And when you can marry those things, the purpose with the business, then you activate a whole bunch of free support. And you see the same thing with Deere and Company that makes John Deere things. They align around this idea of precision agriculture. Why precision agriculture? Because people are going hungry. Population is getting too big. We don't have enough food. With precision agriculture, we can increase yields. And so what does that do? Drone companies say, oh, we're want to get involved in that. Data companies, suppliers, they all want to start get behind this. Purpose used to be an internal thing, but now it is an external thing.

I wonder if those companies you cited, and a few of them, when purpose popped up from for them, if purpose was part of the original inception of the business or something they retrofit, because a lot of small business, they just go, I do people's lawns, you know, what's my purpose here? I do some sort of home services or trades business or whatever it might end up being. And that purpose could sound really grandiose. I think the longer I've been in business, the more I appreciate it. Like, our purpose is to free all business owners worldwide from the day-to-day operations of running their business. So breaking them out of that. We have a purpose and it helps to guide what we're doing and attract the right people in and repel people. But it's sometimes for small and medium-sized business, it's hard to get that idea across. I don't know if you have any insights on when the right time to add in purpose and how to think about that.

I do think it's like you either need to enter, I think it makes sense, either you enter from purpose into finance or you merge from finance into purpose. I see a lot of entering for finance, that there's an opportunity because margins are high, competition is weak, the TAM is big, it's growing, there's an inflection point, there's a financial reason for why to enter that business. But then you find the purpose, like Brian Scudamore, founder and CEO of 1-800-GOT-DRUNK, right? He saw that, he saw the business opportunity that it was a really fragmented market. No one was happy with it, but then they found their purpose of people just have clutter at home and they, they're stressed out and they don't have space. So like, They have— I don't know exactly how they articulate it. I'm gonna articulate it in my way, but it's just to create peace and, and in, in your home. Right? So I think that you can find it. And a good way to do that is to imagine that you are hugely successful and you've reached number one in the industry, and then ask, how is the world, that world, a better world than today's world? And that can give you a clue as to what your purpose is.

I think going through the exercise, and as I was just going to mention before, the idea of, I think, getting a copy of the book is great. I'll pop a link where people can grab a copy of it. But I suppose maybe a little bit selfishly, I'd love to know where the idea of processes fits into these P's and how you identified it as one of the key P's. And yeah, just maybe you're thinking around process.

Yeah, stack these 8 Ps up. At the front, you have the front-end stuff, which is positioning— who's our customer, product, what do we serve them— placement— how do we distribute them— price— how do we collect from them— promotion— how do we get them through the funnel— physical experience— what do we deliver. Now, all of that's the front-end piece, but then you got 3 things that are the foundation: process, people, and purpose. And so you can't do any of that stuff consistently without good processes. And then many process— most processes, although we're able to now automate more, are run by people. So who are the right people that need to do the tasks in order to run the processes in order to deliver on all the rest? Process is the foundation.

It's funny when you— because I, as I saw them, my brain always looks for order. When I looked at the 8 Ps, I felt like there was an order, and I love that you then identify that, kind of reaffirm that. And it feels funny when I look at it, and then you put purpose right at the end, and it feels like it's right at the heart of it also. It's almost like it was meant to be. Yeah, because it's— if you work backwards, it's almost, ah, we'll get your purpose right, get the right people on board. Okay, now we start to build out processes, and then we can continue down the line.

Yes.

What are you saying?

But I think it does help to know like what your, what, you know, what your product is and how you price it and how you deliver it. That does inform what your processes should be. Yeah. So you're, when you're designing your processes, you're doing it with a hypothesis of what it, what those should be. And if you don't stop and think, who pays? When do they pay? What basis do they pay? You might design a process that locks you into just a boring way to price.

There's, I think, yeah, a lot of those. Other decisions? Because really, process has a lot to do with just capturing best practice and setting standards and being able to transfer knowledge and make sure that we get the team on board. Historically, that has been a real big business type thing, and a lot of small business couldn't quite make the step. And it's like a critical piece that a lot of small business struggled with is getting process. Is there anything that you see that big business understands about process maybe that small business doesn't? And I know you, you deal more with big business, so maybe we can help, you know, help to translate it through. But is there anything that's obvious?

Yeah, I think it's a little bit easier in big businesses because when you talk to people who have worked in business, big businesses for a long time, they're used to following processes. Like they go on a trip and they know that they need to keep receipts and fill out an expense form and submit it. And then when you're hiring people who haven't worked in big businesses, then maybe they don't know that they need to follow a process. So it's easier, I think, to execute in a large company because people are used to it. But also they have the, the scale to be able to like build processes and have people on staff that are ensuring compliance to processes and things like that. But they still struggle. They still can't get salespeople to use the CRM system properly. So it's a constant battle.

Yeah, sometimes feel like the shortcut— I'm appreciating it more and more. Like, in the past I've always said, oh look, process is the most important asset the business has because the people can come and go and you don't own the people, you only own the process. And that's why we have to unlock it from their head. But one of the ultimate shortcuts cuts is finding the right team members who have already seen what the great process looks like. Like they've worked in some of these big organizations, so they know the process for logging expenses and they just do it because they've seen it. That's the ultimate shortcut. If someone's seen what your business looks like further down the road and then they can bring what they've already seen back into your Yeah.

And I think there's a big opportunity there to pick people from a different industry who are used to a different process or a different approach, and they will bring that type of thinking into the company. I see this over and over again. Like one company that I've been following is called Urban Outfitters. They're a clothing retailer and they don't hire retail experts. They hire designers and artistic people. And so they make different decisions about what to stock and how to design the stores and things like that. But that is a very— I would think it, it's helpful to definitely have best practices, right? But I think it's doubly powerful if you have best practices from a different industry, so you're doing things differently and better.

I love that, and it speaks to something you said earlier, and we were talking about that idea of the fresh eyes, because effectively you're getting someone who's got proven process somewhere else, and now we're bringing it in, and your competition's not thinking like that. So that obviously is the best way to out, out strategize them.

Yes, yes, I think that's right. That's absolutely right. And so you also have a process on people, right? So like, who do we hire? What do we recruit for? Your internal incentive structure, your reporting structure, how flat you are, how siloed you are. Do you work in small teams or you work in big groups? Those design choices also are people processes. So you got people and process like feeding on each other.

I like this. I'm starting to build a little bit of a framework as we're talking where It's obvious that strategy is really key. Then coming up with the right cadence on how to think about it, when to think about it, and obviously want to probably increase that cycle. And we think through your lens of the 9 Ps as a way to work our way and make sure that no corner of the business is left unaddressed. And then that helps us to develop our strategy or come up with ideas. Once we've got these ideas, and that's The other huge gap, it's ideas to execution. A lot of business owners, I mean, ideas are much easier to come up with for a lot of business owners because that's, that's their thing, their idea people. Do you have any thoughts on, yeah, how do we then go from coming up with these strategies to implementation? Because that's the gap, and not over-committing. It's very easy to go, oh, we want to do this and this, and then you realize, oh wow, biting off way more than we can chew.

Yeah, I think there's a way to systematize. We— and is both the ideation and the choosing of the resulting of ideas. So we'll talk about the choosing of result of ideas and how you can do that. I'll give you the answer. My answer there is you take every idea, you look at is it high or low impact, is it easy or difficult. And so you have a criteria of we only do things that are, that are going to be short time to market, that we have the capabilities in that whatever. And then impact. What do we value? Do we value revenue? Do we have a profit margins? Do we have an enterprise value? And have everyone trained to choose, make choices based off of these criteria. So then the CEO doesn't have to make the choices. He or she can trust their people to make the right choices. But I do think what people also don't appreciate is that the reason that the CEO is the idea person is because he or she has a playbook in their heads. And if you listen to a CEO who's done multiple businesses, you notice this, uh, a certain pattern. Like, we had— because you're from Australia— the founder of Chemist Warehouse.

Yep.

And he's had many— he's sunglasses to sun— to suntan lotion. And there is a certain pattern that he sees as an opportunity. And I did a workshop— I can't talk about, like, my existing clients, but, like, a long time ago, I did a workshop for Microsoft. And we did this thing where we said, what's the Microsoft playbook? What's the Apple playbook and what's the Google playbook? One example, Microsoft usually has this pattern of wanting to get there first. Apple actually has a pattern of wanting to get there second. It waits until MP3 technology and adoption of digital music and stuff as it goes, and then they go in right now. That playbook can exist in the CEO's head as something that he or she may not be aware of. Of, but you can extract that and you can say, our playbook is to get there second, to make it beautiful, to coordinate the uncoordinated. And remember, we're not a technology company, we are an experience company, or something like that, right? You could extract that and you could train people on it so they're also ideating the kinds of ideas, generating the kind of hypotheses that are aligned with our playbook.

I love that thinking. Like, really, that's what it is. It's pattern recognition. Whoever's in leadership, they're looking for opportunities, and they're basically saying, I've seen this before, and how can I best capitalize on that? And then sometimes the playbook, like you said, is not very obvious to the outside people, let alone the person inside. I think of Apple, and we all think of it as a very innovative company, but it was interesting to hear you go, and I think about getting there second. Yet we don't necessarily think about that, but we think about them being on the leading edge. But yeah, part of their strategy is going, where should we be? Let someone else get the arrows in the back. Yes, yes, let's roll in with the beautiful complete version built off— yes, their arrows.

Yeah, and they bring the beauty, they bring the design. It's like ugly and clunky, and they bring order and beauty to it, and they repeat that over and over again. You also see on the 9 Ps, you do see a repeating pattern of companies that, or industries even, that focus just on certain Ps. We win through process cuz we can out-process people. We win through people because we can recruit and excite the best people. So this stuff can either exist in the CEO's head and then they can make all the decisions, or you can have everyone running around with their own Ps and their own patterns, their own thing, and then it's chaos. But you can take it out of the CEO's head and say, 'Hey, we're gonna win. We're gonna be second on physical experience. That's where we win,' right? And now you got everyone thinking like the CEO.

I think— and that's a big part of really what process is, to make the invisible visible. So if the CEO has a way of doing things and seeing opportunity and a playbook, if we can get that out of their head and then get everybody else on board and go, this is how we see opportunities, and now let's all be looking for them and all be playing on this. That's really that other big area I reckon you're going to have some good insight on, which is, again, it comes from idea to implementation. It's getting the team behind this and rallying so it's not just one or two people pushing and driving. I don't know if you have any thoughts on how we do that.

Yeah, yeah, we do it. Companies are comfortable systematizing that sell effort externally. Like when you're selling, offering a new product, you probably have a playbook, right? You identify who are the early adopters, who are the advocates, who are the resistors, who are the positive-negative resistors, and what message points will work with each of those, and then lay out a communication plan, like to get a product to market. It. But you— the strategy also has an internal adoption curve. And if you can systematize it— when we're introducing a new approach or a new process, right, first thing we do is we say, who are the early adapters? Who was going to benefit? Who are the people going to be hurt from it? And therefore, how do we get the early adopters on first and have a way to do the communication and alignment? Now, if you have— that's what's so great about having an execution system. If that's scaling up in the one-page strategic plan, or if that's EOS or whatever that system is, it is like a platform that you can then just plug in. Every quarter we come up with our rocks and then plug it in, and then the rest of it works out. And that increases the speed of execution, both on the communication side and I think on the execution model side. That's what gives you the ability to be agile and execute quickly.

Yeah, definitely. In a lot of small business, that operating system is missing. And then I think that's why things like EOS and Scaling Up Sales and all of that is so key, and why it connects with a lot of small business when they reach a certain size and they're trying to— it's a key piece to break through to that next level is get that infrastructure in. Because oftentimes they're good at selling and marketing and delivery, but the is they often overlook is that the management piece and that operation system.

And I think it, and I think it's a fair thing to do because when you're trying to figure out product market fit, you're trying to find who's the right customer, right product. Like you gotta try a lot of combinations with that. You don't want to lock down a rigid process. And I know that your processes aren't necessarily rigid, but you don't want to lock down as repeatable something that isn't yet working. But when you get that product market fit and people are calling you, can't keep up with demand and cash is piling up in the bank account, then you're going to burn up if you don't then lock it in with a process.

Yeah, I'm supposed to go a little bit full circle with some of the things that we were chatting about a little bit earlier. And in the tail end, like, there's obviously a lot of change that's happening right now and a lot of disruption. Disruption can be both a blessing and a curse. It— for the quick movers, it becomes an opportunity. and for those who don't, you end up being Blockbuster.

What—

because you're constantly thinking about this, what are you seeing that's on the horizon? Are there any obvious trends to you, maybe that aren't as obvious to other people, around what business should be focusing on or leaders should be focusing on and getting comfortable with now? Yeah, I don't know if there are any trends you're seeing.

Yeah, I think a lot of the trends are getting ridden or over— I don't know, people are losing track of them because AI is such a big thing. But I think that the AI is included in an overall bigger trend. This was in my last book, Proximity. And I think that you see in every sector, agriculture, healthcare, education, manufacturing, everything. What you're seeing is that value is getting created closer and closer to the moment of demand, both in time and in space. Here in the US, there's a— Coca-Cola has the, the SodaStream— not SodaStream, Freestyle machine. And you can go to it, you can press buttons, you can get a caffeine-free diet cherry vanilla Sprite. Now, they couldn't sell a caffeine-free vanilla diet Sprite in a bottle, but they can in a, in that format, because a big part of the value they create is created when they mix the syrup with the soda water.

Yeah.

Now if you wait and wait until you have demand, the easiest demand to, to predict is demand that's already there. When someone presses the button, then you create the demand. Yeah. Now you is, it's more efficient, it's more personalized. And then you see this across every sector. Machines, same kind of machine that, as that SodaStream, but it can take elements and create generic drugs on demand. Take 3D printing. We can print parts. A lot of parts for cars cost more to ship than they could to make. We should be making them when they're needed, where they're needed, right? Food is getting grown closer with hydroponic farming and things closer and closer to the moment of demand. So you could take any industry, and you could say, when does demand emerge? What do we combine to create the value to deliver that demand? And what would it look like? What model could we implement to wait until the demand has emerged to be able to combine those things, but not only at that time, but also at that place? Do you see what I mean?

Yeah.

And so I think that is an overall macro trend that explains where almost every industry is going.

Two things came to mind then, like the moment at which someone signs up or buys something, shorter the period to receiving value. That's always a really great thing to focus on. I've just bought this thing and then I feel and I get value in— how do I shrink that down so I'm feeling really great about that purchase or that trial or whatever it is I've just started? Like, as quick as we can get. And the other thing that came to mind I'm sure I read this in Dell, and there's a book, it's probably got it sitting up there, with Dell computers. And we're going back a little bit, but the thinking is still the same, which is they had everything in these component parts ready to go, and they were able to assemble computers very quickly based on demand. And that was a big disruptor for them and why they grew. Now, that's still slow in compared to today's terms, but the thinking is still the same. Like it's having those pieces ready to go to be quickly assembled. Yeah.

And a big trend that is enabling us to take that Dell model leapfrog is that more of what we're paying for is digital right now. 50% of what Puma buys a new car for is digitally delivered in terms of like cameras and auto mode and lights and interface and things like that. 30 years ago, 100% of what you bought was physically delivered, right? So what happens is more of this gets digitally delivered. We can personalize and customize it, right? I love your podcast. I hope people continue to listen to my podcast, but I increasingly will create a podcast just talking to ChatGPT in the shower, and I just talk to it and I create a personalized custom— like, I was curious about like hot peppers and where they came from and was there no hot pepper in India before? Or it was discovered in, in, in, in Latin America. Right. And so, yeah, I could try to search for that podcast already having been recorded months ago, but no, it was created for me right there in the shower.

Yeah.

So we get, we're talking about now the creation, because more of it's digital, we can now combine those things in personalized, customized ways much more quickly. And so I encourage like anyone who's selling something physical. To appreciate what is the job to be done. If you're familiar with that concept, that Clayton Christensen, what is the job to be done? And appreciate that they don't give a crap about your product. They just want to use your product to get a job done. And they probably use other things around the product, information, instructions, delivery, the other things around it. And those things you could now deliver approximately. Domino's Pizza here in the United States for this 10-year period that we studied, their stock price outperformed Google. All they did was they had a little app that allowed you to see that it was being made, it was being QA'd, it was being packed, it was being shipped. You got part of the experience, even though you didn't have the pizza in your hand. Part of the experience of getting the pizza was these other things that could be digitally delivered. They could deliver that a little bit earlier, right?

Or Uber, right?

You're waiting for a taxi. But the Uber app will show you there is a car and it's on your way. I already am getting the experience of getting the car. That could be digitally delivered. So there's so many opportunities to create proximity without touching the physical part.

What I love about that and numerous points that you've touched on today, this is all evergreen stuff. Like, it's— even though I said, what is the trend, The trend is something still that is going to be in place for a long time, which then means we have the opportunity to capitalize on it. We don't want to focus on a trend that is just a flash in the pan and we build towards it and then it's done and it disappears.

Yes, exactly. If the trends are longer term or the combination of trends and you see what the higher order trend is— there's a guy, John Boyd, he's a fighter pilot. He's— his theory the OODA— Observe, Orient, Decide, and Act. It laid the basis for agile and lean. And he would do this exercise. He would ask people to imagine a snow skiing, a bicycle scene, and a tank. And then he'd say, I want you to take the handlebars off the bike. I want you to take the treads off the tank. I want to take the skis off the ski scene. I want you to put it together and see what— and some people will immediately see a snowmobile, but other people are looking at these things separately. So I think what we need to do is we not just ask, oh, AI, oh, supply chain, oh, sustainability, then we're looking at the 3 things. We got to see what are the 3 things, and that creates that macro hypothesis of the future. And that's what's going to last, and that is what's going to take longer to realize and longer for your competitors to catch up on.

One of Elon Musk's— that's his competitive advantage, that he's able to overlay his knowledge from these different industries, and then he gets a sweet spot right in the middle that no one else can get because he's got understanding. Now, if we magnify this then with AI, because now an individual who gets that overlap can accomplish so much more and achieve so much more with this huge leverage. That's why everybody's saying, oh, when is this first one billion-dollar solo founder-owner company going to happen. Because finally now, if you spot those overlaps and then you leverage technology and AI, you know, you—

I think it's gonna, it's gonna unlock a flood of innovation because it, it can spot the trends. And then you could test whether there's a market for it. You can use these synthetic audiences to see if they would take the offer. And then you need funding then you use Gamma to create a pitch deck, and then you can use a platform to reach the funders. You can launch businesses with so much less friction, and you could be testing out thousands of hypotheses rather than betting for 5 years, betting on one thing. And so, I'm excited to see what that does for the state of entrepreneurialism in the world. It's going to be exciting.

That's right. I love chatting with you because you see that opportunity rather than it being, like I said, this disruption that we're seeing, it's one of two things. It's either a huge opportunity or it's going to be devastating for some. And there are certain individuals like yourself that just see the opportunity. If people want to keep up with your work, I'm going to pop a link through to the book, I think your podcast and website. But where's the best place to keep up with—

say LinkedIn. I'd say LinkedIn. On LinkedIn you can see it's easy to connect with me either on my thought leader side and my books or on our Outthinker Network side and I post all my stuff there and I interact there. It's the best place.

Yeah, perfect. I'll pop a link through to that. Thank you so much for your time, Kaan.

No, thank you, David, for what you do. Thanks for having me.

You've just been listening to the Business Processes Simplified podcast, powered by System Hub. Remember to grab the show notes, templates, and resources at systemhub.com/podcast. Until next time, all systems go.