Strategy in Three Minutes. Episode 15

1. Strategy and Value Exchange: Focus on pleasurable, not measurable

We love to squeeze our nonlinear, complex world into linear scales, formulas, and charts. The question is, what data do we lose along the way?

A business creates value for customers and captures value from them. The value created isn’t measurable. The value captured is measured in money.

The business also exchanges value with employees. Some aspects of this exchange are measurable, but most aren’t.

Business leaders are always obsessed with exchange efficiency. Do they get more than they give?

They were taught in business schools that only what’s measurable is manageable.

In our urge to measure a 3D world with a flat ruler, we've created surrogates like "customer satisfaction" or "employee engagement."

But these metrics tell us little about what those real people think and feel.

Can we measure customer pleasure? Employee creativity?

A few good talks with customers and employees are worth dozens of metrics.

Never rely solely on numbers when it comes to people. You can’t measure them with a flat ruler.

2. Strategy-related terms: Adaptability instead of predictability

The future of AI is as uncertain as your Saturday getaway.

Classical strategy theory teaches us that the long-term future is less predictable than the short-term one.

We apply different planning tools to various time horizons.

Yet, all future events are equally unpredictable. Look at the news: every day, at least one big company adjusts its outlook for the year.

Long-term future events are 5% predictable, and short-term events are 10% predictable – it makes no difference.

Instead of dividing tasks and goals into long-term and short-term, we may divide them into those where we have significant influence over the outcome and where we don’t.

If we’re building a new plant, we have much control over the outcome.

When bringing a brand-new product to the market, we have much less control.

We should plan these tasks differently, even if the timeline is the same.

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

3. Trend of the week: Artificial Intelligence Set to Kill Natural Attentiveness

Exploding Topics reports: Emotion AI is part of the Artificial Empathy meta trend.

“Emotion AI is a branch of artificial intelligence focusing on detecting, interpreting, and responding to human emotions.

It uses algorithms and machine learning models to analyze various signals, such as facial expressions, tone of voice, and physiological responses, to understand and respond to human emotions.

Specifically, the technology turns human emotions into data that can be used to provide more personalized customer experiences.”

Why do they waste precious resources on something so useless, something that won't work in the foreseeable future?

15 years ago, they told us they would be able to target online ads with surgical precision and create personalized online stores.

This myth has been busted, and we're still bombarded with irrelevant ads and offerings.

Today, they try to build a technology that will be wrong 90 times out of 100.

And these AI-powered customer assistants will join chat-bots on the lists of the most-hated customer communication tools.

But I see an interesting strategy here that will soon be considered a niche one – building customer service without algorithms.

What are your thoughts?

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Read also: Managing By Measurable Metrics Leads to Immeasurable Losses

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