Strategy from the Academies

Strategy from the Academies

That’s what I heard when I asked a mentor respect why he chose to own and operate very simple, unsophisticated businesses. It was a glimpse into his thinking on strategy.

And a reason he’s worth mid-eight figures.

He had a strategy. He played a different game.

Yes, many smart, hard-working people have goals and objectives. But they lack strategy.

 

Last week, I had a call with two partners based in Europe. They are starting a company in the US, dealing with US customers (B2B). They bring the financing and operational expertise to make ⅔ of the business work.

They want quick growth because they have significant personal and investor money in this enterprise. They have told investors about the returns they’ll receive. And those returns aren’t rainbows and unicorns: they’ve chosen an industry that provides great returns on equity when run well.

They need to hire the missing piece – a seasoned sales exec who has key relationships in this space. Without this, they won’t get traction in this market.

They want to pay market rates but realize they may need to pay the higher end of it.

But there’s a problem. Or a few, actually.

They are starting a business predicated on channel sales.  They don’t have channel relationships.

And it’s a competitive space, so those channels already have established vendors/partners they know and trust.

They want to be a generalist in the industry, so they’re a “me-too” from a positioning standpoint.

They aren’t online marketers, either, so if there’s some hope of pivoting and changing the sales model, they lack that knowledge.

They’re having no luck landing their sales guy.

They asked if I knew anyone they could hire.

My response?

“You want to hire someone who is talented because they will produce; well-connected so they’ll come with a ready-built channel; and experienced so you don’t have to teach them anything.

“If they’re those things, they are making good money. They’re also most likely with a known company.

“You’re asking them to come to your company, which is unknown and undifferentiated, to start over and work harder to get back to where they are now, in terms of comp. And to do it for a firm that offers no competitive advantage to them.

“You’re asking if I know anyone you can hire.

“That’s the wrong question.

“You need to be asking how to take ground, period. Your strategy is flawed.”

There’s a segment of teams in college football that can teach us about strategy.

The military academies – Air Force, Navy, and Army – continue to compete in college football’s toughest division – FBS.

Their coaches make significantly less than their peers at other schools. Economic theory states you’ll have fewer potential coaches in your candidate pool.

They recruit a much smaller pool of potential players than their peers, too, because of the commitment to serve in the armed forces after 4 years of college.  So the coaches can’t offer the NFL a benefit to playing for them. At least not right away.

The players they recruit must also meet strict academic and moral requirements. You don’t go to one of these schools for the raging parties. Another tough sell.

Those players must also meet certain PT requirements during their time at the academies, so their linemen are typically much smaller than their peers at other schools.

In short, if these coaches want to win, they need to have a way of doing so with a smaller pool of potential players, who are typically also smaller in general than their competition.

They can offer a top-notch education, a life-changing experience, and generally, the opportunity to win consistently.

If you compare the academies’ win-loss records, you’ll find that one of them is winning 8 games a year consistently, despite playing some of the best competition in the country. (Navy, for instance, plays Notre Dame each year. Army took Oklahoma to overtime recently.)

How, though?

The coaches who take these jobs know they have a different set of resources than their peers at state and private schools. They typically have smaller players who aren’t as fast as those at USC, Texas, Alabama, or Clemson.

What they have are young men who are incredibly disciplined, hard-working, intelligent, and selfless.

So they win games with sound, but not flashy defense, solid special teams, and a type of offense that wins games, but doesn’t light up scoreboards.

They use the triple option.

The 55+ running plays per game shorten the game because it keeps the clock running. That reduces a more athletic opponent’s advantage in physical ability by reducing opportunities. It also reduces the advantage held by a team with eighty-five blue-chip recruits.

The option keeps drives alive. Some last eight or more clock minutes. That wears down a defense, especially one that is bigger and faster.

The option forces a defense to play assignment football, so defenders have to think more. Which slows them down. (See a theme here?)

The cutting, trapping and pulling of the option enables smaller offensive linemen to mitigate the size and speed advantage of larger and more athletic defensive linemen.

And the nature of triple-option football lulls a defense to sleep. Most plays are designed to look similar. This creates an opportunity for the offense to periodically take big shots. They land some serious haymakers that turn into scores or large gains.

The option is run by roughly 4-5 teams in all of FBS. Three of them are military academies. Because most teams see it only one time per year, it’s a preparation nightmare. Teams who want to blitz and stunt can’t because the option would gash a defense with one defender out of place.

These coaches want to win, and they choose a path that gives them the best chance to do so. They aren’t trying to set records for points scored or to be invited to clinics to talk about their innovation in the offense.

They simply take their resources – their specific type of player – and they build a plan that enables those players to thrive. Despite significant competitive disadvantages.

 

We live in Austin, Texas. My family loves a specific business that exemplifies a strategy to “win.”

Hat Creek Burgers opened as another fast-food burger restaurant 10+ years ago. How to compete with local favorites like Dan’s, Fran’s, P. Terry’s, and more?

They chose to cater to families where no one else did.

If you’ve ever taken a family of more than 2 to dinner, and #s 3+ are children, you know they don’t stay seated.

Hat Creek solved this with enclosed playgrounds.

It helped that they served beer, as one or three can numb some of the screamings from kids.

Food better than most competitors’ helped, too.

They chose to serve families and built their model around that customer.

They have spread rapidly, especially with those buyers.

Strategy for business, put as simply as possible, is a selection of:

• A specific solution for a specific customer.
• Against certain competition.
• In a defined cost and delivery structure.

Inside of the above, there are a number of items that we can look at:

• Pricing
• Speed of delivery
• Quality
• Service and model
• Online vs. direct sales
• Channel vs. direct sales
• Offer structure
• Positioning
• Guarantees

And more.

No, it’s not about goals and objectives. Those give strategy an aim, but they aren’t a strategy.

 

So what do we do with our two founders?

They have several options to reach their goal, which is primarily putting their money to work in a cash-flowing business to produce a specific return.  They have simply defined it as being a generalist in an already-crowded field, offering an undifferentiated product/service. That’s not the real goal. However, correctly defining the objective is a post for another time.

They could look at other industries. Either starting something or acquiring it.

But if they’re dead set on this industry, they still have several options.

They can acquire a business in this industry.  May take a while, and they might overpay, but they’d acquire a business in that space that is already known. And it may well come with the sales org they need.

They can do the work of building the channel relationships themselves. Would take a while, but the outcome is likely certain. It’s hard to beat a founder selling their own company.

They could find an underserved niche in the space. This would enable them to offer a sales exec a competitive advantage, which many would love to have, especially if they possess experience, knowledge, and a set of relationships. This would also cause their messaging and outreach to really stick with channel partners, and enable them to spend their marketing dollars much more efficiently.  It would require more research and developing some operational capabilities, which would cost time and money, but the end result is an enduring advantage.

They can overpay the seasoned rep with experience and relationships. Again, they’re paying more, but the outcome would still be to win new customers.

They could give up on one leg of the stool they’ve established for their criteria:

• Established channel relationships
• Knowledge of the space/market
• Talented and experienced

You pick which one you’d give up, but I wouldn’t give up the first or third options, personally. Either way, they’re going to invest some more time and money into this person than they’d budgeted for said unicorn.

Another route is to try to find a different go-to-market strategy altogether. They could invest heavily in digital marketing and inbound, so they personally field the leads. They’d need to hire someone to help with this, but they’d likely find someone if they did the work. This would then enable them to hire sales reps at a better comp plan later, because they’d be able to sell inbound leads to whoever would be responsible for conversion.

What can they learn from Army, Navy, and the Air Force?

Understand your resources. Leverage their strengths.

Play to win the game, not necessarily to lose 45-47.

Play to win the game, not to be impressive in defeat.

Find a way to mitigate the strengths of your competition. If they’re bigger and faster, slow them down with thinking. If they’re a generalist, stand out with your specialization.

Craft a winning strategy that endures. The academies have been running these offenses for decades and winning with them. Repeatedly. Sure does reduce the cost of retooling every few years to keep up with fads.

Customers. Costs. Competition. If it’s your show, you get to pick. Do so thoughtfully.

Worth talking further? Email me at adam@thenorthwoodgrp.com.