A Strategy Test: Does It Nest?

A few days ago, as I waited for an item I purchased at the local Apple store to be brought to me from the back of the store, I had the opportunity to observe Apple’s frontline strategy. It involved another floor associate assisting a gentleman considering the purchase of an Apple watch.

Now, you might be thinking, what possible strategy would or could an Apple associate really need? Apple devices sell themselves, right? Wrong—especially in the case of the Apple watch, which was a strategic choice seemingly unrelated Apple’s core business. For many pundits it was a head-scratcher.

That “seemingly unrelated” choice must have had several conditions for success, one of which obviously concerned the retail salesperson’s capabilities: A watch, unlike all of Apple’s other products, is wearable—and a fashion accessory at that. In addition, the Apple watch is fundamentally different. It becomes a visible part of your person, and when the novelty of owning one has worn off, you’re left with the question of whether it reflects your image and corresponding personal fashion sense. It thus requires a new selling capability, one centered on personal image, lifestyle, and fashion.

I remembered when Apple chose to play in its brick-and-mortar retail stores, another move that had been met with the same media skepticism the Apple watch garnered. If you recall, the trend was in the opposite direction, a more Amazonian one: shutter the physical to enable online retail to flourish.

The Apple retail store choice was made at the Steve Jobs level, but that choice in turn required thoughtful choices at the retail operations level, one click down from the corporate choice.

As we now know and have experienced, the Apple retail store strategy clearly reflected the Jobsian mindset around simplicity, design, and uniqueness. The retail strategy was, in reality, well-aligned to Apple’s “think different” brand: the notion of a Genius bar, the utter lack of queues and cash registers, self-organizing floor associates, store design and product display—everything was different from a conventional retail store experience.

Back to my observation in the local Apple store.

It was a busy noontime crowd, and at least a half-dozen customers were hovering around the Apple watch station. One Apple associate was already helping someone. I spied another associate approaching the general area, which consisted of two parallel display stations: one for the Apple watch, the other for the iPad. The associate glanced at both, then made a beeline for the watch station. That’s what sparked my interest, because the iPad station had just as many customers around it.

It struck me right then that this particular associate had a strategy in mind, following the framework from A. G. Lafley’s and Roger Martin’s book, Playing to Win (Harvard Review Press, 2013). I mentally began ticking through the “Play to Win” cascade of choices: winning aspiration, where to play, how to win, required capabilities, and management systems needed.

If Apple wanted to win in the “smart wearable” space, it needed to focus retail resources on its success. In other words, this particular retail associate made a strategic choice to head toward the watch station, choosing to devote his personal and professional attention there in an action aligned to both the retail and corporate strategy.

Among the handful of customers at the watch station, there was an older gentleman desperately trying to look savvy, nervously poking at the display watch, but clearly in need of a confidence boost. He was the customer the retail associate chose to help.

Here’s how the choices the associate made in serving this customer aligned with the wisdom found in Lafley’s and Martin’s book: 

Winning aspiration and where to play: check.
I somehow couldn’t picture this particular gentleman wearing an Apple watch, so I inched closer to listen and observe. The first thing out of the associate’s mouth was not, “Can I help you?” or even a qualifying question, but rather a rhetorical: “Kind of confusing isn’t it?” Right away, the customer relaxed. You could see it. A chuckle, a nod, a breath. A little empathy resulted in instant rapport, in five simple words. Immediately, I got this associate’s competitive advantage: empathic connection with customers.

How to win: check.
Once the personal connection was made in that short exchange, the questions began: Considering a purchase, or simply exploring and needing a quick tour? For you or someone else? Do you use other Apple products, an iPhone perhaps?

It turned out that the customer was considering an Apple watch as a birthday gift for his granddaughter, who was graduating from high school. That launched a new series of questions, ones more related to fashion and lifestyle, rather than function. The associate was no longer worried about customer usability, knowing that the gentleman’s granddaughter was a longtime iPhone user, but he was worried about specific model choice. Did she have a favorite color? Did she engage in sports?

The customer didn’t know what his granddaughter’s favorite color was. The associate asked about what she liked to wear, what color her car was, what color her iPhone was, what music she liked. “She loved the one the guy in the hat on that singing show wore,” said the customer. Ah, Apple’s strategic product placement on the wrist of Pharrell Williams, a celebrity coach on the reality TV show The Voice. What she really liked was the band color: pink. It was a lock.

Required capabilities: check.
The transaction was consummated within minutes on the associate’s modified iPhone. Email receipt sent to the customer’s Apple ID email address.

Management systems: check
The whole experience took less than five minutes, in keeping with the Apple philosophy of “ready right out of the box.”

The point of the story is this: If your top-level corporate strategy does not cascade down through the organization to the frontline, if your strategy is a “one and done” kind of thing, you’re missing out on the real power of strategic alignment. Strategy drawn at any level below the very top of the organization must be nested with the one above it. If it isn’t, it won’t be long before you’ll hear employee feedback, such as, “We don’t have a strategy.”

Many companies are good at cascading measurable outcomes throughout the organization. For example, Google has popularized the notion of the objective and key result (OKR). Senior management sets objectives and key results, which they hand down vertically to the business units. The senior management key results become the business units’ objectives. They then set key results and hand them down to functional departments. An upper-level key result is a lower-level objective.

It’s the Western version of the Eastern management practice of hoshin kanri. Hoshin basically means aim, or direction; kanri essentially means management. In Japanese etymology it suggests the shining of the compass’s metal needle, the one leading all the individual units of the group toward the goal. The visual metaphor is that of geese flying in the V formation. Individuals all, but all heading in the same direction, all aligned.

Having measurable outcomes like goals cascade down through the organization is all well and good, but there’s far more power in cascading strategic choice-making, ensuring that there’s alignment between various levels of aspiration (the goal thing), playing spaces, competitive advantage, capabilities, and systems. The strategic organization is a formidable foe in any space, because it’s generally the winner.

You may have a great corporate strategy at the top of the organization. But here’s the test: Does it nest?

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