John (00:08): Hello and welcome to another episode of the Duct Tape Marketing Podcast. This is John Jantsch. My guest today is Rich Howarth. He’s the founder and CEO of the Strategic Thinking Institute, where he is a strategy facilitator, speaker, advisor, and coach to executive leadership teams. He’s a New York Times and Wall Street Journal, bestselling author of eight books on strategic thinking, including the most recent work we’re going to talk a little bit about today, strategic, the skill to set direction, create advantage, and achieve executive excellence. So Rich, welcome to the show.

Rich (00:42): John, great to be with you. Thanks so much for having me.

John (00:46): So I’m just going to start with this because if I ask 10 people, I’ll get 10 different answers. What’s your definition of strategy or strategic thinking?

Rich (00:55): Yeah, so strategy for me is the intelligent allocation of resources through unique system of activity to achieve a goal. So simply put, strategy is how you plan to achieve your goal. And as I’ve read your books in the past, going back to Duct Tape Marketing, you talk about strategy before tactics, and I love in there you always talked about the how, not the what. And I think I’m a big believer in that as well. I think too often, as you talk about in your books, and I share a little bit as well in my books, we sometimes see people mistaking their mission, their vision, their goals, their objectives for strategy, trying to be number one in the market, trying to be the premier provider of X, and instead we really need about think about how are we going to get there. That’s really the strategy. So again, I’ve appreciated all the insights you’ve shared over the years on this. I think it’s really helped a lot of us in the field.

John (01:46): Well, I appreciate that. So let’s get into a few more kind of logistic aspects. Is this something that you do once a year, once every three years? I mean, is there a rhythm? Does it never end? I’d love to hear your thoughts on kind of the how often question.

Rich (02:03): Yeah, John, and you hit it on the head initially. You talked about strategy and strategic thinking. So to me, strategy is something that you set and really, if you’ve done your thinking, it should be something that stays in place for a long period of time. Where I think a lot of people could use a jumpstart is the strategic thinking part. So just because we have our strategic direction doesn’t mean that we want to take our eyes off the road. And I know in one of your last books you talk about the importance. You’ve got a great five step process, map, and uncover are two of the first steps in your process. And I think those are great starting points. When we think about strategy, when we think about mapping, as you talk about, you’ve got to understand what’s my situation around me. And I think too often we get our head buried in the internal stuff or we’re so reactive to fire drills with customers that we fail to remember what is the long-term strategy that we’ve got in place. And so strategic thinking for me is really our ability to generate new insights or new learnings on a regular basis that help us keep and achieve that competitive advantage. So I think it’s a great point that you bring up to me strategy, something that we set, but strategic thinking is something we should be doing day in and day out. We need to stay hungry on how we’re going to get better and learn.

John (03:23): It is funny, there are some models out there that talk about strategic planning. I think there’s one very popular one that talks about what’s 10 years from now look like. I’ve had a lot of small business owners, they don’t know what next quarter looks like. How do you balance long-term and reality of short-term? Right,

Rich (03:42): Right. Yeah, it’s interesting you bring up, there was just a study by pwc, they surveyed 4,700 CEOs and it was interesting, 45%. So nearly half of the CEOs said that they did not think they would be in business in 10 years unless they significantly evolved the way that they do business. So one of the things that we’ve got to be thinking about is how are we evolving in, what I like to think is the business model, but it’s really simple. It’s how do we create value, how do we deliver value and how do we capture value? So what I like to do is really create that strategy tuneup. So just like we get our car tuned up on a regular basis, what I recommend is quarterly get together with your team, take a couple hours, maybe it’s over lunch and go through just some of the basic fundamentals of the business. Have the customers thinking and actions changed? Has the competitive landscape changed at all? What’s going on within our company? What’s working, what’s not? That takes a couple hours, but that’s a great way to tune up the strategy, to understand should we be doing things differently, especially when it comes to creating and delivering value to our customers.

John (04:55): And I guess that’s probably as good a description of strategic thinking as opposed to strategic planning. You might have a strategic plan, but the strategic thinking is something, it’s the flexibility, it’s the adaptability, it’s the need to have to evolve and mature, isn’t it?

Rich (05:12): Yeah. I love the words you used there, flexibility, adaptability, that’s something too. It’s that catch 22, as we get older, as we get more experience, we tend to lose that adaptability and that flexibility. And so one of the things I recommend to people is get some perspective outside of your industry. So read a journal in architecture or science or technology if you’re not in those fields, and think about how are those people assessing their problems, their challenges. I’m a big believer too in studying nature, this whole idea of biomimicry, how can we take the challenges that we face? So getting more customers, creating a better sales funnel, closing more leads. When we think about nature, how has nature accomplish some of those things? How does nature, how does a species, how does a duck go from the winter to the summer? What do they do? Do they drop feathers, do they get faster? All of those things can teach us if we take the time to step back and think about how other people are doing some things as well. So I think that’s a big thing. Like you said, adaptability and versatility are really important, but we need to remember as we gain more experience, we have to continue to push ourselves out of that comfort zone.

John (06:26): You use the fitness metaphor quite a bit. I want to talk about the way you’ve broken the book up a little bit. Is there any particular reason why the fitness metaphor works in strategic thinking in your mind?

Rich (06:38): Well, one of the reasons is, again, we think about CEOs and you work a lot of CEOs. I work with some as well. What’s interesting is the average CEO exercises for 45 minutes a day, which I found was pretty impressive. I mean, that’s a good chunk of time each day to be exercising. But what we find is that when it comes to practicing or building our business fitness, and you’ve seen this, John, I’m sure in your world, people, we don’t tend to practice. We tend to play all the time. So you’ve got football playoffs or baseball playoffs, they’re practicing 90% of the time and they’re in competition 10% of the time. But in business, we’re on that activity treadmill all the time. And what I’ve found is the best leaders, they jump off that treadmill, they take their team with them and they think about how are some ways that we can get better? And they devote some time to training, to development, to a lot of the things that you’ve talked about and you’ve helped people with over the years as well.

John (07:34): Taking that a step further, you’ve actually broken up into four arenas. And so maybe I’ll let you walk us through those. Obviously picking up a copy of strategic is how you’re going to get the full compliment, but walk us through those four fitness arenas.

Rich (07:50): Sure, John, and the reason I came up with these four areas, and I use a compass to represent the four areas, is I’ve looked at my coaching notes over the years. The one word that popped up again and again was the word navigate. A lot of folks that I was talking to said, we’re having trouble navigating our competition, we’re having trouble navigating these new market changes. And so I tried to come up with this compass based on the folks that I was working with in the four areas of strategy, leadership, organization, and communication. Because the reality is, even though strategies, my passion, if we’re just good at strategy, we’re going to be a failure. Long-term, we’ve got to be good at communicating, executing, we got to be great at marketing, we got to be great at sales. So there’s so many things to be a well-rounded, strong leader. So I created those four areas to help people almost create a checklist to say, as a leader, am I checking off these areas? Do I have a strategy in place? Am I building leadership capabilities for myself and my team? Do we have a good culture? What’s my emotional intelligence? Do we have our value chain figured out? So all of those things are important, so I try to simplify it, give people a checklist so that they can kind of walk through that.

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(10:08): Now, this offer is limited to new active campaign customers only. So what are you waiting for? Fuel your growth, boost revenue and save precious time by upgrading to active campaign today. So maybe without, again, I know there are a lot of elements in here that rather than just reading a list, but give us a sense of, so you mentioned strategy, leadership, organization and communication. What are some of the elements in each of those buckets? So beginning with strategy, fitness, what are the areas that we would focus on if we were going to maybe make an assessment in that area?

Rich (10:43): So yeah, let’s think about strategy. The one thing that comes to mind, especially when we think about marketing and sales as well, is this idea of resource allocation. So we all know we’ve got resources, we’ve got time, we’ve got budget, we’ve got people, we need to move those around. What’s interesting though, John, is the research shows that 92% of companies allocate their resources once a year when they do their plan. But the best companies, the research shows they reallocate resources, time people, budget programs, projects throughout the year. So that’s one key element that I talk a little bit about in the book is just this idea that look, we need on a monthly basis to think about where are we spending our time, our money, and our programs, and how can we change that so that we’re putting more fuel on the things that are working and less fuel on the things that are not working.

(11:34): And then the other piece on strategy I would mention is I talk about competitive advantage. And again, kudos to you from Duct Tape Marketing. You talk a lot about being different and the importance of differentiation, and I’ve done some research on that following in your footsteps as well. And again, even going back to science, this idea of the principle of competitive exclusion, meaning no two species can coexist that make their living the identical way. So you think about two male lions in the same area in Africa, after a while, one of the male lions isn’t going to be there because trying to do the same thing in the same way. So one of the things we talk about in the book is this really importance of idea of differentiation, which obviously not a new idea, you’ve talked about it 10, 15 years ago, but it is still something that we need to remind ourselves of, how are we different in ways that customers value?

John (12:22): Awesome. So in leadership, fitness, what are some practical examples of ways somebody might, I mean you talk about mental training and emotional quotient and time management even. What are some practical ways that we can be looking into that bucket,

Rich (12:39): Especially for the small to midsize business leader? One of the things to think about is your time allocation. And obviously there’s lots of stuff on time management, but when you look at the best CEOs that have run multiple companies at the same time, people like Elon Musk with SpaceX and Tesla, Jack Dorsey who runs Twitter and Square, one of the things they’re really big on is batching their time. So they’ll pick a couple things and they’ll work on those things for 2, 3, 4, 5 hours out of the day. And I know what people are saying, geez, rich, I’ve got a million things to handle. But the most effective leaders say, look, if I’ve got to do one-on-one meetings with my team, I’m not going to spread ’em out over the week. I’m going to do those all on Monday morning from eight to 11. Because what that does, John, is it reduces the number of mental transitions that we have to make. And what the research shows is that the mental transitions jumping from one topic to the next, that’s the thing that burns people out that causes the fatigue that we feel at the end of the day. So if you can say, Hey, I’m going to do email five times a day in these 15 minute chunks, I’m going to do my performance reviews here, that’s going to simplify your life a lot. So that just that idea of batching our time can be helpful.

John (13:54): Alright, organizational fitness, I’m guessing culture goes squarely into that, developing your people, processes, talent planning for what’s next, innovating. So give us some practical examples of what we might focus on in organizational fitness.

Rich (14:12): Yeah, you’re right on the money, John culture is a big one. And the thing I think we miss a lot of times is we will take the time to do our values, we’ll do our mission statement, our vision statement, but what we really need to be aware of as a small to mid-size business leader is what are the three or four behaviors that you’re seeing the most from your team? Either things that are productive or not productive. Because at the end of the day, behaviors are, so if you want a better culture, you’ve got to pick out two or three behaviors that you as a leadership team really believe in are going to best serve your customers. And then you’ve got to find ways to build those behaviors within your team. Let’s say customer centricity, that’s a popular one. It’s all about the customer. Okay, well we can say that on paper, but what does that behavior look like? That might mean we’re going to answer a phone call, we’re going to return a phone call within one hour. We’re going to return an email within three hours and we’re going to return a text message within four hours, whatever it might be. But putting some specific parameters around what do those behaviors look like?

John (15:20): Alright. And then the last one, communication fitness. So I’ll let you kind of pick out a practical example there.

Rich (15:26): Yeah. So communication, fitness, it’s funny, I never used to talk about meetings at all, but ever since we’ve come out of the hybrid and the remote work the last few years, people still have meetings stacked one upon the other. And so one of the things I found is just taking a strategic approach to our meetings. And what we mean by that is when you have a meeting, there should be three things in mind. Number one, what’s the intent? So what’s the purpose of this meeting that should be shared with people two days, three days before? And I recommend giving one or two key questions that you want people to think about so that when you get together, it’s a true dialogue. It’s not a monologue. Too often I sit in on meetings and one person’s talking for 30 or 40 minutes, that’s not a meeting, that’s a monologue for a late night talk show.

(16:13): So we need to make sure that we’re really creating that interactive dialogue and meetings. And then the other big part is having insights. So when we finish up the meeting, you got to ask yourself, what was my takeaway? What did I learn from that meeting? And if we’re not walking away from meetings with learnings, then we’re wasting our time. We’ve got to either change that meeting or get rid of the meeting. So I’m a big believer as a leader out there, create a meeting inventory. So take an inventory of all the meetings you have on your calendar and for one week score those meetings on their value. Zero is no value, three is high value. And at the end of the week, total those up. If you’ve got meetings that are around a zero or one average, get rid of those.

John (16:58): Yeah, that’s an interesting point because I think there are people that have gotten into this meeting rhythm where they’re just like, no, it’s Tuesday at noon. We do this meeting every week. And it’s gotten to the point where it’s of no value to anyone attending fact mag might actually be negative, but the idea of just canceling and I think really kind of freaks people out, doesn’t it? Alright, so in your work, your coaching work, if somebody said, gosh, I’m listening to this, and there’s some stuff making sense here, but there’s also a lot that we’ve just hit the surface of when somebody says, can you come in and talk to us, rich, do you have a process that you walk everybody through on where do you start?

Rich (17:42): Yeah, so the one thing I’d recommend is to keep it simple, and you made a great point earlier about the difference between strategy and strategic thinking. So when we’re trying to create strategic thinkers in the organization at all levels, I would keep it simple like three a’s acumen, allocation and action. So that’s where I would start. As acumen always be asking yourself, what’s the new value in this situation? So if you’re talking with a customer, if you’re having a staff meeting, what’s the new value here that you can either create or deliver or capture? So always be thinking about what’s the new value here? The reason a lot of businesses wind up failing in the long run is because they started with a good strategy, but then everybody else started to catch up and they didn’t create any more new value. So why don’t we think about that new value?

(18:31): And then the second a allocation, I’m a big believer, and I know you’ve talked about this in the past, John, this idea of the not to-do list. What are you not going to do? Who are you not going to service? Who are you not going to focus on? Too many of us are trying to serve everybody and we’re minimizing the real value we can bring to that select few that are going to find the most mutual value. So big believer, we got to be really selective in who we’re focusing on, where we’re focusing to be as valuable as possible. And the third A is action. We just got to think about what are we prioritizing today? If we’ve got a list of 17 priorities, we’ve got nothing prioritized. So just really thinking about what’s my priority, the one or two things, and then am I matching my time spend to those priorities? If you look at the end of the day and a good exercise for folks to do, track your time for one week in 30 minute increments, add it up at the end of the week, graph it out, and then look at that graph and see if that matches up with your priorities. Too often I’m seeing people say, 50% of my time is spent on stuff. That’s not really my priority. So take the time to assess your time where you’re spending it, and that will really help I think with priorities.

John (19:46): Now you have, and I can’t remember if it’s in the book or if I just saw it on your website, you have an assessment, people can go through and measure some of where they are on some of these things.

Rich (19:56): Yeah, absolutely. So the strategic quotient, we’ve all heard of IQ forever, measuring intelligence, eq, emotional intelligence. So what I’ve tried to create this strategic quotient SQ really measures how people think, plan and act strategically. So it’s an assessment of your behaviors and your mindset, and it’s a good starting point for people to say, yeah, I’m doing a pretty good job here, but maybe I could be doing a little bit differently there. So it really matches up too with those three a’s acumen allocation action that we’ve talked about. So again, just a simple way takes about five to seven minutes, but can start to shed some light on areas that you as a leader might want to spend a little bit more time on as you develop.

John (20:37): Awesome. Well, rich, I appreciate you stopping by the Duct Tape Marketing Podcast. Is there someplace you’d invite people to connect with you, find out more about your work, and obviously about your books?

Rich (20:45): Yeah, John, thanks for asking that. I appreciate it. So there are a lot of free resources, articles, white papers, videos@strategyskills.com, so strategy skills.com, lots of free resources there.

John (20:57): Awesome. Well, again, I appreciate you taking a moment to stop by and share with my listeners, and hopefully we’ll run into you only these days soon out there on the road.