#42 Redefining Commercial Strategy: Smart Growth Without Big4 BS with John James

Speaker A: Coming up in today's episode, um, we are talking about commercial strategies. What to improve in your fundamental business setup to make more money.

Speaker B: This is one of the fundamentals of competitive advantage and strategy. If everyone else is doing it, there's basically no yield in it. You have to be very careful. So by virtue of being best practice, you become commercially ineffective. There's no strategic gain there for the company.

Speaker A: That's John James, founder at uh, Hybrancy. Also today, quick fixes that make the individuals in your company more strategic.

Speaker B: And I'll just put another field in there like whether using Monday.comorsona it doesn't really matter. I just put it, I click. This is the first step. One field that says why are we doing this task? And someone has to fill that out and we make it mandatory and there has to be a rationale for doing it. And if there isn't a well written response to that, then to me that's a red flag.

Speaker A: That's all I had on Fixing the Game podcast. Join me on a mission to unveil strategies and hacks that turn the tables on the tech giants. They created the rules, ensuring only they can win. It's time to fix the rigged system. Listen, learn, transform your mindset and conquer the digital game. Your winning journey starts now. Welcome to Fixing the Aim. Today I'm joined by John James, a, uh, global commercial strategist and the founder of Hybrancy. John's helped companies across 50 plus sectors grow smarter by fixing the overlooked fundamentals of commercial strategy. John, welcome to the show.

Speaker B: My pleasure.

Speaker A: I'm so excited to have you because we've actually never had a business consultant on the show. Can you please tell me how, how did you get into commercial strategy and consulting?

Speaker B: I fell into it, I suppose. Uh, I'm a formerly trained marketer from university, but I've always been gravitated towards those bigger, higher order questions. Things to do with the business model itself. The function has become even more orientated around the promotional p. Most of the other three, which I was trained in and I think for that reason it's very interesting when you say you work in marketing, people think you work in advertising or something to do with websites or digital marketing or whatever. And I would say 95% of what I do is nothing to do with advertising, which surprises some people. But it's the lost art of, um, strategy and how firms grow. It's about pushing the commercial fundamentals of a business forward.

Speaker A: Right. But is like commercial strategy not just like a fancy way of saying like how the business makes money.

Speaker B: Exactly. If I have to say it in the least words, it's strategy to do with earnings. Earnings is relative, so it's not just revenue, it can be marginal profit as well as other sort of asset creation. So anything to do with earnings is what commercial strategy is focused on.

Speaker A: And because it depends also who you talk to.

Speaker B: Right.

Speaker A: If you start talking about commercial strategy to someone who does branding, they will tell you, oh, it's all about brand. If you talk to somebody who is in finance, they will start looking at business model. So can you maybe just give a quick overview for everybody who's listening and a dummy version of what are the components of commercial strategy, in your opinion?

Speaker B: I think the best way to think about this is cascading layers of strategy. First, understand where strategy is. Uh, at the sort of top is the corporate layer, where if you have multiple business units, but most people are interested with what I call the business strategy layer, which is around the business model itself, which is where is your market, who are you, what product are you selling, to whom, how they get it. So very basic sort of business, business fundamentals that form that engine of growth. And then the next layer of strategy is more functional layer and that's where kind of marketing, sales, distribution, product and all those other departmental functions come in and how that business strategy cascades and is translated to this functional level. So what I do is I work in that business strategy layer and then translate it down to the functional layer. And coming back to what is commercial strategy? It's really, is this a new name for business strategy focused on earnings outcomes? But, but it is a combination of multiple parts that form a whole or some growth people in Silicon Valley call like a growth engine. And it's very multifunctional.

Speaker A: And do you find that most people have a strategy or when they land with you, they probably don't have one or they optimizing. So what are the typical pitfalls for businesses?

Speaker B: Yeah, look, a lot of businesses think they have one, but they don't really. So they call it strategy, but it's not really. I'm a big proponent of Richard Romit's book, Good strategy, Bad strategy. The hallmark of strategy, whether you have one or not, is quite simple. You've done some research or analysis, diagnosis on the problem opportunity before you start doing anything to figure out what you know and what you don't know, what's, um, uncertain, what's an opinion, et cetera. So at that first level as well, you'd be looking at goals and objectives so translating what you want to actually achieve. And then the third thing is a set of actions or coherent actions that all work together to achieve or try to achieve that goal and objective that you've already set. If you don't have those three things, which is called the kernel of strategy, you don't really have a strategy. So what I find a lot of companies have instead is four things, really. If I had to describe them, these are the four that I come across the most. First is what I call spaghetti strategy. And that is when they're just doing lots of things, throwing lots of things at the wall. Nothing's really coherent. They just go from one thing to the next, throwing things at a wall, seeing what sticks. The second is the Silver Bullet or El Dorado Quest people, I call it. So they're always looking for that one thing that will be the success factor in the business and explode growth by X that is so rare, you're almost not worth even pursuing that method. The third would be the vendor repackage. So that's where they've gone to a vendor like an agency or digital agency or consultant, who's come up with a list of recommendations and they've just repackaged that into a bow and sold it up the chain. Um, obviously there's a lot of conflict of interest there that goes on. And then I think the fourth is like a strategy that isn't strategy, which could be a combination of all those things. But the most apt iteration of that is where they just have a big long list of to dos. They try to prioritize a couple of things, but again, there's no sort of mesh holding all together, no thought process around it. It's just lots of things that they're doing. And if you have any of those four things, which are very common by the way, probably try to get some real strategy here because it will save a lot of problems.

Speaker A: And how do you recognize it if you look at a business and, uh, what are the common signs of the leaders, like winging it? They probably don't know what they're doing.

Speaker B: I ask them, why are you doing those things? And generally the depth and the thought process behind the answer tells you everything you need to know. Often we go with what we're familiar with, as I said before, or what you've always wanted to do or something that sounds good as opposed to things that you know are good. And that becomes very apparent when you ask them, so why are you investing this money into search and social? And they go, oh, I went to this webinar and this personality that I follow, Gary Vee or whatever said we should be doing content and, or oh, ah, we've had a digital agency that does search and we think it's working. And then I asked them like, how do you know it's working? What are you measuring? How do you know it's not due to something else? And that. And then you ask a couple of cascading questions and it becomes very apparent that oh, they've just been doing that because I've always done it or someone else recommended it. So really interrogating that why will be very revealing.

Speaker A: When you talk about strategy and then we discuss media and you come more from like background that is similar closer to me, like also I come from more performance marketing analytics and this online marketing path. And of course there are qualified, at least on paper, strategists from um, Big four companies. And I was always a little bit envy myself. I've never actually worked in consulting, never seen it, how it works. Maybe it's a good thing because I'm not spoiled by this industry. So I'm curious about your view. Um, have you actually looked at frameworks used in consulting in Big four and uh, tried to learn from it or what can you bring from that to your world of more commercial strategy and marketing?

Speaker B: It's hard to answer the question, but their frameworks and training is actually quite good. They don't have dumb people working for them. They're all very bright people. I think the product that some of the bigger brand uh, consultancies provide, uh, is more like a political and risk mitigation product offering as opposed to sound business strategy which used to be what they sold. Now it's more acting as a bit of a political hedge or trying to justify governance decisions and things like that. So it's a very different pillar fish, but there's a lot of consultancies in the mid market that may be contracted by private equity firms or owners themselves which do very high quality work similar to what I do. And uh, it's a very different type of strategy but yet the frameworks and models are important. It's kind of like everyone says, you learn the models and frameworks and then the first day in the job you throw it all in the basket and then you know, you go and attack the problem. But that training does help you communicate things. It helps you sell the strategy internally, which is probably one of the hardest and most crucial parts of it. You can't just come in here and say, hey, this is what you should do and then okay, I've done my job by here's a report, it just doesn't get implemented. So there are uh, certain things like Minto pyramid thinking frameworks. I mean there's a whole bunch of them. I use these mental models probably more subconsciously um, every day without thinking now that I've learned them. But I think it's really important to learn them if you're going to do consulting.

Speaker A: And uh, do you think there is like a rise of this mid cap consulting firms? Because what I sometimes see is that actually it's a big, at least here in Switzerland when I look at companies there is like an underserved market of businesses that need a strategy or need a strategy consultant but they are out of the reach for of these big four companies or even like mediums like larger size consultancy firms and then they rely on themselves or maybe consultants that are maybe not so amazing. So do you also see that there is that uh, huge gap in the market or what's your view on this?

Speaker B: Yeah, I think it's an interesting one. More broadly if we just not think about large or medium or small and so on, maybe just consulting in itself is under attack. I think the I could just query like one of these generative AI programs or LLMs and I can get a pretty good plan. But a plan is not a strategy and a uh, lot of people think a plan is strategy and it's not. So it's around the quality of that analysis and thought process and getting buy in and then having the capability internally to execute the strategy that's probably the most important thing. So what I'm noticing is that the demand for that sort of fluffy planning type strategy with lots of workshops and very extensive six month or three month planning cycles and then you do it again, that is dying or if not dead. And what I'm noticing a lot of demand for is like a hit squad strategy team that comes in, they help define the problem and bring everyone together. They then add ah focus to the team, identify capability gaps, plug those gaps of people and it's kind of like a hit squad that then helps that functional, that cross functional team perform better than would always be the case. And then they go to the next thing and the next thing. That's what's happening internally with strategy departments within large corporates. And I think if you were doing strategy consulting helping enable that and getting closer to that execution and the feedback loop for measurement is the thing that is really crucial that will never die. The problem with that is it's not very scalable because it gets very messy politically with implementation and you open cobwebs in the closet of companies thinking they have capability when they don't and so forth. But I think yeah, the days of that fluffy planning 12 month cycle strategy is dead.

Speaker A: It's actually the big disruption for their, for the consulting firms and also means that for clients they, there's still this gap in the market but also in the consulting. You have a lot of companies that don't have this experience in also implementation because one of the things we talk to our clients about is that we consult on things that we understand. Uh, we, we've seen feedback loops on the work that we did on projects. So it's not just you know, a theoretical exercise, it's actually very practical. And I think that's what you're talking about, that this hit squad that comes in there will be judged on results rather than on paper produced.

Speaker B: Yeah, I think there's a common misdenomer that strategy is planning. The number two thing is that strategy doesn't include execution and that's not the case. As I said, the third part of it is an action plan that you then assign and execute that's coherent, that is then overseen by someone to make sure it's implemented and correct. But I think over the years this separation between planning and then the implementation partner has become quite a lucrative model. Like I said, that sort of planning phase is very scalable model, high margin for a consulting to sell. The implementation thing is not the way the implementation partners monetize is via the resale of expensive software stacks and things like that, the trailing commissions, et cetera. So there's the being that separation that's created just because of the business model. But it shouldn't be like that at smaller firms especially. So if your strategist sort of runs when it comes to execution, that's a red flag of their ability. I go down all the all levels into crazy tactical detail. And again I think that's another misnomer that strategy doesn't include tactics. I see the strategy versus tactics thing like it's, it's a very blurry line there uh, between the two. What strategy doesn't include a list of tactics for example? It's not really a strategy in that case I think how John Doerr from Kleinik Perkins, early investor in Google says it best, he's like ideas are great, execution is everything. It takes a team to win. And I think that's Silicon Valley mantra of execute is something that maybe more politically minded larger Corporates could maybe heed a bit better and let's try to bring those both worlds together.

Speaker A: I uh, totally sign up though because I think we learn so much from just doing, talking about it, testing actually. But only when you actually start implementing and doing and actually seeing something work, then you learn so much more than sitting in workshops and thinking about doing the work and talking about.

Speaker B: I did that today actually. So I convinced the client to move away from. They were, I would say, a high fiction to professional services vendor and they had this very much digital agency style. They didn't really have a strategy, it was a pick list from, taken from the digital agency. So of course there's search, there's social, there's some programmatic ads going around, there's some Reddit ads, there's planning pages conversions, all this kind of infrastructure, CRM, et cetera, et cetera. But then when you looked at the commercial impact of all that over the past year, it didn't improve things at all. There was lots of kind of low quality leads coming in that weren't really sales qualified. So there's lots of energy, lots of things happening, lots of website hits and conversions, blah blah, blah. We didn't earn any more revenue last year. We lost the client and we didn't gain any really good quality ones. So what's going on? I've tried to pivot them towards more of things that are more impactful for the target market that they're trying to get, which are uh, very time poor people. But don't spend time on LinkedIn and things like this and don't fill out forms and don't go to Google. They ask their friend, hey, who would you trust for this thing? Because this is a critical service. What brand do you use? Do you know someone good that can recommend me someone? And that's how the buying process starts. So to intercept that as uh, someone that's consulting this firm to grow, it's a high touch thing. So there's really a high touch direct marketing pieces going to very targeted people with topics that they're very interested in. We just did our first webinar today. This is with lawyers which are very hard to get because they're very time poor and time is worth a lot of money. So to intercept them is very difficult. We did that. We're then going to follow up with another physical event. A lot of high touch sort of sales outreach, long sales cycle and it's proving to be incredibly effective commercially. So that just goes to show you like the difference between maybe if you're agnostic to these things, how that action plan may pan out and ah, it's so valuable.

Speaker A: Right, because what you're basically talking about is a company that was advised by an agency that is just assuming that things work like this for every industry and they just take the best practices from Google and apply it to anything they see. So that's a very typical scenario.

Speaker B: It's very dangerous. I call it like an institutionalized ecosystem. Sort of people, they've grown up in this world, all the infrastructure is part of that world and that ecosystem. And then for them to hear something that hey, that's not working doesn't really compute with them because they don't have any skills in this. They have areas that they fight back.

Speaker A: Totally.

Speaker B: I mean it's not always like malicious and I've grown up in what they think to be true.

Speaker A: I was in a workshop last two weeks ago with a well trained kind of Google Ads professional and, and I actually evaluated his work with the client and it was also like very low return on investment. Everything was like what he was doing was actually not profitable at all. And the client was open minded enough to have me also in that conversation together. And this guy was really defending his work but, and everything he said was correct like according to Google, according to the best practices. And he was not a bad actor in this. He was just implementing everything that Google taught him to implement. And it's like by the book but this just doesn't work.

Speaker B: See this is one of the fundamentals of competitive advantage and strategy. Realize like if everyone else is doing it, there's basically no yield in it. So by virtue of being best practice you become commercially ineffective. There's no strategic gain there for the company. So the more people, it's a kind of paradox that really hits um, home with a lot of executives because it feels comfortable to do what everyone else is doing in the way that everyone else is doing it. But it's not going to get you above and beyond your competitors are doing exactly the same thing. So logically you should not be doing anything that sounds remotely orthodox at all if you want to create incremental earnings for that business. Which is very weird because some of the recommendations I'll give will be completely the opposite of what everyone else is doing and that will create fear and anxiety and uncertainty for a lot of decision makers because they're not used to it.

Speaker A: But also it's very difficult to distinguish between let's say fundamentals that are extremely necessary and needed versus these best practices that everybody else is doing. Sometimes these companies don't have these fundamentals and they go after best practice. Some best practices are basically recommended by these large players that only profit from this.

Speaker B: Yeah, I think the best practices are really good for systems and processes, uh, inside organizations. When it's like an operational day to day thing, the commercial strategy is completely devoid of all that. For example, best practice in the production line, manufacturing line makes sense. You want to eliminate risk, you want everything to be uniform and there's quality controls. Like you should have best practice things around organizational design as well. But when it comes to commercial strategy, that is the one area that best practice does not mean. Best practice.

Speaker A: When we look at how you audit a company or diagnose issues, can you talk about this? How do you fix this? Foundations of growth and what do you generally look at? And for someone else who is listening to this, a uh, business owner, what are the, your favorite areas where you see a lot of growth potential?

Speaker B: Typically, I'll say maybe my top three. One is culture and mindset. So the culture of the business and the mindset of the senior decision makers trumps everything else. It's really hard to change that. I've tried before, it's just not really worth it. And if you do, if you are successful in changing culture, mindset, ah, it's a very long hard slog. I think there's a famous quote by Warren Buffett, uh, it's best to leave a sinking ship, then try to stay there and plug the holes. I used to think that was a bit defeatist, but it's true. Just move on. So that's my first litmus test. Are uh, they open minded? Do they embrace the inherent uncertainty and risk that goes with a lot of this experimentation that needs to happen? If there's someone looking for certainty, best practice, all this kind of thing, basically removing any risk whatsoever, they're just never going to be successful at this. They'll just coast along and stay within the normal category, growth within that, within that business or whatever. So that's the first one, I think the second one is how well the incentives are aligned between everyone that needs to work together to create commercial growth and earnings. So there's a few key departments there. Product sales, marketing, distribution, partnerships, whatever, pricing. I work very closely with CFOs for this reason. But all of those four need to get together, they need to have regular meetings. There needs to be cross collaboration and shared incentives. So if I see siloed departments, for example, no incentive structures, no appetite for proper incentives, then it's going to make any of those things that we're going, hey, uh, here's our action list. Let's execute. It's just going to get lost in bureaucracy and politics and no one's really going to do it. So that makes implementation extremely hard and you're going to lose the synergy effect of all those people working together. So that's probably the top two. There's a list of others after. Keep a couple of secrets.

Speaker A: And then you're also like the action plans. Do you have any also typical tips or pitfalls that you see? Because culture, of course, stuff like that, it takes ages to change. And also uh, incentives, it takes time. Are there any like quick fixes that you don't typically observe and come to people?

Speaker B: The way I tiptoe uh, the toes into the strategy water is I'll go through whatever task management or project management system they're using to execute a lot of these initiatives and I'll just put an other field in there, like whether using Monday.com or Sona, it doesn't really matter. I just put a quick, this is our first step, one field that says why are we doing this task? And someone has to fill that out and we make it mandatory and there has to be a rationale for doing it. And if there isn't a, uh, well written response to that, then for me that's a red flag. That is a really easy way to put a bit of strategic discipline back into teams. If you want to go a bit further, there's things like prioritization or rice models around. Okay, so we have all this to do. Lists we've written, why we should do this task. But which one should we do first? Right. That comes down to prioritization and which one we think will have higher impact and easy to do. Get across the lines. And then there's some metrics as well that we might put into these tasks. So if this task is a, uh, success, what is exactly does that look like and how will we measure it? Inevitably at the end of the period someone's going to have to report on those things as a department or a single person. So, you know, you might as well get that defined now so that it will help orientate the completion of that task to achieve that objective even at a micro level. So if you have all those three things, that's a really good start that will get you most of the way there. The coherence though is the thing that is missing from that. All those to dos need to work together and that's where maybe you need a bit of higher order thinking of some to come in, help create that discipline.

Speaker A: The episode will be called something around, uh, a long lines of redefining commercial strategy, Smart growth. Is there anything you want to add?

Speaker B: Yeah, I think there was a really important book that I wrote by, uh, Shane Parish. Thinking clearly is the book this is taken from. So I have to give kudos to him. Also his Great Mental Models book. If you want to get into these frameworks, I'd highly recommend you buy that book. It's a red cover called I think called Great Mental Models by Farnum street, which is his blog. He says that a lot of people make the mistake of having one meeting for what should be two meetings. And this meeting is the thing where, hey, we have this problem opportunity. Everyone gets together in the room and they, uh, go, okay, how do we best do this? And all these ideas pop out, oh, we should do this, we should do that, we should do that. There's this big discussion, all these things, ideas are created or brainstormed and then there's maybe some follow up meetings and that's whittled down to some things that get executed. Right. Is the discipline is to think clearly, is to separate that into two meetings. The first is to just do the diagnosis and the analysis on the opportunity or the problem that you're trying to solve and don't do anything else but that. And think about what we know to be true, how can we verify this, what's the risk, et cetera, et cetera. And you stop there, you do not go any further. There's no ideation about solving the problem. It's just problem definition. And then the second meeting, you may bring in a couple of people from the first meeting, but then all the other people who will then be responsible for executing. So you might keep those senior leadership people that were in that first meeting who have a very wide knowledge and deep knowledge to diagnose and define problems correctly. And in the second meeting you bring in some of those people and then all the other department heads to then go through, okay, this is how we think the way things are. Or there's a problem we're trying to solve, um, who has some ideas to help solve that problem. And then everybody creates really good ideas. You get natural alignment and then you go from there. And then after that you have the action plan and then you execute, which is another thing. My advice is to separate them two meetings.

Speaker A: Thank you so much for sharing. Maybe you can also talk about hybrancy quickly and where people can find you and what you're looking for.

Speaker B: Sure. What I do right now is commercial strategy consulting worldwide actually. So I'm in Australia right now, but I uh, have a lot of clients in Europe and the US as well. So what I do is just basically what I told you today are very simple things that make a huge difference to the earnings of the company. I generally work with private companies though. So uh, private equity, privately owned companies, not corporates. It's too political. Then a nice cutout. Normally I tap it around 100 mil ARR, mask mark or around there or 500 mil. And yeah, what I do is private consulting. And then on the side I'm building a bit of a platform to make this hopefully a bit easier for everyone to execute because it's very complex. So I'm trying to encode that into a bit of a tool or platform of my own in the background as I, as I do this consulting. And then yeah, for fun I do something similar to you. So I have a podcast show where I interview other people that I'm interested in to hear their opinions. But I'm staunchly independent and no uh, one pays to be on the show. You get like people at the front line of what they do and you get a very different idea about how to do things than those small buzzword senior leaders in corporate.

Speaker A: And what's your, what's the focus of your podcast?

Speaker B: Commercial strategy. It's called Champagne Strategy if you want me to plug it. It's about all the different areas of product promotion, all the different channels, pricing, we partnerships and distribution models, marketing operations. There's a recent one I did, so yeah, it goes into all the areas that I come across and have to solve in my professional work.

Speaker A: Thank you so much John. It was really fascinating to listen to you and I think it will be super valuable to the listeners. Thank you.

Speaker B: No worries. My pleasure.

Speaker A: That brings us to the end of today's show. My thanks to John. To find out more about what and what we do, go to our website what Digital. And if the topics resonate with you, download my book of hacks which contains ready made recipes for growth that I've collected in my own client work at what and picked up from conversations with my guests on this podcast. You can find it on WOT Digital. Remember to subscribe and to look out for the next episode. You will find it wherever you get your podcast. That's all for now. Goodbye.