Strategy First

How Businesses Win Big

Brad Chase

• Publisher: Greenleaf Book Group Press
• Year: 2020
• Print ISBN: 9781626347120
• eBook ISBN: 9781626347137
• Topic: Business
• Subtopic: Business Strategy
• Index: Business

Business Success Requires Strategy First

In Strategy First, Brad Chase, the mind behind some of Microsoft's largest and most successful initiatives, explains why building robust strategies is the imperative to business success. Chase leads readers through his easy-to-use strategy model, Strategy = E x mc2, which teaches readers the art of strategy—how to build and execute winning strategies relative to the competition. To supplement the model, Chase provides 5 key tips to strategy prosperity and over 50 examples from a broad range of businesses that help the reader think about how they can use his Strategy First toolkit. The author will inspire readers to examine the effectiveness of their current strategies, using the model that has served him in his distinguished career.

Chase began his Microsoft tenure in 1987, where his award-winning marketing campaign promoting Windows 95 broke numerous records and his efforts as MSN.com's leader prompted a turnaround of the site's success. Chase ended his tenure at Microsoft in 2002 and since then has served as an advisor and/or board member to many companies, such as GE, Brooks, Expedia, and the Boys and Girls Clubs. Chase has also shared his Strategy First approach across the nation through speeches to executives at large and small businesses, incubators, and students at topflight MBA programs and at conferences.

CHAPTER 1

The Strategy Imperative

When Marie Kondo’s book, The Life-Changing Magic of Tidying Up, was first published in Japan in 2011, sales were pretty standard. Kondo was in her mid-twenties and worked at a staffing agency full time and as an organizational consultant on the side. But when Kondo’s consultancy “side” job grew to have a months-long waiting list, she decided to make a big bet and quit her full-time job to focus on consulting. She wrote her book—loosely based on her college thesis, “How to Declutter Your Apartment—From a Sociological Perspective” in response to clients asking how they could learn about her method while they waited for their consultation.

Fast-forward to today and Kondo oversees a sprawling and multinational decluttering empire around the KonMari Method, her minimalism-inspired approach to tackling clutter category by category rather than room by room. As of 2019, she’s authored four books (which have sold over 11 million copies and have been translated into 40 languages¹), created an online database that connects people to certified organizational consultants, been named one of Time magazine’s 100 Most Influential People in 2015, launched a lifestyle brand that includes a storage box collection that was sold out for months after its release in 2018, starred in her own Netflix series, and has a smartphone app under development.

How did this happen? How did she go from standard sales to a multi-millionaire magnate? What was her secret ingredient?

I have done countless speeches on strategy over the years at companies, conferences, and business schools. I always begin my speeches by asking questions, and there is one question I always ask the business leaders or MBA students in the audience: What is most important to the success of a business and a business leader?

Think about it. What would you say?

The problem with writing a book is that I can’t hear your answer. There is no two-way dialogue with this medium (yet), but I can tell you some of the answers I often hear: vision, charisma, inspiration, communication, trust, values, empowerment, influence, process, sacrifice, empathy, compassion, power, emotional quotient, intelligence quotient, judgment, good people, and knowing your competition.

And obviously these attributes are super important, but I would claim that none of these are the right answer, not really. My contention is that creating a winning strategy is most important to the success of a business and a business leader. There is no successful company that doesn’t have a successful strategy. Often the strategy is thoughtfully forged. Sometimes it comes from trial and error, and sometimes a successful strategy is dumb luck, but a winning strategy is the business success imperative. You can be charismatic, you can know your competition, you can have good judgment, you can hire the best people, and so on and so forth, but if your strategy fails, your business will fail. The MS-DOS, Microsoft Windows/Office story reinforces that.

THE “E” STRATEGY

My first couple of years working at Microsoft were spent on Microsoft Works for Macintosh (as I mentioned, Microsoft dominated Macintosh applications at the time), and then around 1990, I jumped over to be the first Microsoft Office group product manager before being asked to run the marketing for MS-DOS. At the time, MS-DOS was on millions of computers, but the only way to get a new version was to buy a new computer. When MS-DOS 5 was introduced, it was the first time a consumer could go to the store and buy an upgrade that, once installed, would take the old version of MS-DOS and replace it with a current version. I was tasked with overseeing the small marketing team that directed the MS-DOS 5 launch. We did a nice job, so much so that I was asked to run both the marketing and development for MS-DOS 6, the last big version of MS-DOS. When that was a success, I was offered the opportunity of a lifetime—to run point on marketing for Windows 95. It ended up being career transformative.

The launch of Windows 95 was comparable to that of the early versions of the iPhone. The hype surrounding it was crazy; it was the talk of the town, and to rein in the chaos around its release was a tall order. I knew, first and foremost, that it required a solid plan. I needed a sound marketing strategy. Since MS-DOS was no more, I reorganized the talented MS-DOS and Windows marketing teams into one Windows marketing team and then got to work figuring out how to pull the whole thing off.

Everybody wanted to know everything about Windows 95—users, partners, companies in the industry, the press, competitors—and there was an incredible pressure to make sure nothing got leaked. One night, I was working late after the kids were in bed, and the marketing strategy suddenly came to me: What if I turned everything on its head and opened the floodgates? Instead of trying to prevent everybody from knowing everything about Windows 95, what if we did the opposite? What if people got to know every last thing?

My theory was that if the marketing centered around everything the new software offered—a brand new easier graphical user experience with things like the start menu, the ability to run multiple programs simultaneously (preemptive multitasking), and plug and play so new add-ons to your PC (like a printer) would install and work seamlessly, to name just a few—then consumers, including the more engaged industry influentials, would be educated and privy to what was behind the curtain. In turn, they’d be engaged and excited and would bet on Windows 95. Plus, if the third-party community that wrote software programs, built hardware like computers, mice, and printers, and wrote books and training materials knew what to expect and were excited about it, then their products would come out earlier, taking advantage of the innovations in Windows 95 and giving people more reasons to move more quickly to Windows 95. If it all worked out the way I was thinking, perpetual motion would feed on itself and lead to success.

I called it the E strategy: Educate, Excite, and Engage. The goal? To make Windows 95 a consumer phenomenon. The execution? Imperative.

My marketing team was primarily organized by customer. One team focused on consumers, a second on business, a third on press, a fourth on partners like PC manufacturers and software developers, and a fifth on working with Microsoft’s international teams outside the United States. Each team developed its “Educate, Excite, Engage” plan specific to its customers. For example, when it came to education, business users wanted to know about the costs and benefits of training employees to become proficient in the new user experience with the “start” button, so we developed those materials. Technical users and the industry press needed to know the detailed specifications and how more advanced features like networking would work, so we developed these materials, did countless press tours, and ran countless seminars. The general press needed reviewers’ guides and product explanations, so we held a consumer press seminar to teach even very computer-novice press people how Windows 95 worked. We also did broad-based education, like distributing 10 million demo disks in computer magazines and running a 23-city Windows 95 preview tour to educate interested consumers about the product.

My boss, Brad Silverberg, the vice president and overall Windows 95 leader at the time, had the idea to run the largest beta test in software history, and my team added a broad preview where users could pay $20 to play with a test version of the product. In the end, over 400,000 users tried a test version of Windows 95 before the final version was released. The beta test helped the team find bugs and ensured that Windows 95 worked with older software and hardware, but from a marketing standpoint, the beta test and preview program got hundreds of thousands of people to try it out. It was free publicity, free insight into the perks of the product, and yet another one of the countless programs we ran as part of the “education” element of the strategy.

“Engage,” in my terminology, was about getting the industry knowledgeable about and committed to shipping products for Windows 95. We did endless sales calls, training, and technical seminars so industry players could take advantage of the features of Windows 95 in their products and have them ready to go when we launched on August 24, 1995. We worked with PC manufacturers to ensure their PCs would be ready, as well as resellers so boxes of Windows 95 upgrades would be available the day of the launch. That timing was especially important because most stores ran midnight madness sales. Our intentional groundwork with partners led them to promote and spend money to market their product with Windows 95, like when GT Interactive did a video guide to Windows 95 featuring Friends stars Jennifer Aniston and Matthew Perry.

All the education and engagement activities created excitement for Windows 95, but we also turned up the hype machine as part of the “excitement” leg of the educate, excite, and engage stool. On the August 24th launch date, we lit up the Empire State Building in red, green, blue, and yellow—the colors of the Windows logo. We draped a 300-foot Windows 95 banner down the CN Tower in Toronto. We landed the new product on the cover of national news magazines, on TV and radio, and in the industry press. Basically, it was impossible not to know about Windows 95.

Of course, most of the attention Windows 95 received was not publicity we generated directly. For instance, Doonesbury ran a whole comic strip series making fun of Windows 95. When it hit ten days before launch, I told the team we had officially achieved our goal: Windows 95 was a consumer phenomenon. (I loved Doonesbury at the time and asked the PR agency to get me a signed copy of the strip, and Garry Trudeau was nice enough to oblige.)

START ME UP

To keep the excitement going after Windows 95 was launched, we wanted a big, bold advertising concept executed with an energetic but approachable campaign. We worked with a stellar ad agency that came up with the Start Me Up campaign, which hinged on the functionality of the brand-new start button as well as the Rolling Stones’ 1981 hit of the same name. It was brilliant.

There was just one problem: The ad agency could only get the rights to “Start Me Up” if we sponsored the Rolling Stones next concert tour at a cost of $10 million, which I simply didn’t have in my budget to spend. But, the Start Me Up concept was so strong and the idea so bold, it wouldn’t have the same effect with any other song, so at the end of May 1995, I flew to Amsterdam to personally meet with key Stones personnel to try to negotiate a better deal.

The Stones were set to perform two “unplugged” concerts at the Paradiso, and I arrived the day before their back-to-back shows. I met with their concert organizer, as well as the litany of folks he brought with him, in a big, ornate conference room in an old, elegant European hotel. During our meeting, we could hear the Stones fans huddled outside hoping to catch a glimpse of the rock stars. We discussed the deal all day but didn’t make any substantial progress. They asked me to stay the next day to discuss the deal more and attend the concert, but because I was slated to leave early the next morning, they invited me to the dress rehearsal that night.

It was fantastic. Unbelievable. I was one of only two people in the whole place who were not Stones personnel. They played for two or three hours, and they couldn’t have sounded better. I could tell the band members were close; they would stop periodically to discuss something and joke around. Jagger gave Ron Wood a hard time about all the cigarettes he smoked. It was an epic evening, and when I was asked if I wanted to meet the Stones, I thought about it and then politely declined. It had been such a perfect night—my own private Rolling Stones concert—and I didn’t want to ruin it. I’d met enough famous people during my time at Microsoft that I preferred to hold on to the perfection of the concert rather than risk tarnishing that. (I experience outrage from people about half the time when I tell them I could have met the Stones, while the other half think I was a genius to just end the night with the perfect concert.)

Negotiations continued over the phone for a good month after I went back to the States. They asked for certain rights or limitations on how we could use the music, and I countered. They asked for millions more than my budget allowed, and I told them we weren’t even close and then offered something dramatically less that I thought was fair. I rolled the dice and gave my ad team permission to start moving forward with the commercial, assuming I could successfully complete the deal—though they were also working on a backup campaign.

As time rolled on, my team was appropriately apoplectic, as we were already well beyond the time we should have had the music. But some negotiations are a delicate dance, and this was one of them. So finally, when I thought the timing was right, I handed down my final offer and gave them 24 hours to agree, or I was going to go with our backup ads. They called the next day with the go-ahead. We signed the contract, and they sent us the recording of the song, it was incorporated into the ad, and the rest, as they say, is history.

Some have called the Start Me Up ad the most successful commercial Microsoft ever had. But overall, though extremely visible, the ad was a small part of the whole marketing effort, and the marketing effort was only a part of the mammoth effort that went into developing such an iconic, successful product. Microsoft sold 7 million copies of Windows 95 on diskettes and CDs in the first seven weeks, and within a year, 40 million. In 1995, 60 million computers were sold worldwide. Ten years later, that number surpassed 200 million, nearly all of them pre-installed with Windows 95.²

THE BUSINESS SUCC...

Table of contents

• Cover
• Title
• Copyright
• Dedication
• Contents
• Foreword
• Introduction: Two of the Most Successful Business Bets in History
• Part I Key Elements of a Successful Strategy
• Part II: Activating the Key Strategy Elements
• Part III: Exponential Execution Tips
• Epilogue: Keeping Strategy Central to Your Success
• Acknowledgments
• Notes
• About the Author