What Makes for a Good Year? How Wine Corks Led Me to Thoughts on Strategic Capabilities.

On New Year’s Day I finally I put together a wine corkboard kit that I had received as a gift over ten years ago. This kit, along with a bag of wine corks that I had collected over the years, was up on top of a bookshelf in my office gathering dust. For each of the past several years, I would proclaim to my wife that I was going to finally put it together, but it never happened – until now.

Going through all the corks was a fun trip down memory lane – I remembered living in Silicon Valley, taking numerous trips to wine country, and learning about different wines. As I assembled the corkboard, I remembered drinking specific wines with specific people on specific occasions — so it has become much more than a corkboard, but a way to instantly remember some great times with great people. I remember drinking the 1991 Jordan Cab with my brother — but not until 2002 after I had moved from California to North Carolina.

As I examined the vintage dates on many of the corks, I thought about how people often describe a wine’s quality by the year – saying “such and such was a very good year”.

What makes for a good year in wine? And what lessons does it hold for us as we start 2010?

A good year in wine depends on three factors:

• Conditions beyond our control – like the weather.

• Decisions we make within our control – when to pull the grapes from the vines, based on a skilled determination of how much sugar they have developed, and how to blend specific grapes to craft the best possible wine for that year. In other words, the skill of the grower and winemaker

• Decisions we made and actions we took many years prior – beginning with the decision to acquire land and plant a vineyard, deciding where to plant and what type of grapes to plant, and deciding to hire talented people to help us. All of these decisions and actions helped to create the options we have today.

The goodness of the 1991 Jordan Cab was determined not only by the weather that year and the skill of the winemaker, but by decisions made many, many years earlier by the Jordan family – to acquire and develop both land and skills – that would not bear fruit (literally!) for many years.

These previous decisions create the strategic capabilities that we have today. In other words, the assets and skills that we acquire in the past enable us to generate results in the present.

So what will make 2010 a great year for us?

• Conditions beyond our control – like the “economy.”

• Decisions we make within our control – executing effectively on our sales, marketing, and operational plans and making the most of the opportunities we generate.

• Decisions we made in previous years to acquire skills, assets, and capabilities. The list of possibilities is highly variable; for me, personally, it includes developing skills as a strategist, executive coach, and speaker – and also in developing industry knowledge and a network of relationships. For your organization, it may include developing a consultative or solutions-sales capability, acquiring specific technologies, developing access to markets, or hiring key talent.

The bad news (or the good news) is that our profitability in 2010 is to some extent already determined by decisions and actions we took in prior years. If I want a bottle of great wine right now – well, either I made the investment years ago to purchase it , or I’m going to pay a huge premium now to acquire something that rare.

The same holds true for any business. It is extremely difficult to instantly transform the profitability of our businesses overnight – since our current strategic position reflects many previous decisions and behaviors. It takes time to establish strategic capabilities in the marketplace. It takes time to reposition a company. It takes time to cultivate relationships with the best customers. It takes time to learn new skills and integrate them so that they are part of your being. If you don’t have critical capabilities when you need them, you can find yourself in a very tough competitive position. Like the rare bottle of fine wine, it is extremely expensive to acquire these capabilities instantly – you will pay a huge premium for talent or assets that you do not yet have.

So let’s flip this around – what can we do to truly make 2010 a great year (and have that great bottle of wine, should we choose, waiting for us when it’s ready some years from now)?

• Conditions beyond our control – the “economy” – not much we can do

• Decisions we make within our control – executing effectively – a lot of room for us ac

• Make decisions and take actions today and in 2010 to build capabilities for the future!

Creating a bigger future is entirely up to each of us. Yet every day of waiting not only prolongs the getting started – but it compounds upon itself as others are moving ahead while you are standing still.

Whether you are leading an organization or leading yourself, ask these questions

• How do I let go of (and stop blaming or complaining about) factors beyond my/our control

• What do I need to do to execute effectively in 2010? How do I make the most of the strategic capabilities that I have now?

• What strategic capabilities will I develop or acquire in 2010: what will I know how to do at the end of this year that I don’t know how to do now — and how will that knowledge (capability) best position me for the future?

Let me know what answers you come up with. You can comment here.