For me, strategy is quite simple – it’s about doing different things to your rivals to create competitive advantage. It’s also about choosing what not to do. In choosing what you are going to do differently from your rivals, you need to choose things that your customers want and that they value – otherwise your strategy will be impotent. Sounds obvious I know, but so many companies get that wrong.
The choices you make will ultimately determine how your company is positioned in the market, which customers or markets to attack, and which products or service to provide. It may involve some tough decisions to discontinue certain activities for the right reasons – many companies have products which are dogs or income streams which don’t materially contribute, yet consume valuable resource. Many companies have customers of that ilk – jettison them!
It’s important to involve your senior management team in strategy definition and it’s generally beneficial to take yourself away for a day or two to discuss and refine it in detail. Tools like SWOT and PESTLE analysis have a part to play in the process and it will help to be equipped with detailed information on your key rivals’ strategy and positioning.
You should aim to define a strategy that is difficult for others to imitate. Every move that you make in the market is likely to provoke a response, so when defining your strategy, always put yourselves in the shoes of your rivals. Ultimately, the key to defining a successful strategy comes down to your people and your internal business processes, so give these the utmost consideration.
Once you have a clear strategy, the battle really starts. Most strategies fail due to poor or inconsistent execution, and that’s a crying shame.
To execute effectively you must give your top team clear ownership of a plan of actions to implement and SMART objectives to achieve. I’ve found the “balanced scorecard” approach useful here: it’s a management tool which involves measuring outputs by four different yardsticks (customer-related, financial, internal business processes, and learning and growth).
You may also want to arrange these within a “quarterly priorities management” framework: three months tends to be a good interval to review what’s going on. Be prepared to make small adjustments to your strategy as market conditions develop and as your competitors react, but avoid at all costs making wholesale reactive changes as this can generally be very dangerous.
With so much mystique around strategy it’s important to give your organisation absolute clarity on how you will create your own competitive advantage to outperform your rivals. Keep it simple and focus on executing the heck out of it, and then execute the heck out of it…