Strategy is important
Strategy is important to businesses success for 3 reasons: (i) you we need to know where you are in the market, (ii) you need to know where your headed to take your people there and (iii) you need to know how to get there. Answering these 3 questions helps us bring our people along with us. They have a clear understanding of the destination. This is important, but is it really ‘so important’. Is there another magic bullet to focus on?
I’ve facilitated traditional strategy sessions. Take my client, a Financial Services Institution. The context for the strategy was slow growth and increased regulation. We considered the internal and external environment (SWOT and PESTLE analysis etc.). Conversations compared the Organisation to their competition. There was little or no consideration of what made them unique nor their customer needs.
Next, where did they want to be? ‘Market leader’. As market leader the discussion was how to stay there. Critical to this was taking into account new ‘substitutes’. This was taking a competitor focus again. The majority of the next sessions were spent developing the Plan (Goals, Objectives and the metrics). To the team the Plan was the most important aspect, especially the metrics. ‘What get’s measured get’s done‘.
I’m sure the experience is typical of many organisations. The problem is this. It leads to a very narrow focus. Market analysis becomes almost exclusively about our competitors. This automatically makes our strategy destination limited. It’s either staying ahead of the competition or trying to catch or match them. The next point of focus is inevitable. Developing the road map of how to stay ahead, catch or match.
Is this what strategy looks like in your organisation? If yes, I’d take a gamble and say your organisation is not experiencing much business success. How often do we look at the RoI on strategy development. If it’s as important as we believe it to be shouldn’t we be getting more from it?
A New Approach for Business Success
Should we abandon traditional Strategy? No, I’m saying we need a new approach.
I posted recently on LinkedIn an HBR Strategy article that spoke to this very issue. The article suggested a different approach to the traditional competitor focus. It spoke to Value Innovation. The destination becomes making your offering “different and irresistible”. This is far better than traditional strategy. Yet it doesn’t go far enough? Then it hit me. One line buried in the article, was the key. Existing businesses need to think like a “new entrant”.
How does a new entrant think?
Typically, new entrants don’t think strategy first. In-fact many are weak on the components or strategy that existing organisations major in, market analysis (as they’re not even in the market) and developing a ‘road map’ (often their strategy is emergent).
Successful new entrants focus first on customer-centred Vision- not competitors .
Vision is an overused word and is used inter-changeably with Mission. I define Vision as the Organisation’s ambitious dream. I define Mission as their Why or Purpose.
A compelling Vision is critical to your businesses success. It’s the oxygen that will fuel your organisation in the good and bad times. Vision is what made Apple, Microsoft and Amazon what they are today. It helps to achieve sustainable growth and longevity. Look at the visions of these companies:
- Bill Gates Vision for Microsoft was “a computer at every desk and Microsoft software in it”
- Steve Jobs Vision for Apple “… a company that turned powerful technology into tools that were easy to use, tools that would help people realize their dreams and change the world for the better”
- Jeff Bezos Vision for Amazon was “…to be earth’s most customer-centric company; to build a place where people can come to find and discover anything they might want to buy online”.
These visions are ambitious, they are ‘Big Dreams’ that lead to change beyond the walls of the organisation. Most importantly they are customer-centric. Many existing companies have forgotten their primary purpose – ‘to serve the customer’. Loyalty doesn’t exist as customer’s have choice. I disagree, Apple and others have loyal customers, actually fans. Why?
(i) they never forget to put customers at the centre of all you do and
(ii) BIG vision cannot be fulfilled in one or two business cycles.
What’s my suggested approach?
Existing companies need to go back to basics. Start first with Visioning sessions. Not Blue Ocean strategy. That’s looking at untapped markets – areas of opportunity. This is about the ‘how’. I’m talking about the ‘What’. Businesses need to remind themselves of their Purpose (serving customers) and develop a Big Dream, a Vision. Even a vision that will change the world for the better. Customers are people and we all want to be inspired!
Perhaps an old wisdom saying sums it up best:
Without a vision the people perish
Ask yourselves some key questions on – WHAT
- will my sector/Industry look like in 10-15 years time?
- role will technology play, especially A.I.?
- expectations, needs and wants will customers have?
- competencies will our organisation need to develop for the future?
I have used this approach. I can tell you, watch out – it’s not easy. Most Executives are far more comfortable with the traditional approach to strategy. The first time I said to a a client let’s go back. Let’s ‘dare to dream’ they thought I’d lost the plot. As they came along for the journey, as they literally got out of their seats something changed. As we imagined what the world would look like in 10-15 years time and what that would mean for their customers excitement, innovation and creativity began to flow; no limits. Perhaps, just maybe, this is the new magic bullet we need to add to our strategy tool kit.