In crafting your business strategy, your focus must not only be on revenue growth and cost reductions to drive profit but must also focus on the catalysts of competitive strength. Actions driving revenue such as new products, services, customers and cost savings such as supply chain efficiencies are not the catalysts of competitiveness; they are the outcomes. Fail to focus on the real catalysts of competitiveness, and your business will falter.
Active Knowledge Question:
What comes first, winning or your ability to win, profit or the ability to outcompete all others in your market?
Classical strategy would tell us that the ability of a competitor to defeat us lies in our hands not theirs, and there is a real truth behind this statement which is important when it comes to crafting business strategy.
In a basic way, we could say that a competitor in our marketplace defeat us if they are able to win customers which we also sought. What allows them to win that customer? Well, in whatever way they achieved it, they were able to deliver greater customer value than we were able to, and yes there are a lot of moving parts in that value equation.
In defeat, the simple principle is that we allowed them to step ahead of us and deliver a value greater than we did. How we dropped that ball and allowed them to pick it up and run with it, is a question to be answered, but it does not change the fact that we allowed them to step ahead.
We could have been the one who evolved, reinvented, discovered; whatever it took to step out and leave our competitors behind, and only through these actions, will you become undefeatable.
Competitiveness is the ability of your business to deliver on what it takes to win. Winning in business is all about delivering greater customer value than anyone else. It is about adaptability and agility but, more importantly, it’s about identifying where that greater customer value lies tomorrow.
Being decisive is not about catching up; being decisive is setting the rules of the game and moving on before competitors even know the game has changed. I describe these traits as being competitively fit.
You cannot be a follower; you must craft and lead in your chosen marketplace. We allow ourselves to be defeated when we allow ourselves to be led around the market, always playing catchup.
In developing your business strategy, it will include markets and opportunities you believe you should grow into, but it must invest also in your ability to identify and action those markets and opportunities. And this capability does not lie in more data and research; it lies in the type of organisation you build.
You are seeking through your strategy to build an organisation that becomes self-forming in that through its very nature, it is always evolving, reinventing, discovering the next level of customer need and value.
Your eye in crafting your strategy is not just to outward/external growth opportunities but to the organisation’s competitive strength. And this strength lies in its competitive engine.
What is the secret of crafting undefeatable strategies? It lies in seeing strategy as a process of building from the inside out; always compounding the capability of the business to win.
With a strong competitive engine, your business will always be identifying opportunities for growth, that’s a natural outcome of a well-tuned competitive engine. The hard part is making sure that the competitive engine remains strong and is not weakened.
Strategy Play is a process for developing your business strategy whether your business is a startup or a veteran, local or global.
It consists of a series of agents to be addressed as you progress through crafting your strategy. It enables you to identify specific growth strategies while always maintaining an eye on building competitiveness. Note above the word ‘agents’; Strategy Play explores the agents that will allow you to make the right strategic decisions.
The standard Strategy Play approach consists of 39 activities across the seven key areas noted below. These activities will drive the strategic conversations that should occur as you craft your strategy.
1. Understanding History:
A strong understanding of your history as an organisation will allow you to know who you are as a business. It will also help you to get a handle on what you can do well, what you don’t do well and what limiting beliefs may exist in your organisation going forward. Start at your history and don’t move forward until you really know who you are as a business and organisation.
2. Developing Strategy:
There are three limbs to developing your strategy and positioning your business. Firstly, define and understand the boundaries of your marketplace and what impacts that market. Secondly, map the competitive landscape of that marketplace and understand who is competing in it and on what basis. Thirdly, based on your strengths, identify where you are best positioned to deliver greater customer value and how are you going to compete. Don’t play by the industry rules, reinvest/redefine them and move the goalposts so you deliver greater customer value than anyone else. In the end, you must be able to clearly articulate your strategy, what I term your ‘competitive posture’ so that everyone in your business will know how you are going to win.
3. Building The Organisation:
Recognise the type of organisation you need to create to deliver the strategy you have developed. Do not pursue a strategy that you only think you may be able to deliver. Confirm consistency with purpose. Craft your visions, confirm your culture, and most importantly design the organisation to deliver the strategy. Organisational design simply refers to how everything works together to deliver the intended customer value. It is not about hierarchy. Build an organisation principled in the attributes of the competitive engine, and it will become self-inventing, adaptable, agile, always stepping-out and has a single mind on customer value.
4. Seeing The Future:
With your competitive posture in hand, test its robustness. Look for challenging scenarios from your past, apply them and see how your competitive posture would have stood up. Would you have competed effectively? Develop scenarios for the future ranging from the expected to the outrageous and again test them against your competitive posture. What lessons are your learning, how robust is your strategy and the organisation you have built to deliver it? From these learnings, craft simple guiding principles that underpin your strategy and its delivery and instill them throughout the business.
5. Check the $:
Based on the strategy you have developed, run the numbers and see if they make sense and are acceptable and workable. Stress test them to see what impact high and low outcomes may have on your returns, cash flow, capital needs and viability. The strategy can only be delivered if the resources are available and the commitment made to fund it.
6. Mitigate Risk:
Review the strategy you have developed and clearly identify the risks associated with its delivery. Recognise them, develop mitigation strategies and decide if the risks are manageable and acceptable.
7. Making It Happen:
Developing a Goal Achievement Plan (GAP) is the step that brings your strategy from theoretical to real actions. It expresses how you will deliver the strategy and allows you to implement and monitor. Without the GAP, your strategy is meaningless; many organisations can produce great ideas, but few can deliver. Identify and set the goals necessary to bring your strategy to life, succinctly express the compelling reasons why each goal must be delivered, laying out the stepping-stones, and set the measurable outcomes sought – these are the elements of an effective GAP with no more than 3-5 goals.
Formulation and implementation in a strategy process are inseparable. You will note above that strategy is not formulated, settled and then passed over to another team to consider implementation. You cannot formulate strategy until you understand, and know, if and how it will be actioned (implemented). A strategy only formulated is, at best, a series of ideas to be explored.
Making Strategy Work
Your well-crafted and articulated strategy is only words until put into action successfully. And you may well find that the theory expressed in your words or envisaged in your mind is quite different when it ‘hits the road’ and is being delivered in the competitive marketplace.
There are two capabilities that are required to deliver strategy effectively. The first is the ability to deliver, and the second is the ability to adapt. Note that both are essential capabilities in building and sustaining great businesses and must be continually developed, reinforced and enhanced.
Delivery reflects the ability to set the right goals accurately and quickly and to deliver on them. This is no mean feat as most would recognise that the ability to get things done efficiently and effectively is a skill that most businesses lack. Most leaders do not invest in this critical skill but wonder why key projects just seem to never get delivered. Remember, the quintessential goal of strategy is to create and maintain a business that is capable of crafting and delivering on any strategy.
Adaptability is the ability to recognise changing circumstances in the marketplace. Whether they be through a greater understanding of customer needs, changing marketplace conditions or competitor behaviour, or shifting your positioning to maintain your strength of customer value. Adaptability reflects the continuous and dynamic nature of strategy, and the fact is often the strategies that work are not formulated, but are unrealised or emergent, or simply needed to move as the marketplace changed.
Of course, delivery and adaptability must be built upon the right organisational design for the competitive posture you have chosen and in sync with the competitive engine operating in your business.
In summary, you want your business to be competitively fit and tactically alive, capable of delivering on your purpose and adapting to always be in a leading and dominant market position. This is the outcome of undefeatable business strategy in play.
An entirely new level of performance.
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All the best in the success of your business,