Strategy is simply how you intend to compete, but there is nothing simple today about competing effectively. That’s why the strategic planning process is one of the most important tools leadership has available to them to outcompete everyone else in their market.
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Strategic planning is grossly underutilised by leadership and few appreciate the overwhelming strength that a well-crafted strategy can bring to a business. For many business leaders, strategy lies in command and control, but nothing could be further from the truth.
What Is Strategy?
Your strategy is simply how you intend to compete. But compete for what? Many would say ‘for profit’, and they would be wrong. Others would say ‘for market share’, and they would also be wrong.
Today, you compete around customer value and delivering greater value than anyone else. Profit, market share, and many other metrics chased by businesses are all outcomes of the right strategy. But they are not a direct outcome – they are an end result. A result of the ability to truly compete.
Your strategy is what you need to do as a business to be able to outcompete others in your market and, thereby, deliver greater customer value. The result of which is more customers, more sales, greater profit, and everything else that flows from being successful.
And the ability to outcompete does not come from some clever strategy but rather from the ‘ability’. It has long been thought that strategic planning is about formulating that clever strategy and then implementing it. Rather, today we understand that strategy is more about creating, building and sustaining the ‘ability’ to compete.
And from this ability, a business will be able to see and deliver the next level of customer value that will allow them to win.
Strategy is firstly about ability and from this ability will come the wins.
What Goals Should You Seek?
Today, business success lies in delivering more customer value than anyone else. And that means engagement at the coalface, a mustering of workforce passion, and an empathy for customer need that allows you to see that need before it even exists.
In addition, technology has and is continuing to dismantle barriers to create an open global marketplace for all players. Resourcing and workforce capabilities continue to be more ‘open source’ and incumbency can, at many times, be a greater disadvantage than advantage.
Put the challenges of customer value and technology together, and your goal is to be able to develop your strategy free of paradigms, politics, self-interest, and, probably most importantly, the past.
The goal of your strategy is to be able to see that next level of value before anyone else has even woken up that value is about to shift.
Your business creates the shift and always leads the market while others play catch up.
Who Should Be In The Room?
There are two levels of strategic planning and you will need to decide who should and needs to participate in each level. It’s important that you create the ‘space’ to permit each to occur.
It serves no purpose creating a strategy your business is not capable of delivering or which does not lift its strengths to the surface. The first level of strategic planning is, therefore, seeing tomorrow’s customer need and value. And deciding how you will position your offering to lift your strengths to the forefront so you can outcompete others in your market. This work is hands-on and requires coalface experience blended with creative thinking.
The second level is the approval of the plan and that usually resides at board level. And sometimes at a board level, the right capability may not exist to craft the competitive strategy. But the skill will exist to independently assess the strategy as presented.
The two-tier approach can yield great results, but politics may play a part in how you structure your planning and approval sessions. You want those people in the room that are going to allow and support you in creating the dynamics set out below.
Creating The Ideal Dynamics
Strategy is a process of exploration, fact-finding, judgement, risk-taking, creativity and value creation. And, for this reason, all self-interest and egos must be left at the door before commencing the process.
You want a dynamic in the room in which you:
- Challenge and extend the way your team thinks about the customer, need, and your business’s capability to compete.
- Create insights and understanding, not only about the above, but how the future may evolve to deliver more value.
- Build confidence and knowledge that the course of action you are going to pursue is correct.
You want everyone involved leaning into the conversation and not sitting back. You want them thinking, analysing, arguing, understanding, discovering, agreeing and deciding to act. Tools such as ‘Lego Serious Play’ can be great in breaking down old stereotypes of what the strategy process is – but it can be challenging for some.
The Importance of Play
Most business leaders would consider the development of strategy as anything but play. Strategy is serious business and must be taken seriously by all those involved. But at the same time strategy has to be innovative and challenging and allow for thinking outside the box. And this is where play becomes the perfect metaphor for the way in which you should seek to develop your strategy.
Play is:
- Fully absorbing.
- Intrinsically motivated.
- Includes elements of uncertainty and surprise.
- Involves a sense of illusion and exaggeration.
But play is not frivolous and generally is quite purposeful, as it is:
- An intentional activity that seeks to engage the imagination.
- About the exploration, experimentation and testing.
- Usually based on a specific set of values and language.
Play is a perfectly natural way of adapting and developing new skills. It is a form of exploration that can prepare us for uncertainty and change and keeps us open to serendipity to new opportunities. It can also prepare us for ambiguity.
Play can be a perfect approach to crafting competitive strategies that take us out of the reach of our competitors and into the arms of our customers.
Before you commence your strategic planning process for this cycle, consider whether it is correctly designed and focused on the right outcomes.
Struggling about where to start? Then this guide will provide you with the directions: Strategy Play – Crafting Undefeatable Business Strategies.
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All the best in the success of your business,
Richard Shrapnel
