As communities around the world begin to emerge from the COVID-19 restrictions and life returns to what some are calling ‘the new normal’, it is vital that leadership teams ‘audit’ their current business strategy and all the assumptions that underpin it. Strategy is often built upon a host of paradigms, frameworks, history and assumptions which reflect what leadership know about their market. This learnt knowledge often goes unquestioned, but post COVID-19 will it still be relevant?
Active Knowledge Question:
What has changed in your chosen marketplace and your customers’ needs post COVID-19?
One of the strongest barriers to success in business, and especially in successful businesses, are the things that leaders know to be true based upon their experience.
These ‘known-truths’ can take many forms and are embedded in many ways, including mindsets, beliefs, managerial frameworks, conventional wisdom, paradigms, assumptions, experience, and can extend into bias, self-interest, and bureaucracy. They all tend to have one effect, and that is to lock a business onto a given path or way doing things as these ‘known-truths’ are not, and in some cases cannot be questioned.
Of course, when it comes to crafting strategy, there should be no ‘known-truths’ but rather an open process of questioning, testing and challenging everything we think we know. And through such open debate, seed and permit an exploration of how greater value may be delivered into the needs of our customers, thereby outcompeting all others.
Every strategy process should allow for ‘everything’ to be thrown up into the air so that it may be rearranged to underpin greater competitiveness; however, few strategy processes allow such deconstruction and reintegration.
Looking briefly at some of the more common supporters of ‘known-truths’:
- Paradigms are ways of thinking that are not necessarily incorrect but can readily block new possibilities and opportunities.
- Bureaucracy encompasses all the processes, regulations and layers of authority that exist in a business. Again, not necessarily bad, but in many instances, they do little to support customer focus, customer value, efficiency and effectiveness of delivery, and individual contribution. They tend to exist to uphold compliance.
- Self-interest being a me-first attitude, places the ‘self’ above others in an unfair manner that weakens the business motive to compete.
These ‘known-truths’ become self-imposed impediments that slow down, distract, or stop a business from competing to its fullest ability. They are not external challenges or obstacles, but instead they are internal of a business’s own making and often go unnoticed.
In a market in which an event like COVID-19 may have fundamentally shifted many ‘known-truths’ in any business, leaders must be proactively question everything they and the business have believed to be true about their customers, their customers’ needs, the way the market operates and how they as a business compete. It’s not about identifying new opportunities; although this may be one outcome, its far more fundamental. It’s ticking off everything in the business to see what may have changed and how the business may need to respond.
Audit Your Strategy
In a recent article, Seven Steps In Crafting An Effective Business Strategy, I outlined the seven areas that you should consider in crafting your business strategy. These seven areas provide a framework that you may use to audit your existing strategy.
Look at each of these areas and ask what may have changed and how should we respond. Such a review will provide a quick snapshot of your changing competitive landscape and allow you to focus on key areas of change and opportunity.
Bear in mind that strategy is never just ‘what’ we are planning to do. Strategy commences with ‘who’ are we and ‘why’ are we here? And leads into a discussion of, so ‘how’ do we achieve our purpose in a competitive manner? From this how, the ‘what’ can then be considered. When you review your strategy, all of these aspects must be considered.
An alternate approach to auditing your strategy is to divide your review into two principal parts – Our Customers and Ourselves. Here are the types of issues that you may consider under each:
Part One: Our Customers
- The Customer
Who are your customers today (pre-COVID-19)? Draw a persona of your core customer? Looking at that persona, how may have COVID-19 impacted them and their lives. Recast that persona and list out how your customer’s life may have changed? What impact may these changes have on your ‘relationship’ with that customer? And by relationship, consider all dimensions of your connection with them.
- Their Needs
What are the customer needs that your business meets through its products or services? How may have those needs changed? What impact does this have on the needs that you historically met? Are there needs that no longer exist, have lessened, been replaced and are there new needs arising?
- The Value They Gain
We compete around the value we are able to deliver to a customer’s needs and, more specifically, the reason they choose to buy from us. This ‘reason’ is a better expression of the value we deliver and the greater understanding we have of this value, the better we are able to compete. In this context, state what value do your customers receive from you? How might this value be impacted by COVID-19 and all that came with Government’s response to it? Has the value your deliver increased, decreased or not changed?
- Agents Impacting
In the marketplace that you have chosen to compete in, there will exist of range of agents that impact and influence that market. These are forward trending (lead) indicators, and hopefully, you have identified these through your strategic planning and monitor their movement and impact. Examples include such items as employment, interest rates, technology, regulations, consumer confidence, societal norms etc. Again, ask the question how have these indicators shifted, are they still relevant, and are there others that we should now include? And from this revised list of agents, what is the trending impact, and what does it mean?
Part Two: Ourselves
- Your Positioning
In competing in your chosen marketplace, you will have positioned your business to leverage its relevant strengths so as to be able to outcompete all others by delivering greater value to customer needs. Are your strengths still present and relevant? Is this positioning still going to deliver you success? And consider how your competitors have shifted their positioning in response to COVID-19.
- Your People
Your competitive core strength rests in the combined talent and effort of all the people who work within and with your business. COVID-19 will have dramatically impacted this core competitiveness in many varied ways. Your consideration should not be restricted to organisational matters such as the impact of people now working remotely, but also on their lives as individuals. For most people, areas such as wellbeing (physical, emotional, mental) for their families and themselves, their sense of safety, their connectedness, their plans for their future, their financial security, and many aspects of their lives will have been impacted. The challenge will be to ascertain how COVID-19 may have shifted your people’s future participation and contribution in your business. And is not about their willingness but more about their possibly reduced capacity.
- Your Organisation
The way in which your organisation functions will have changed. The question becomes one of what will be the most appropriate organisational design for your business to deliver value to your customers, given all of the above? There are many aspects to organisational design but at its core is competitiveness and the ability to deliver customer value. Always bear in mind that profit is an outcome, and competitiveness is the catalyst of that outcome.
Strategy is always continuous and emergent, and whatever plans have been laid must always adapt themselves to the reality of the market in which they seek to succeed. COVID-19 has shaken our marketplaces, and as communities begin to step out of these restrictions, it is vital that leaders and business have invested the energy and time in adapting and being adaptable. And the starting point is to ask, what has changed that will lead us to also change, and the best forum for this discussion is in the context of business strategy.
An entirely new level of performance.
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All the best in the success of your business,