When developing a strategy, it is important to recognize the difference between strategic and operational decisions.
Strategy is the choice of how and where to compete. Strategy determines what business the organization is in, its target market, identifies its particular strengths and how it is differentiated from its competitors. Strategic decisions establish the direction in which the organization will travel. Conversely, operational decisions determine how the organization will get there.
Operational tasks include market research, product and service development, pricing, promotion and sales, budgeting, staffing, setting key performance indicators, and measurement of results. These are functional specialties. Usually there is someone in the organization with the right expertise to get results in these areas, or it is possible to bring in an expert on a short-term contract who knows what needs to be done. Operational decisions are informed by "best practices". You look at what other people have done, and either copy them or learn from their mistakes.
When it comes to developing a new strategy, however, there is no "best practice". By definition, you are pioneering. Strategy requires reconceptualizing the organization's purpose, conceiving a new vision, to redefining your target market(s), recognizing strengths that were not previously identified, and segmenting your customer base in a new way, to identify new sources of competitive advantage. This requires challenging all your assumptions about the correctness of what is, and focusing instead on what could be.
Another distinction could be this. An operational issue is one where someone knows the answer. The expertise is available, either within the organization, or externally. A strategic issue is one where no one knows the answer, because a new path is being forged. No one really knows how your business should compete. You make a choice and then build an implementation plan based on this choice.
You don't get competitive advantage by copying someone else's strategy. Your strategy should be unique, based on the current environment, the needs of your chosen target market and the organization's unique strengths.
When you are building a strategy, the question "What are other people doing?" should sound alarm bells. Marketing guru Seth Godin says "By the time there is a case study in your specific industry, it's going to be way too late for you to catch up." Competitive advantage goes to those who choose a unique path and commit to its success.
The first step in formulating a new strategy is to accept that no one knows the answer. The complexity of this task should never be underestimated. Everyone involved needs to be willing to suspend judgment, explore the questions and resist the temptation to supply the "answers" from their own expert point of view.
Showing posts with label strategy. Show all posts
Showing posts with label strategy. Show all posts
Wednesday, July 6, 2011
Tuesday, February 22, 2011
Don't implement the wrong strategy
The first two ingredients in a business vision were “imagination” and “worldview”.
The third one is “possibility thinking”.
This is about your willingness to move beyond the first acceptable idea, to generate multiple ideas from which you can select and combine. Many people feel uncomfortable and impatient with this process. They latch on to the first viable suggestion, however superficial and unoriginal, so they can move straight to implementation, and feel as though they are doing something. However, implementing the wrong business strategy can be a disaster.
Creating a unique strategy, one that capitalizes on the organization’s strengths and caters to the needs of its customers, whilst also taking into account what is happening in the world around you, is not easy or quick. It requires the input of many and varied suggestions. Most will eventually be “redundant” and “surplus to requirements”, but they form an essential part of the process.
Much has been written about the importance of not shooting other people’s ideas down. Just as important is not shooting down your own ideas. Most ideas are never voiced at all. It takes time and confidence for a thought to develop to the point where it can be put forward as a suggestion. Mostly, we have “glimmers” which pass through our minds but never really form into an idea. Only if we let these glimmers grow can we exercise our originality and create a truly new strategy.
Recently I took part in a five-day Cabaret Summer School. During the week each of us was required to create an original solo mini-cabaret show of 10-15 minutes, consisting of three songs and some patter to connect them. At the end of the week all eleven of us performed our segments to a paying audience in a show held at a beautiful theatre, with professional sound, lighting and grand piano accompaniment. It was quite a challenge. At start of the week, most of us had no idea what our show would be about. The best piece of advice came on Day 1: “Most ideas get rejected before they have time to develop. Give your ideas time to grow”. This gave everyone permission to come up with novel ideas, and to experiment with all sorts of things without worrying too much about whether or not the material would eventually be used.
Obviously there are differences between the creative arts and the corporate world. But both require possibility thinking. You don’t get competitive advantage by copying what your competitors have done. To create a new strategy, we need to overcome the natural tendency to self-edit, and allow the glimmers to grow.
Possibility thinking stops you getting stuck in precedent.
The third one is “possibility thinking”.
This is about your willingness to move beyond the first acceptable idea, to generate multiple ideas from which you can select and combine. Many people feel uncomfortable and impatient with this process. They latch on to the first viable suggestion, however superficial and unoriginal, so they can move straight to implementation, and feel as though they are doing something. However, implementing the wrong business strategy can be a disaster.
Creating a unique strategy, one that capitalizes on the organization’s strengths and caters to the needs of its customers, whilst also taking into account what is happening in the world around you, is not easy or quick. It requires the input of many and varied suggestions. Most will eventually be “redundant” and “surplus to requirements”, but they form an essential part of the process.
Much has been written about the importance of not shooting other people’s ideas down. Just as important is not shooting down your own ideas. Most ideas are never voiced at all. It takes time and confidence for a thought to develop to the point where it can be put forward as a suggestion. Mostly, we have “glimmers” which pass through our minds but never really form into an idea. Only if we let these glimmers grow can we exercise our originality and create a truly new strategy.
Recently I took part in a five-day Cabaret Summer School. During the week each of us was required to create an original solo mini-cabaret show of 10-15 minutes, consisting of three songs and some patter to connect them. At the end of the week all eleven of us performed our segments to a paying audience in a show held at a beautiful theatre, with professional sound, lighting and grand piano accompaniment. It was quite a challenge. At start of the week, most of us had no idea what our show would be about. The best piece of advice came on Day 1: “Most ideas get rejected before they have time to develop. Give your ideas time to grow”. This gave everyone permission to come up with novel ideas, and to experiment with all sorts of things without worrying too much about whether or not the material would eventually be used.
Obviously there are differences between the creative arts and the corporate world. But both require possibility thinking. You don’t get competitive advantage by copying what your competitors have done. To create a new strategy, we need to overcome the natural tendency to self-edit, and allow the glimmers to grow.
Possibility thinking stops you getting stuck in precedent.
Wednesday, December 1, 2010
Thinking in Pictures
Business strategy needs a vision, and the first ingredient is imagination.
A mental picture of a desired future situation motivates people much more than does a carefully worded vision statement. If people can “see” what they are trying to achieve, it brings the business vision alive for them.
Imagination (sometimes called “the mind’s eye”) is “the ability to form images and ideas in the mind, especially of things never seen or experienced directly”.
To come up with an aspirational vision for the business, you need to project yourself into the future, take a quantum leap, and see beyond the incremental options of extending, adding-onto or tweaking what already exists.
Some people are more imaginative than others, probably because they permit themselves to be. Some people see themselves as “unimaginative”. Sometimes imagination is denigrated using phrases such as “that’s fanciful”, “completely unrealistic”, “you’re dreaming”, and “she has an overactive imagination”. Sharing an imagined new future requires courage, and the knowledge that there is likely to be some resistance.
There are three skills needed here:
1. Being able to visualize an alternative future, and
2. Being able to describe to others what you see, and
3. Being able to listen to what others are imagining, whilst suspending judgment.
Even thinking about a future very different from the present can feel extremely audacious. Have you ever thought fleetingly about some possibility and then thought better of it, not even permitting yourself to develop the idea, let alone voice it to others?
To create a mental picture of your new future, speak to yourself as if you are already achieving it, e.g. “We are…” “We have…” rather than “We will…” or “We want to…”
Marketing pioneer Theodore Levitt said “Nothing drives progress like the imagination. The idea precedes the deed”. Let your imagination go to work for you.
Without imagination, you’re stuck in precedent.
A mental picture of a desired future situation motivates people much more than does a carefully worded vision statement. If people can “see” what they are trying to achieve, it brings the business vision alive for them.
Imagination (sometimes called “the mind’s eye”) is “the ability to form images and ideas in the mind, especially of things never seen or experienced directly”.
To come up with an aspirational vision for the business, you need to project yourself into the future, take a quantum leap, and see beyond the incremental options of extending, adding-onto or tweaking what already exists.
Some people are more imaginative than others, probably because they permit themselves to be. Some people see themselves as “unimaginative”. Sometimes imagination is denigrated using phrases such as “that’s fanciful”, “completely unrealistic”, “you’re dreaming”, and “she has an overactive imagination”. Sharing an imagined new future requires courage, and the knowledge that there is likely to be some resistance.
There are three skills needed here:
1. Being able to visualize an alternative future, and
2. Being able to describe to others what you see, and
3. Being able to listen to what others are imagining, whilst suspending judgment.
Even thinking about a future very different from the present can feel extremely audacious. Have you ever thought fleetingly about some possibility and then thought better of it, not even permitting yourself to develop the idea, let alone voice it to others?
To create a mental picture of your new future, speak to yourself as if you are already achieving it, e.g. “We are…” “We have…” rather than “We will…” or “We want to…”
Marketing pioneer Theodore Levitt said “Nothing drives progress like the imagination. The idea precedes the deed”. Let your imagination go to work for you.
Without imagination, you’re stuck in precedent.
Thursday, November 18, 2010
Vision - Strategy's Secret Sauce
Most strategic planning starts with a discussion of "What's your vision?" and that's the first place where people get stuck. Everyone gets frustrated with trying to "wordsmith" the perfect vision statement. I prefer to think of a business strategy having a "built-in" vision. I find that a vision tends to crystallize during the strategy discussion.
Why is vision important?
Strategy needs vision to give it life. Without vision you have no direction, and are stuck doing what you've always done. Without direction, you have no clarity about where you want to go and what you want your business to be.
Vision gives you focus. Without an understanding of your vision, your staff have no clarity about the organization's purpose or what they should be doing to achieve it. That's demotivating. Without a unified sense of purpose, performance suffers. There is a wastage and leakage of energy, rather than a sense of "pulling together".
Ambitious and energetic people like working in an organization that has a clear sense of direction. If the business seems to be drifting, they are likely to look elsewhere for a position where their contribution can have more impact.
I'm sure you've heard all this before.
It's very easy to say "We need a vision". So why is it so hard to have one? To have a vision, you need to be able to imagine something beyond the current reality; something you haven't seen before. It should be aspirational, rather than a statement of the current situation. A vision is not just an incremental step. Your vision might not currently be possible, but could be achievable over a given time-frame. It's important to have a unique pathway in mind.
To have a vision, you have to allow yourself to imagine something that doesn't presently exist. Author Jonathan Swift said "Vision is the art of seeing the invisible".
It's so nebulous, but so important.
Why is vision important?
Strategy needs vision to give it life. Without vision you have no direction, and are stuck doing what you've always done. Without direction, you have no clarity about where you want to go and what you want your business to be.
Vision gives you focus. Without an understanding of your vision, your staff have no clarity about the organization's purpose or what they should be doing to achieve it. That's demotivating. Without a unified sense of purpose, performance suffers. There is a wastage and leakage of energy, rather than a sense of "pulling together".
Ambitious and energetic people like working in an organization that has a clear sense of direction. If the business seems to be drifting, they are likely to look elsewhere for a position where their contribution can have more impact.
I'm sure you've heard all this before.
It's very easy to say "We need a vision". So why is it so hard to have one? To have a vision, you need to be able to imagine something beyond the current reality; something you haven't seen before. It should be aspirational, rather than a statement of the current situation. A vision is not just an incremental step. Your vision might not currently be possible, but could be achievable over a given time-frame. It's important to have a unique pathway in mind.
To have a vision, you have to allow yourself to imagine something that doesn't presently exist. Author Jonathan Swift said "Vision is the art of seeing the invisible".
It's so nebulous, but so important.
Sunday, November 7, 2010
Use what you've got, to get what you want!
Business strategy is your plan for achieving competitive advantage. It's your choice of how and where to compete.
Your business strategy is different from your marketing strategy (your plan for communicating what you offer to customers or clients).
Your business strategy sets the agenda for all your business activities. It establishes criteria for all your business decisions. And if you're going to innovate, it should be in pursuance of the business strategy.
Your business strategy should be unique. How do you get innovative with your business strategy?
Competitive advantage is achieved through:
your strategic assets and
how you choose to use them.
The equation is: What you have + how you use it = your competitive advantage.
In other words, "Use what you've got, to get what you want".
To get innovative with your strategy, get creative with both parts of the equation. Think more deeply about your strategic assets (these are usually intangible things) and reconceptualise the way you view them. Then consider how these can best be applied in ways that your customers or clients value.
Sounds easy? The hard part is to see beyond the current reality and to forge a unique path, rather than copying what others have done. What's required is vision, the art of seeing the invisible.
More on this next time.
Your business strategy is different from your marketing strategy (your plan for communicating what you offer to customers or clients).
Your business strategy sets the agenda for all your business activities. It establishes criteria for all your business decisions. And if you're going to innovate, it should be in pursuance of the business strategy.
Your business strategy should be unique. How do you get innovative with your business strategy?
Competitive advantage is achieved through:
your strategic assets and
how you choose to use them.
The equation is: What you have + how you use it = your competitive advantage.
In other words, "Use what you've got, to get what you want".
To get innovative with your strategy, get creative with both parts of the equation. Think more deeply about your strategic assets (these are usually intangible things) and reconceptualise the way you view them. Then consider how these can best be applied in ways that your customers or clients value.
Sounds easy? The hard part is to see beyond the current reality and to forge a unique path, rather than copying what others have done. What's required is vision, the art of seeing the invisible.
More on this next time.
Wednesday, July 29, 2009
The Innovation Paradox
Last week I took part in an industry panel to hear presentations by University students and provide them with feedback. These students had taken part in a program of impressive and challenging international activities. For example, they had studied overseas, done humanitarian work, attended conferences and worked with visiting international students.
This was their opportunity to “sell themselves”; a chance to articulate what they had gained from the program and how their experiences set them apart from other graduates.
The students all spoke with great enthusiasm and clearly were grateful for the opportunities that had been made available to them. But they struggled to describe how they themselves had been improved; how their experiences differentiated them. Their presentations focused on selling the program, rather than on selling themselves.
Also last week, I worked with an organisation seeking a new business strategy. The management team struggled to articulate what was different and special about their firm, saying “We are quite good at most things” – not exactly a basis for differentiation! But through my relentless questioning, I discovered that they did have something unique with huge potential; something they had never thought about leveraging.
How can you capitalise on your uniqueness if you don’t even know what it is?
The innovation paradox is that to innovate you have to stand out, but many people would prefer to blend in.
Why is this? Partly, it’s being unable to see what you’ve got that’s special and valuable, and partly a feeling of discomfort around what feels like “boasting”, “bragging”, “blowing your own trumpet”, “big-noting yourself” or “singing your own praises”. It is fashionable to speak self-deprecatingly about your abilities. One of the students even told us “I am sooooo untalented!”
You don’t have to be narcissistic and flaunt yourself. But if you’re not aware of what you’ve got, if you’ve never even thought about it, you can’t use it. You can’t sell yourself without the right product knowledge.
This was their opportunity to “sell themselves”; a chance to articulate what they had gained from the program and how their experiences set them apart from other graduates.
The students all spoke with great enthusiasm and clearly were grateful for the opportunities that had been made available to them. But they struggled to describe how they themselves had been improved; how their experiences differentiated them. Their presentations focused on selling the program, rather than on selling themselves.
Also last week, I worked with an organisation seeking a new business strategy. The management team struggled to articulate what was different and special about their firm, saying “We are quite good at most things” – not exactly a basis for differentiation! But through my relentless questioning, I discovered that they did have something unique with huge potential; something they had never thought about leveraging.
How can you capitalise on your uniqueness if you don’t even know what it is?
The innovation paradox is that to innovate you have to stand out, but many people would prefer to blend in.
Why is this? Partly, it’s being unable to see what you’ve got that’s special and valuable, and partly a feeling of discomfort around what feels like “boasting”, “bragging”, “blowing your own trumpet”, “big-noting yourself” or “singing your own praises”. It is fashionable to speak self-deprecatingly about your abilities. One of the students even told us “I am sooooo untalented!”
You don’t have to be narcissistic and flaunt yourself. But if you’re not aware of what you’ve got, if you’ve never even thought about it, you can’t use it. You can’t sell yourself without the right product knowledge.
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