The 3 Pillars of Formulating Winning Strategies

With increasing pressure from the competition, the customers as well as shareholders, many managers responded with “We MUST implement a better strategy”.

However, when asked what exactly is being done with the new strategy, the reply is usually along the lines of “we plan to launch a new product”, or “we plan to have a new sales/ customer initiative”.  Strategy seems to be related with some kind of planning.

More importantly, most new sales strategies tend NOT to deliver the expected results.  Somehow, the managers either seem to miss some important ingredients, or don’t know how to mix the right ingredients with the right processes.

In any case, here’s a simple yet practical guide to formulating winning strategies.  All you have to do is to master these 3 key building blocks:

• The Goal, and how to reach it;
• The resources required; and
• Responding to customers’ and competitors’ responses

The Goal, and How to Reach It

Whether you are hatching a plan or formulating a strategy, it all starts with a Goal, i.e. what do you want to achieve eventually.  Before we even look at the steps on how to achieve this goal, here are some questions you may want to ask yourself first:

• Why you MUST reach this Goal?  What happens if you don’t?
• Does your team share your sense of urgency to reach this Goal, or do they have other ideas?
• Do you and your team BELIEVE that you can achieve the Goal that you (or very likely, your boss) set?

Interestingly, most managers blame the lack of motivation of their staff and team members when goals are not met.  However, if team members don’t resonate with these goals, or in these days, they feel that achieving such goals will only serve to inflate the bosses’ pockets and not theirs, they won’t want to commit themselves to help you achieve those goals. 

In short, if your team feel that it is your goal, and NOT theirs, they won’t make it work for you.  This is not a New Age gimmick to motivate younger Generation-Y team members.  Rather, making your goal feel as if it’s your team’s dates back 2,500 years ago in China when military strategist Sun Tzu mentioned the need to arouse your people so that they identify with your Goals.  He called it the Way; in today’s terminology, we call it the Goal or the Vision. 

Having asked the question “Why this Goal”, the next question will be “How are we going to achieve it”.  In a nutshell this involves:

• How do we get there?  What are the steps involved to reach our goals?
• What other information do we need?
• How do you monitor the progress?

Some people set strategies and Goals so far out in the future that they could not answer the above questions.  Without providing the answers, such “goals” are at best “hopes”, and such “strategies” are more like general directions.  It will be difficult to get your desired results as such.  But if you do, you empower your team to take the appropriate actions.

The Resources Required 

Having passion and a drive to succeed is not enough to achieve your goals.  You will also need to have the right resources as well. 

In many cases, companies whose strategies fall short of expectations make one of the following mistakes:

• Under allocation of resources to support a goal; and
• Allocating too much of the wrong resources to reach the goal

The former tends to occur with companies with tighter budgets.  Some typical incidents could be when a company is launching a new product, it tries to save costs by reducing the manpower in the R&D department, or cutting the marketing budgets.  At times, when expanding into overseas territories, some companies even hire commission-only agents to develop those territories.

The result of such under-allocation of resources is simply there isn’t enough coverage in the market to get the customers to know you, let alone getting a significant number of them to buy from you.

On the other hand, companies that are cash-rich tends to waste their cash by spending them on resources that are not needed.  Typical examples are the Dot.Coms in the late-90’s and early 2000, where I a bid to generate “eye-balls”, most Dot.Coms simply advertise indiscriminately.

 The result is that the Dot.Coms wasted the cash which could have used in improving their product offering to attract steady revenue streams instead.

The demise of Ofo seems to be similar, as it over extended itself, and did not have enough revenue to replenish all the cash that it is consistently burning.

Is cash or funding the only resources to allocate in your strategy?  Absolutely not.  Here are some other resources that you may want to commit to make your strategy a success:

• The right people with the right skills and attitudes;
• Machinery and equipment;
• Materials and ingredients;
• Marketing network, channels and connections

Ultimately, no company will have endless resources to allocate or commit to a strategy. You may want to prioritise what needs to be one first, and allocate your limited resources accordingly.  Failing to plan, is planning to fail.

Responding to Customers’ and Competitors’ Responses

When you take action, there will be either positive and negative responses from customers and competitors.  Here’s the difference between formulating a plan and a strategy: when formulating a strategy, you will have to anticipate what will be the likely responses from customers and competitors.

If you get positive customer responses, expect competitors to exert their pressure, usually by providing similar products and services.  That was something Netscape did not anticipate when it was the leading web browser in the mid-nineties.  It didn’t take long for late-comer Microsoft to literally drive Netscape out of business with the Internet Explorer.

Even when a new product or service fails, competitors can also learn and improvise from your failures.  Apple Computer (now Apple Inc.) launched one of the earliest and most ambitious Personal Digital Assistant (PDAs), the Newton, in the late 80’s, but it flopped.  In 1996, 2 years before Apple decided to cease development for the Newton, Palm Computing launched the Palm Pilot, and it was a great success.

In the same vein, both Nokia and Blackberry did not foresee and respond well to the rise of touch screen phones, and as a result, paid dearly for that.

Whichever the case, you will be imperilling your plans if you don’t take into consideration of competitive pressure.  Here are some tips on how you can counter-respond to the responses of your competitors and customers:

• Be creative and surprise both customers and competitors by doing the unexpected (出奇制胜);
• Think 2 products ahead, so that when your competitors start providing the same products, you can introduce the upgrades or the newer and better versions;
• Provide better quality of selling and create value to your customers.  While it is very easy to imitate the hardware, it is a lot more difficult for competitors to emulate how you serve and add value to your customers.

As illustrated above, you will need more than broad directions to formulate your strategies.  You will need to gain insights about you customers, competitors, industry trends and even the mind-sets of your team to make your strategies deliver your expected results

c.j. Ng is the world-class sales, leadership and experiential learning consultant who have helped international companies achieve quantum improvements in business performance in Asia. He also happens to be a Certified Scrum Master and helps to coach Agile Sales Teams as well.

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