The essence of strategy
Having spent the last two weeks developing, discussing, and challenging our strategy it seemed appropriate to share some observations on what strategy is and what it is not.
Let me start by saying our overall objective is to grow the company. This is a necessary starting point for the next steps as we crystallize a strategy to achieve this aim.
- For us, the process begins with taking a fresh look at the market we are in. This takes the form of researching the total size of our space, how is it segmented, and where we are perceived to be (using analyst and other external research perspectives). We want to know if the size of the 'cake' is growing or shrinking, what external factors may influence its attractiveness, and where the next opportunities may lie. The outcome of this exercise is to form a view on how 'fertile ground may be' for growth. It's tough to grow a plant in a drought - but there are ways to overcome challenges which are considerations that must feed into any strategy.
- The next stage is to have a renewed understanding of our competitors. This knowledge comes from many sources but the process of re-visiting this topic forces our team to update old assumptions and bring together multiple analysis, particularly: Who are our competitors (this changes over time), What is their size, Are they growing or shrinking?, Why are they growing/shrinking? What are their objectives and how will these impact ours?
- It is only at this point we start to discuss Strategy. For us, strategy is the way we will win customers in our chosen market against the competition. The process requires asking some pointed questions: What creates value for the customer? What will beat the competitor, the space, the market? What do we need to overcome challenges and make this a reality? Who can help us in our aim?
- Now we challenge the strategy. We draw on people with relevant expertise (including customers) and test our hypotheses with them. This is a crucial step in our process as we don't want to sleep walk into failure by self congratulating our conclusions and being blind-sided. So we test, test, and test. If we can cover the foreseen gaps, and flush out the unforeseen risks, we can mitigate failure points.
- Execution of the strategy requires planning and discipline. We all have the common constraint of 24 hours in a day. What we do with that time determines our reality. The choices we make determine our actions. Our values influence our choices. The battle is often choosing what not to do today and having the discipline to do what is necessary.
The result? A clear understanding of what matters most.
If you are a leader, and are not clear on what matters most, you will be 'driven by the wind'. You will find yourself busy, but not always productive. Leaders who know, are able to set a course and 'tack into the wind', if necessary, to reach their destination. They are able to say "no" for the right reasons.
So for me, the real essence of forming a strategy becomes, "how will we achieve what we value"?