Five Questions That Make Strategy Real

Jack Welch was the chair and chief executive of General Electric (GE) from 1981 to 2001. In those twenty years he increased the market value of GE from $14 billion to $410 billion, nearly 30x. He had a reputation as one of the top CEOs of all time. In his later years, Jack and his wife Suzy authored several books and many articles with plain, no-frills advice for business leaders.

This is one of my favourites:

By Jack and Suzy Welch, March 2016

Lots of people – most notably academics and consultants – tend to talk about strategy as if it’s some kind of high-brain scientific methodology.?We come from a different school of thought. That strategy is a living, breathing, totally dynamic game. It’s fun – and fast.?And it’s alive. Forget the scenario planning, yearlong studies, and 100-plus page reports that “gurus” suggest. They’re time consuming and expensive, and you just don’t need them. In real life, strategy is very straightforward. You pick a general direction and implement like hell.

How?

The first step of making strategy real is coming up with a big “a-ha” for your business – a smart, realistic, relatively fast way to gain sustainable competitive advantage. To do that, you need to debate, grapple with, wallow in, and dig into – and we mean?dig?deep into –your playing field (that is, your competitive situation) and its players. Let the following five questions guide you in that process, with meetings that are alive and continually ongoing.

WHAT DOES THE PLAYING FIELD LOOK LIKE NOW?

• Who are the competitors in this business, large and small, new and old?
• Who has what share, globally and in each market? Where do we fit in?
• What are the strengths and weaknesses of each competitor? How good are their products? How much does each one spend on R&D? How big is each sales force? How performance-driven is each culture?
• Who are this business’s main customers and how do they buy??

WHAT HAS THE COMPETITION BEEN UP TO?

• What has each competitor done in the past year to change the playing field?
• Has anyone introduced game-changing new products, new technologies, or a new distribution channel?
• Are there any announced or potential new entrants, and what have they been up to in the past year?

WHAT HAVE YOU BEEN UP TO?

• What have you done in the past year to change the competitive playing field?
• Have you bought a company, introduced a new product, stolen a competitor’s key salesperson, or licensed a new technology from a start-up?
• Have you lost any competitive advantages that you once had – a great salesperson, a special product, a proprietary technology?

?WHAT’S AROUND THE CORNER?

• What scares you most in the year ahead -- what one or two things could a competitor do to nail you?
• Is your top talent secure, and are you caring for them appropriately, with pay, perks, and a culture that inspires them?
• What new products or technologies could your competitors launch that might change the game?
• What M&A deals would knock you off your feet?

WHAT’S YOUR WINNING MOVE?

• What can you do to change the playing field – is it an acquisition, a new product, globalization, or better talent?
• What can you do to make customers stick to you more than ever before and more than anyone else?

Now, after you complete this exercise, the next step is to put the right people in the right jobs to drive the big a-ha forward. The facts are, you get a lot more bang for your buck when strategy and skills fit.

From there, it’s just a matter of relentlessly seeking out the best practices to achieve your big a-ha, adapting them, and continuously improving them. Strategy is unleashed when you have a learning organization where people thirst to do everything better every day. They draw on best practices from anywhere, inside or out, and push them to ever-higher levels of effectiveness. You can have the best big a-ha in the world, but without this learning culture in place, any sustainable competitive advantage will not last.

Strategy, then, is simply finding the big a-ha and setting a broad direction, putting the right people behind it, and then executing with an unyielding emphasis on continuous improvement. There’s no?mystery to it!