Remember Porter’s five forces? How about TQM, Blue Oceans, Big Hairy Audacious Goals, Balanced Scorecard, Net Promoter Score and Six Sigma……need I go on? While each of these business tools may well have merit, its only in the right context that they can be successful. These ideas are generally presented by their authors as universal truths. The notion that if your business just adopted the tactics presented therein, you, too, could enjoy the success of Apple, Google, Tesla or some other high flying business that fits into the author’s model. Blind application of any “trend” or “fad” business solution to solve what ails your businesses can be a big mistake. Here’s why…
Developing a business strategy is the number one job of any business leader. Fashion fads come and go but unlike the latest fashion craze, indiscriminately following the latest business trend can spell trouble. A business trend may or may not have merit for your business and while many popular books provide great tools for a given circumstance, fads or trends should never be a substitution for taking the time to develop your own strategy. These fads are appealing on a few fronts. Who can argue with the stories of success spilling off the pages of the latest business book and why not follow those who’ve already figured it out? Tempting, too, is that implementing a business trend gives off the illusion that you’re a leader on the cutting edge. Executing the latest business fad can channel a teams’ efforts keeping them focused, but not necessarily focused on the right thing.
We can all be lured into the temptation that we can somehow shortcut the task of building our own strategy. However, those who substitute a business trend for real a strategy violate the first principle of a business strategy; it must be unique and situation specific. So what is a strategy and how do you go about developing one?
Strategy is about tomorrow and how your business is going to create its future. It’s the means by which a company sets out to achieve its desired goals by making choices about what to do and importantly what not to do. Here’s the definition…
A business strategy is an organization wide focus on creating value for the customer and the company through the deployment of resources in such a manner that brings one’s strengths to bear on attractive markets (and sometimes competitor’s weaknesses) to achieve a central set of objectives through a continuously changing set of circumstances.
A good strategy involves everyone, creates value, allocates scarce resources and achieves objectives. A good strategy satisfies the following criteria:
- It’s unique to your company and to your market situation
- Tells where you will and where you won’t compete and why
- Pinpoints the target customers and reveals their unmet needs
- Leverages company strengths, matching them to the target customer needs
- Allocates scarce resources
- Matches long term objectives with short term outcomes
- Is simple to communicate and easy to understand
Business trends by their very nature conveniently ignore a universal truth – that all strategy is situation specific! Without a strategy how can one know which blue oceans to sail and which seas to avoid, which scorecards to balance and which to forget. As a seven habits leader, you’ll need a strategy to know where to lead to and only with a strategy will you know if TQM or Six Sigma is providing a competitive advantage or is an exercise in parity.
To borrow from the great Vince Lombardi; Strategy isn’t a Sometimes Thing – it’s an All Times Thing. It’s not something leaders think about once in a while – it’s something they think about all the time. Strategy invades every decision and every action a leader takes. Most important, strategy is always situation specific in that, once developed, the objectives don’t change but how you achieve them within constructs of the strategy, is always flexing, bending and adjusting to new circumstances as they present themselves. If you have control over resources, i.e. time, other people’s time or money – you don’t need the latest ‘how to’ book. You need a strategy!