It is the beginning of an uncertain new year, following two chaotic ones. Many will have found that performance has been stunted, not just by the chaos of Covid, but by the lack of a capacity to co-ordinate and align activities across competing needs.
Often strategy is confused for a statement of a high-sounding mission or purpose, or the set of values under which they will operate. Sometimes, the strategy statement is as simple as the EBIT objective the MD set for the coming year.
All are necessary, none are strategy.
Your strategy statement should be your competitive game plan. It sets out in simple words three parameters:
- Your objective. This should never be a platitude, or something that can be applied to any business in your competitive sector. It must be the item against which all actions can be judged over an extended period. These are always best articulated using the SMART framework.
- The scope of activity. Your scope is a guide to which activities will be pursued, and more importantly, which will not. Defining what you will not do, removes much of the uncertainty about how objectives will be achieved.
- Competitive advantage. What is it that you do, or intent to do, that will deliver greater value to customers than they can find with your competitors. This is often the hardest of the three to articulate, and often becomes a statement of what you think you do well, or are setting out to do better. This is of no value in the absence of customers caring. A $50 watch tells the time as well as one that costs $50,000, so having a watch that tells accurate time is not a competitive advantage.
When your strategy statement achieves these three things, articulating the objective, scope, and your competitive advantage, in a short statement, you will have achieved more than most, and are off to a good start.
However, there remains the challenging task of implementation.
No matter how articulate, insightful, engaging and motivating your strategy statement, you will have achieved a score of 1 out of 10 on the strategic scorecard.
The other 9 points are reserved for implementation, the really, really, hard bit, the every- day work of leadership and management.
None of this is easy, is rarely done in a short time, and never without vigorous debate based on data, and the varying analyses of the implications from the data that can be made. It is also an iterative process, that improves with vigorous ‘pressure testing’ and ‘what if’ questions.
The question ‘How does this activity add to the achievement of the strategic objective‘ should always be asked during the course of normal activity. In the absence of a good answer that reflects the objectives of the strategy, the activity should not proceed.
Let me know when I can help you sort out this Gordian knot.
