Do you know how to set a winning strategy?

26-Aug-2010

Research from the Harvard business school shows that 90% of strategies fail due to poor execution. This assumes your company even has a real strategy. Many companies think they have a strategy, but all they have done is a meaningless exercise in financial goal setting.

Growth is not a strategy. Efficiency is not a strategy. Yes, we all need to continuously improve – but improvement is not a strategy. Strategy is not about being better.

Strategy is about establishing a meaningful point of difference you can preserve. Strategy is about resource allocation. Strategy is making clear-cut choices about how to compete. You cannot be everything to everybody - you have to figure out what to say NO to. Once you have a clear vision, your strategy is the road map that outlines "how" you are going to achieve your vision.

Leaders need to keep one eye focused on the short-term - and one eye focused on the long-term. Short-term is about improving the current core business, and meeting the needs of today’s target customers. Long-term is not about performance improvement – it is about forgetting the past and reshaping the business to compete more effectively in the future. Balancing these two opposing concepts is one of the great challenges of leadership.

Here is a brief introduction to the kind of questions you need to answer in order to effectively set strategy:

What competitive forces will impact your firm (e.g. competitors, new entrants, substitute offerings, suppliers, customers) – and what moves do you need to make to address these?
What macro forces will impact your industry (e.g. political, economic, social, technological) – and what moves do you need to make to address these?
What geographic area do you plan to serve, and how will you access those locations?
Who will be your target market customer?
How will you strategically position your brand in your marketplace?
What benefits will you offer?
What will change in the way you interact with customers?
What core competencies will you need to develop?
What is your business? What should it be?
What core activities will you perform / develop / acquire?
What is NOT your business? What should it NOT be?
What non-core activities will you stop doing / outsource / divest?

Taking these (and other) factors into account – what are the key strategic moves you need to make to position your firm for future success in your industry?

Strategic planning should be an ongoing process - not an annual event. Effective companies update their strategic plan every 90 days to ensure relevance with the competitive environment, and to align all their people to the strategic priorities.

Setting strategy is just the beginning. The real leadership challenge then becomes the successful execution of your strategy. But of course, you must start with a winning strategy – if you want to have any chance of winning at the game of business.

Stephen Lynch

Chief Operating Officer - Global Operations
RESULTS.com

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