The main reason your strategy sucks is because YOU CREATED IT IN A VACUUM (called your office and/or conference room).
I am amazed at the number of business leaders who can't tell me any details about their industry or their competitors. For some reason it appears that strategy is now only an internal conversation about the companies strengths, weaknesses, and goals. Are we crazy enough to believe that if we right something down and work really hard that we can make it happen?!?
Michael Porter wrote the book on strategy...and the name says it all - "Competitive Strategy: Techniques for Analyzing Industries and Competitors". All strategic analysis begins with the external environment which includes your industry and your competition. In order to understand you own organization, you must have context and that is provided by looking OUTSIDE YOUR OFFICE.
It infuriates me when I ask a business leader about their strategic planning process and then proceed to explain to me how they do their annual budgets. To make matters worse, even these are done by looking back and projecting forward with some % increase with absolutely no analysis of the world around them. There is no rigor around the discussion to challenge any underlying assumptions that will greatly impact their ability to achieve the proposed increases in revenue and/or profit.
Here is a short list of questions to consider:
- Do we have the same competitors as last year?
- Do we have the customers/clients as last year?
- Are there any changes in our industry?
- Is the overall economic situation the same?
- What changes are impacting our customers/clients?
- What changes are impacting our suppliers?
- Should our product/service mix change next year?
- What is our most profitable offering? Why?
This is just the start of the PROCESS that must be created because STRATEGY IS A PROCESS, NOT AN EVENT. There must be a process so the organization can continually scan the external environment and gather data about what happens with your actions come in contact with the world. These results are then fed back in so that your strategy becomes dynamic and responsive. This is different from reactive. Responsive strategy has a process that uses the DIKW Pyramid which prevents any reactive or snap decisions based solely on either data or information.
The real issue is that strategy is the most misunderstood and misused word in our business lexicon. We seem to want to make everything "strategic" which is sort of funny when you really think about it. Being strategic is much more about "how" than "what". At its core being strategic is simply the process of thinking about today's action in context of tomorrow's goals...nothing more and nothing less. There are hundreds of frameworks you can leverage to assist you in this process and you can find many of them here.
I encourage everyone to develop their own process and use as many or as few of these tools as make sense. The non-negotiable piece is that you must have a process. There must be mechanisms that gather feedback about the performance of your strategy so that you and your team can continually adapt in order to achieve your goals.
So when you are creating your strategic planning process, here are a few points to ponder:
- "Strategy is a high level plan to achieve one or more goals under conditions of uncertainty"
- "Strategy is important because the resources available to achieve these goals are usually limited. Strategy generally involves setting goals, determining actions to achieve the goals, and mobilizing resources to execute the actions. A strategy describes how the ends (goals) will be achieved by the means (resources). Strategy can be intended or can emerge as a pattern of activity as the organization adapts to its environment or competes."
Finally, all you really need to know about strategy comes from two well-known pugilists (one real and one from the movies:
- "Everyone has a plan until they get punched in the face." - Mike Tyson
- “Let me tell you something you already know. The world ain't all sunshine and rainbows. It's a very mean and nasty place and I don't care how tough you are it will beat you to your knees and keep you there permanently if you let it. You, me, or nobody is gonna hit as hard as life. But it ain't about how hard ya hit. It's about how hard you can get hit and keep moving forward. How much you can take and keep moving forward. That's how winning is done!” Rocky Balboa (more powerful to hear him say it)