What Is Your Strategy?
I am a big strategy fan, mostly because I have restructured so many companies that did not have one. Others had one that had not changed in years despite significant changes in the market environment. A Strategic Plan must be a living document that reflects the realities of the world around you. Your strategy must reflect the way the world works, not the way you would like it to work. Truly innovative strategies in fact change the way the world works, which does not happen on its own. You have to make it happen.
What is your strategy? It is not very difficult. To start, it is a multiple-choice question. You can be one of three things: cost leader, differentiated or a niche market supplier. Selecting one does not insure your success, but picking more than one certainly insures your failure. You have to decide what you are going to be when you grow up and how you are going to get there.
Most of the Strategic Planning process is evaluating the environment in terms of the customer, competitors, technology, government and substitute products. From there you assess your relative strengths and weaknesses, identify the internal and external opportunities and threats to determine the best way for you to compete. It can all as complicated as you want to make it. If you do not have a strategy, keep it simple on the first pass, and then start getting elegant.
The next step is to identify the gaps between where you are where you want to be. Your Business Plan will incorporate the actions you will be taking to fill those gaps. This can be the hard part. I have seen so many Strategic Plans that assumed deficiencies could be dealt with cheaply and quickly when an impartial observer could say the plan was doomed.
This brings up a critical step in the planning process. The voice of reason from an independent source that can give candid feedback on your plan, particularly if you are a solopreneurs, is essential. Even if you have employees that you have included in the process, every company has its own killer assumptions. Things they believe to be true and have institutionalized in their group thinking process that simply are not true. Independent eyes and ears are invaluable.
I have described very briefly the planning process in the style of Michael Porter. I have worked with Michael Porter and the Monitor Group in the past and that is why. There are plenty of other strategy gurus out there. You can read their books and fashion a planning process around their particular styles. They will likely not differ much. The important thing is that you have a framework for Strategic Planning and use it. It will define the way you look at the world and run your business. At least when you have time to come up for air in between managing the day-to-day affairs of your business.
For those of you that are strategy deprived, I will be writing some more articles to take you through the process. I am also hosting events that will focus on strategy. If you live in the Issaquah, Washington area or do not worry about falling off the eadge of the Earth if you try to drive there, I hope you will join in.
Richard Gabel
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