Countless best-sellers tout the need to
develop a superior business strategy.
But that’s not always easily accomplished.
“My old strategy textbook boldly declared,
‘There is no single, universally accepted definition of strategy,’” says Chris Spivey, vice
president of Business Process and Project
Leadership Services for MIS Group. “When I
first read that, I wanted a refund! We can
define refund. Why not strategy? Many companies are so preoccupied with defining
strategy that they never have time to actually
develop one. But without agreement,
achievement is problematic.”
Smart Business talked to Spivey about
developing a superior business strategy.
So how do you define strategy?
American Heritage Dictionary defines
strategy as, ‘a plan of action resulting from
strategy’ and refund as, ‘a repayment of
funds.’ What? Strategy results from strategy?
Scott Adams book, ‘Build a Better Life by
Stealing Office Supplies: Dogbert’s Big Book
of Business,’ declares, ‘Any good strategy will
seem ridiculous by the time it is implemented.’ It’s hard to argue with that.
If you think strategy is nonsense, you’re
partially right. It makes no sense, at least not
according to the dictionary and Dogbert. It’s
common to get ‘stuck’ trying to develop strategy. However, businesses with no strategy
have little direction and are increasingly vulnerable. In last month’s issue of Smart
Business, Greg Boyd, the president of MIS
Group, talked about how leaders must
become intentional with regard to integrating
business and technology. That intentionality
must also be applied to developing a strategy
that will facilitate proper use of technology.
So how does a leader get started building a
good business strategy?
Using an existing framework helps. There
are various philosophies out there about
what makes a good foundation, but I have a
few favorites.
David G. Thompson’s book, ‘Blueprint to a
Billion’ points out seven essentials found in
companies that have achieved exponential
growth. They include:
- Creating and sustaining a breakthrough value proposition. Offer customers a product and value they cannot get
elsewhere. - Exploiting a high-growth market segment. Know what market segment you are
in and, if appropriate, place your company in
a growing segment. - Cultivating marquee customers that
shape your revenue. Make sure your customers want to evangelistically recommend
you to others. If they don’t, find out why, and
fix it — fast. - Leveraging alliances that help you
break into new markets. Cultivate and
maintain the right alliances. - Mastering the art of exponential
returns. Know how to nurture areas with
high returns, and eliminate those with low
returns. - Pairing inside-outside leadership. Instead of one leader focused on both internal operations and external alliances, consider a pair of leaders, one focused inside and
one focused outside. - Getting advice from experts. Put in
place those experts who can bring timely,
objective advice.
Evaluating which of these seven components are present in your company will give
you a great starting place. Bob Prosen’s ‘Kiss
Theory Goodbye’ provides a tremendously
helpful viewpoint on the importance of both
measurement and results.
What other models are helpful?
Going back to fundamentals, Michael
Porter’s ‘5 Forces Model’ looks at elements
that impact every company: 1) the bargaining
power of customers; 2) the bargaining power
of suppliers; 3) the threat of new entrants; 4)
the threat of substitute products; and, 5) the
intensity of competitive rivalry. Each of these
elements has a direct impact on a company’s
profitability and sustainability. Strategy must
be developed with all five ‘forces’ in mind.
What is the next step?
Areas needing improvement can be identified and opportunities for expansion or efficiencies can be pinpointed. Strategy should
be divided into goals and objectives that then
drive requirements for processes. These
requirements should consider attributes
such as risk, control, speed, resources,
redundancy, quality of output and cost.
Processes can be put in place to provide
achievable results. Measurements can be
established so a company can ascertain
whether results are being met. Incentives can
be designed so team members have positive
motivation and accountability for results.
So effective results, process, measurement
and internal control all start with strategy?
Once you get a strategy in place, you start
all over again. Change is inevitable. Remember Dogbert’s admonition that a strategy
quickly becomes irrelevant? You may look at
your first attempt as ‘ridiculous’ once you’re
‘finished’ implementing it. But keep at it.
Effective strategy has to be continually
updated to reflect changes in your business
environment. But with each update, the process gets easier. It takes hard work and discipline, but I bet your business is worth it. <<
CHRIS SPIVEY is vice president of Business Process and Project Leadership Services of MIS Group, www.misgroupusa.com. Reach
him at (800) 454-0993 or [email protected].
Vice President of Business Process and
Project Leadership Services
MIS Group