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Business Management

Are You Strategic?

Here are three principles to help managers climb the strategic summit.

Rich Horwath

Here are three principles to help managers climb the “strategic” summit.

Create Differentiation. What do Johnny Cash and the Mini-Cooper automobile have in common? Johnny Cash didn’t have the best singing voice and the Mini-Cooper isn’t the highest performance automobile on the market. However, they have both been remarkably successful, not because they were “better,” but because they were different from their competition in ways their core customers valued. Strategic leaders are continually asking two questions:

  • What are the different activities we’re performing than our competition?
  • What are the similar activities we’re performing in a different way than our competition?

Focus Resources.Good leaders cannot afford to act like Farmer Brown. In the morning Farmer Brown hops on the tractor and spreads fertilizer evenly across the crops in hopes that everything will grow. Strategic leaders don’t spread their resources evenly across the business in hopes that everything will grow as well. If they do, their business will ironically end up in the same state as Farmer Brown’s fertilizer.

Strategy is as much about what you choose not to do, as it is about what you do. Focus requires trade-offs and trade-offs require risk. Those leaders not willing to take risks will never make it to the top of the strategic summit. Two questions to begin thinking in terms of focus:

  • What potential offerings have we chosen not to provide to customers?
  • Which potential customers have we chosen not to serve?

Design Systems.From the coral reefs of Cozumel, Mexico to the Amazon Rain Forests to our own bodies, life is comprised of systems. Strategy is no different. Great strategies are comprised of a system of activities that tightly fit together and act as a shield to competitors attempting to copy your successful business. If you only have one activity that makes up your strategy, the chance a competitor can successfully copy it is quite high. However, the more activities you build into your strategy, the more difficult it becomes for competitors to copy each and every one of them including the relationships they have with one another.

Strategic leaders ask two questions relative to their system of strategy:

  • What are the three to five strategic themes that we are going to build our system of strategy around?
  • Which activities or tactics will strongly support the strategic themes we are basing our business on?

 

Soul Searching or Truly Knowing?
Organizations can continue to operate in first gear with only a handful of people strategically contributing to the business or they can tap into the deep reservoir of insights that are waiting to be awakened in managers at all levels. Developing managers into truly strategic leaders begins with the proper assessment of their strategic thinking competencies and then leads to programsspecifically designed to enhance their strategy skills. World-class companies such as P&G and GE are maximizing the strategic insights of managers at all levels by developing organizations of strategists. Are you?