The Ultimate Formula for Strategic Success

Posted On: October 30

I have taught strategic thinking and planning in an executive-level course at the Wharton School of Business for nearly 25 years. I can boil down everything I teach into one formula. All effective strategy is Valued Differentiation (x) Disciplined Execution. In other words, you must bring something to the marketplace that is: 

    1. Unique and compelling 
    2. Highly valued by your target customer 
    3. Difficult, if not impossible, to copy 
    4. Consistently delivered with excellence.

The Limits of 4 P’s 

Traditionally, businesses have focused on four primary areas to get a competitive advantage: product, price, place, and promotion. Unfortunately, they don’t work as effectively as they used to for these reasons: 

    • Product: unless you have proprietary intellectual property and a patent, almost every product can be copied at some level. 
    • Price: competing on the lowest price is a race to the bottom. There’s always someone willing to go into bankruptcy faster than you. 
    • Place: for a few businesses, location is a differentiator unless your competition can put a building across the street. For most people, online shopping has made place irrelevant. They can buy any product, from anywhere in the world, at the same or a lower price, and have it delivered to their door almost instantaneously. 
    • Promotion: if your competition has a big enough budget, your marketing campaigns and promotions can be easily copied. 

The Five Pillars of Competitive Advantage 

I have given a lot of thought to what businesses can do to create a sustainable competitive advantage. Here is what I’ve come up with.  

    1. People. The success of your business is 100% dependent on the quality of the people you can hire, grow, and keep on your team. If you genuinely have the most talented people who stay on your team, that will give you a competitive advantage. 
    2. Culture. One of the main factors that attracts and keeps top talent is working in an organization with a winning culture. A culture like this incorporates all the elements that create strong employee engagement with high levels of accountability that deliver the required business results. 
    3. Customer relationships. If you have deep relationships with your customers, you have created a significant barrier that is nearly impossible for your competition to overcome. 
    4. Brand. A strong brand that is well-known and respected cannot be copied 
    5. Data. If you have collected significant data on your marketplace, competition, and customers and use it effectively, that is impossible to copy. 

This means you should focus a significant amount of time on making your business a talent magnet through an outstanding culture. Become extremely close to your customers so you genuinely understand them. Work to build a superior brand and become an expert at using all the data you collect to create an unassailable strategic advantage. 

Focus Through Exclusion 

In its purest form, strategy is simply the allocation of scarce resources. That means one of the most important strategic decisions you must make is what you will say NO to. What products and services will you not offer? What customer groups will you not serve? Which projects that are not working will you walk away from, even though there might be a significant cost? Saying yes to everything means saying no to long-term success. 

Unlocking Business Excellence 

Several years ago, I was asked to give a keynote presentation to 1,600 employees from a Fortune 100 company on “The Essence of Excellence.” I spent a lot of time researching the topic. I talked to successful CEOs, presidents of universities, and top thought leaders. Ultimately, I felt it all came down to three key ideas. 

    • Focus. You must be insanely focused on where you can win (target market), how you can win (strategy), who you want to play against (positioning), and how you want to play the game (vision and values). 
    • Discipline. You must have the courage and fortitude to stick with your strategy — unless there are significant changes in the marketplace. 
    • Action. The amount of effort you apply will determine the amount of results you get. 

There is not going to be less competition in the future; there is going to be more. The speed of change will continue to accelerate. Customers will become more demanding. And it will be harder and harder to stand out from that competition. Applying the Valued Differentiation (x) Disciplined Execution formula can make all the difference. 


Unlock the secrets to strategy. Learn to craft a winning strategic plan, set actionable goals, and execute with precision. To receive updates and special offers for our course, Strategy Made Awesomely Simple, click the infographic below and sign up. I look forward to guiding you to create a strategy that will take your business to another level of success.

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