There has been a tremendous amount of upheaval during the past year.
Many of the companies I work with had to make dramatic changes to the way they do business. As one CEO I work with said, “One day I had 168 employees, and the next day I had 168 field offices.” As a result of Covid, companies have been forced to reimagine how they sell their products and services. As we transition back into a hybrid form of working, several of my clients are revisiting their strategies to adjust them to the new realities of the marketplace. If you face a similar challenge, here are a few ideas that might help you.
The first and most important idea about strategy sounds very simple, but it is exceedingly hard to implement.
All effective strategy is just valued differentiation multiplied by disciplined execution.
In other words, a winning strategy is based on delivering products and services that meet these four criteria.
- Unique and compelling.
- Highly valued by your target customer.
- Difficult if not impossible to copy.
- You can consistently deliver it with excellence.
Go back and read that a few times, then I challenge you to sit down and figure out exactly how your business meets these criteria. It is not easy.
By the way, this does not mean that your products/services have to have all sorts of fancy new features or special pricing. On the contrary, you can own a market segment by understanding what the customer wants and delivering it better than your competition. It may not be sexy, but consistently nailing the fundamentals is a great way to win and keep customers.
Quality of People
Keeping in mind the criteria above, I believe there are five ways to create a sustainable competitive advantage.
- Higher, grow, and retain top talent.
- Create a winning culture where people have an ownership mentality.
- Develop solid customer relationships.
- Build a trusted and respected brand.
- Effectively use data.
*Side note to numbers four and five.
If you do not have a well-known brand at this time, then you can do what I call a “brand hijacked.” Align your company with another organization that has a highly respected brand, and you will transfer some of their brand equity to yours. You can achieve this through sponsorships, partnerships, or marquee clients.
As to data, most organizations are sitting on a gold mine of information. They just don’t use it. If you can use your data to find patterns, anomalies, and trends before your competition does, you get a significant market advantage.
Allocating Limited Resources
All strategy is based on the allocation of scarce resources (even Google does not have unlimited resources). Therefore, it is critical that you figure out how to deploy these resources equally as important, where you will not allocate resources. In other words, a huge part of strategy is deciding when to say “no.”
An Educated Guess
Although I have conducted many strategic planning sessions, I always have to remember this important fact: we’re just guessing. Even with the best data, tons of market research, and a robust planning methodology, it is still just a very educated guess at the end of the day.
I often see organizations changing their strategy any time the wind blows in a different direction. A competitor brings out a new product, one customer complains about something, the CEO reads an article and everything changes. It is critical to stay focused on your strategy unless the market absolutely demands that you change it.
Lastly, perhaps the most important, is that the world’s best plan is utterly useless if you don’t execute it. I teach an executive-level seminar on strategic thinking and strategic planning at the Wharton School of Business for the last 21 years. Every year I ask my class, “What percentage of companies that have a good strategic plan effectively execute their plan?” The answer every year has been 10 to 15%. There is no lack of brilliant people who can develop uber-impressive strategies. However, there is a huge lack of people who can take those strategies and turn them into reality in the marketplace. So to me, it is important to spend just as much time talking about how to execute the plan as you put into creating the plan.
There are other things I can add to this list. Still, if you do these things exceedingly well, you will set your organization up for success in even the most challenging times.
If you want to get in contact with me, I’d love to hear from you. Please visit my site at https://johnspence.com/contact/ and let me know how I can help.