Core to running your business is your strategy. The word is often used synonymously with mission, vision or plan. However, the strategy is not the same as a mission, vision or plan. Vision is necessary as it imagines a future for the business which, if well stated, provides inspiration and aspiration for the team. Mission is what a company stands for, its purpose for existing. The plan is about execution, tactics and specific initiatives to achieve specific goals.
Strategy is imperative to long term success because it defines what makes your company distinct, why customers would buy from it, and what is required to maintain that distinctiveness over time. Strategy has to be well thought out — how a company sustains itself in its marketplace or how it makes strategic moves into new markets, or introduces new products/services, or takes existing products to new customer segments. Michael Porter states, in his famous “What is Strategy?” paper for Harvard Business Review in 1996, “Strategy renders choices about what not to do as important as choices about what to do.”
Once it is clearly articulated, a strategy stays relatively constant unless there is major change going on in the company’s industry. The intention of strategy development is to clarify the unique position of the company compared to competitors and to articulate the moves the company should make over time to ensure their unique value is kept distinct. Porter emphasizes that it is not enough to know what your customers want and meet that need. If meeting customers’ needs were enough for long term success, your competitors would simply ask your customers what they want and offer the same product or service as your company. A strategy has to define the best set of activities to delight customers but it must also be different. Strategy is about choice…choosing what you will do, building operational plans to achieve the strategy, and not chasing every competitor or customer need. All companies are resource-contrained. Thus, applying your resources to the most important activities to achieve your strategic goals requires discipline. The strategy should be laid out in a clear, actionable, detailed document that can be shared and acted upon by the various functional and operational groups in the company. A strategy is worthless if it cannot be shared and understood by the team who must execute it.
In our next post, I will consider a company who is challenged. Their growth has slowed down and their competitive position has weakened to a point that the future is in doubt.
If you would like to learn more about how Calade Partners can help your company articulate its strategy, feel free to contact us by clicking here.