If 2020 was a humbling year for you in terms of revenue growth, then it’s time to work on strategy.
Even if 2020 went well, 2021 is still a good time to work on strategy.
Strategy is one of the Four Decisions you need to get right or risk leaving significant revenues, profits, and time on the table.
Strategy Decisions result in top line revenue growth.
Question. How different is your business from your competitors?
Michael Porter’s definition of strategy: creating a unique and valuable position involving a set of differentiating actions.
In the One Page Strategic Plan, you should have a list your differentiating actions.
Develop Your Strategy
Developing a strategy is about making decisions.
This includes what you are going to do, and what you are not going to do.
Strategy decisions must be made within the context of your Core Customer.
Shannon Byrne Susko describes three steps to achieve this in 3HAG WAY: The Strategic Execution System that ensures your strategy is not a Wild-Ass-Guess!
“Many high-growth companies spend 98 percent of their business day executing—in other words, putting out fires and handling day-to-day operations. But productive strategy planning will require more than just 2 percent of your time.” But productive strategy planning will require more than just 2 percent of your time.
“The truth is that the more time you spend on strategy with your team (not by yourself!), the better the whole team will execute, because the clearer everyone will be on the day-to-day decisions that drive your 3HAG and BHAG.” ~ Shannon Susko, 3HAG Way
Why know who your Core Customer is?
Knowing your Core Customer, right down to the individual, is not about marketing. It’s about strategy. Knowing the biggest needs of this individual help you carve out a unique and valuable position by revealing what differentiating actions are meaningful to your Core Customers.
When you focus on the customers who provide the greatest return, when you direct all your resources toward those Core Customers, you’ll be rewarded in growth and profitability.
3–5 Differentiating Actions to Create Your Unique and Valuable Position
Your company should not be competing head-to-head with another company on single features; rather, you need to find your Core Customer. One your company can serve on its own dimension, one no one else can serve due to your interdependent 3–5 Differentiating Actions.
Differentiating your company from the competition is important, but it’s especially important if your company is competing in a commoditized marketplace, in which every other business is positioned essentially in the same dimension. A commoditized marketplace is usually a race to the bottom, with everyone competing on price. That what happened in retail. And why so many retailers are extinct.
A unique and valuable position is based on at least 3–5 interdependent Differentiating Actions. If a competitor copied any single one of these actions, it would not upend your unique and valuable position.
Find Your Most Profitable Dimension
Strategic evaluation of the external marketplace is critical because it helps you understand what kind of strategy you should implement. You don’t “make up” a strategy; you and your team decide on a strategy to put your company in a unique and valuable position through 3–5 Differentiating Actions.
The Attribution Framework allows you to see how you can position your company to serve the needs of your Core Customer. Will share the Attribution Framework in a January blog.
According to Michael Porter’s research, there are three generally accepted ways to create a differentiated strategic position:
- Serve the broad needs of a few customers
- Serve some needs of many customers
- Serve many needs for many customers in a super-specific market
The Attribution Framework helps you discover where the white space is in your marketplace.
The White SPACE is where you stand out, where you are clearly different from your competitors.
How different are you from your competition?
Can you and your team identify 3-5 differentiating activities when woven together make your business stand out with one of Porter’s three differentiated strategic positions?
If not, then you MUST focus on strategy. If you failed to improve revenue growth this year, you’re falling behind. Strategy Decisions are all about top line revenue growth! Mor on strategy development in future blogs. Contact us today to schedule a free exploratory meeting.
Growth demands Strategic Discipline.
To build an enduring great organization, requires disciplined people, disciplined thought, disciplined action, to produce superior results, and make a distinctive impact in the world.
Discipline sustains momentum, over a long period of time, laying the foundations for lasting endurance.
Meeting Rhythms achieve a disciplined focus on performance metrics to drive growth.
Let Positioning Systems help your business achieve these outcomes on the Four most Important Decisions your business faces:
Positioning Systems helps mid-sized ($5M - $250M) business Scale-UP. We align your business to focus on Your One Thing! Contact firstname.lastname@example.org to Scale Up your business! Take our Four Decisions Needs Assessment to discover how your business measures against other Scaled Up companies. We’ll contact you.
NEXT BLOG – What Makes Your Brand Unique?
In 7 Gallup Workplace Insights: What We Learned in 2020, #6 is, If your employees don't know what makes your brand unique, your customers won't either. Your strategy needs to be known throughout your organization. I’ll bet less than 50% of your employees know what your strategy is. Next blog the Attribution Framework to help you define 3-5 unique differentiating actions.