There is no perfect strategy—nothing can guarantee your business a sustainable competitive advantage.
Playing to Win: How Strategy Really Works shares six signals your company has a particularly worrisome strategy. The book also shares six signs you have a Winning Strategy.
A quick overview of Playing to Win:
- Strategy is about making choices.
- Strategy is about increasing our odds of success, not guaranteeing it.
- Strategy making combines rigor and creativity.
Author A.G. Lafley offers, “Even in a VUCA world, strategy can help you win. It isn’t a guarantee, but it can shorten your odds considerably. A lack of strategy has a clearer and more obvious result: it will kill you. Maybe not right away, but eventually companies without winning strategies die. A great invention or product idea can create a company, build value, and win in the marketplace for a while.”
Your company must answer the five strategic questions that create and sustain lasting competitive advantage.
- Have you defined winning, and are you crystal clear about your winning aspiration?
- Have you decided where you can play to win (and just as decisively where you will not play)?
- Have you determined how, specifically; you will win where you choose to play?
- Have you pinpointed and built your core capabilities in such a way that they enable your where-to-play and how-to-win choices?
- Do your management systems and key measures support your other four strategic choices?
Here are six of the most common strategy traps, signals a company has a particularly worrisome strategy:These are strategic traps to be aware of as you craft a strategy for your organization. But there are also signs that you have found a winning and defensible strategy.
Six Telltale Signs of a Winning Strategy
Because the world is so complex, it is hard to tell which results are due to the strategy, which to macro factors, and which to luck. Here are some common signs a winning strategy is in place. Look for these, for your own business and among your competitors.
- An activity system that looks different from any competitor’s system. It means you are attempting to deliver value in a distinctive way.
- Customers who absolutely adore you, and non-customers who can’t see why anybody would buy from you. This means you have been choiceful.
- Competitors who make a good profit doing what they are doing. It means your strategy has left where-to-play and how-to-win choices for competitors, who don’t need to attack the heart of your market to survive.
- More resources to spend on an ongoing basis than competitors have. This means you are winning the value equation and have the biggest margin between price and costs and the best capacity to add spending to take advantage of an opportunity or defend your turf.
- Competitors who attack one another, not you. It means that you look like the hardest target in the (broadly defined) industry to attack.
- Customers who look first to you for innovations, new products, and service enhancement to make their lives better. This means that your customers believe that you are uniquely positioned to create value for them. Even companies with these telltale signs shouldn’t rest, because no strategy lasts forever. All companies need to evolve their strategies—to improve, sharpen, and change to stay competitive and, ultimately, to win year after year. Ideally, companies should see strategy as a process rather than a result—adapting existing choices before business and financial results (which are always lagging indicators) start to turn down.
Please note the following disclaimer: Unless your business is $10 Million or more in revenue, and/or intends to attain $10M or more, these strategy ideas may not be relevant.
Once a business attains $10M in revenue, a lack of strategy will be detrimental to further growth. Unless your business has no competitors (and even if you do, it won’t for long) once you reach $10M your business is more susceptible to attacks from competitors.
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.
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NEXT BLOG – A GREEN BUSINESS
It’s the Christmas season, and a good time to think green. Guest writer Karoline Clarke shares some important details and advantages to taking your business green, next blog.