Many leadership teams spend significant amounts of time together determining strategies and plans for their organisation. Yet, for many, the resulting strategy lacks both clarity and coherence. As a result, nothing much really changes and managers end up simply responding to external events and competitor moves.
For example, I worked with a UK retailer who had recently developed a new ‘strategic plan’. The plan, however, was simply a list of goals and objectives that were, on the face of it, ‘good’ things to do, but which had no clear articulation of what the organisation really needed to focus on to succeed. There was no mention of the company’s target customers, for example, or on what dimension it would seek to beat its competitors (e.g. price leadership vs. product authority vs. speed/convenience, vs. expert service).
In other words, the company’s strategy was a ‘blob’ of warm words and unfocused ambition. Even the executive directors were unable to list the company’s top three priorities, so what chance did managers and colleagues have of making decisions that were in line with the strategy?
Strategies only work if they are clear, coherent and compelling. Here are 5 questions you can pose to ensure that your strategy achieves that aim:
- What is the fundamental challenge that our strategy addresses? Answering this question provides you with the ‘why’ of your strategy. All companies face a myriad of issues, opportunities and challenges, but what are the critical few factors that should shape your strategic choices. For instance, I once helped a UK homewares business develop a new growth strategy, following several years of static revenues. Our first task together focused on understanding why sales had been so flat, so that we could define the strategic challenge. While some managers thought that price was the biggest issue and others believed that the product range wasn’t sufficiently attractive, our analysis led to general agreement that the company’s key challenge was to refocus the organisation on new sales channels, reflecting changes in the way consumers were shopping for its products.
- How will we make our customers’ lives better? Have you made clear choices about who your target customers are, and have you identified the needs, desires and frustrations of these customers that you’re aiming to satisfy? For example, Starbucks developed a global chain of coffee shops by providing affluent, on-the-go office workers with high-quality coffee and a ‘third place’ (neither home or work) where they could meet, relax and find some time for themselves.
- How will we win? You can only sustainably succeed if you’re able to differentiate your offer and your business from the competition. This means investing in assets and capabilities that set you apart. So, while Singapore Airlines will invest in the very latest inter-continental jets and service quality innovations to attract high-paying travellers, RyanAir has invested in a low-cost business model – low in-flight service, focus on ‘secondary’ airports, a fleet that is virtually 100% Boeing 737-800 – that enables it to offer low-fare travel to European budget passengers.
- What is our level of ambition? What level of growth, profit and performance are you aiming to deliver? What does success look like and how is this ambition reflected in a compelling #1 goal? For instance, I’ve recently written about how Topps Tiles developed an ambitious market share goal to drive their strategy https://morgancross.co.uk/strategy/how-to-create-a-no1-goal-for-your-business/.
- What are our priorities for action? What are the few things you need to focus on over the next few years to succeed and achieve your strategic ambitions? For example, McDonalds is currently pursuing a strategy called ‘Accelerating the Arches’ by focusing on three priorities: (1) Maximize our Marketing; (2) Commit to the Core; and (3) Double-down on the 3D’s – Digital, Delivery and Drive-Thru.
Answering these five questions will help give you strategic clarity. The work will take time and effort, but, done well, it will help you to improve the lives of your customers, to go beyond ‘business as usual’ and drive real change, to engage your teams to achieve more and, ultimately, to drive the future success and growth of your business.