If I asked you to summarise your organisation’s strategy, could you? And, if you could, would your answer be the same as your colleagues?
In my experience, very few business leaders can do this, and there are even fewer organisations where the whole executive team, let alone the wider organisation, will give the same response.
Here’s the thing: if you can’t describe your strategy to your organisation in plain, straightforward terms then you’ll never be able to make it happen.
A strategy statement must be clear, specific and concise. It is not a high-level vision, which describes the kind of organisation you aspire to be (e.g. The world’s greatest airline) or a core purpose statement, which sets out why your organisation exists (e.g. To help people lead healthier lives).
It is, instead, a description of what your business will focus on to drive its success over the next few years. It’s not a plan, either, but a formula for future success, and while academics and consultants have persuaded many executives that strategy development is a highbrow activity that only the top 1% of intellects can manage, there are just four factors you need to focus on, as set out in the chart, above, The Strategy Arrow.
So, let me share with you how you can create your own strategy statement using the output of a strategy project I did with Topps Tiles, the UK’s leading tile retailer, some years ago.
- Your #1 Goal. All businesses have many targets, goals and objectives, but this can lead to a lack of clarity. Establishing a goal that sits over and above all your other targets will give you and your team better focus, aids communication across your organization and helps simplify and accelerate many of your major resource allocation and investment decisions. In fact, I would argue that identifying your #1 goal is the most important strategic decision you will make. At Topps Tiles, for instance, we established a #1 goal to grow the company’s UK market share from 25% to 33% within five years. As a result, the company developed new service standards, developed new innovative ranges, spent more time attracting trade customers and developed new formats, specifically to deliver against the goal. As Matt Williams, the CEO said, “The goal galvanized our organization and has been a key part of our success.”
- Where You Play. This is the scope of your business, and includes your target customers, your products and services, your geographical reach and your channels to market. Most strategic moves are changes in where companies play. Microsoft’s decision to move into the gaming market, through the development of the Xbox, for instance, is an example of change in strategic scope. The company brought its brand, capabilities and market reach to enter an entirely new market, driving new growth for the business. At Topps Tiles, the focus on tiles led the company to exit its wooden floor business and increase its level of innovation and design focus on ceramic tiles.
- How You Win. This is your competitive strategy and articulates how you will be advantaged against your competitors and what you will be famous for. For example, Southwest airlines are famous for their low fares, McDonalds is famous for its ease and convenience, BMW is famous for product and engineering quality, and IBM is famous for delivering bespoke, customized solutions for its corporate clients. It’s difficult, probably impossible, to be famous for all of these things at any one time so, as with much of strategy, you have to choose. For Topps Tiles, it was clear that product leadership, supported with excellent service, was the key differentiator for the business. The management team called this focus, “Out-specialising the specialists” which became the overarching theme of the strategy.
- Your Agenda For Action. These are the top 3-6 objectives you are implementing to deliver your #1 goal, establish your playing field and enable you to win. In other words, it is the priorities you need to focus on to get you from where you are now to where you want to be. At Topps Tiles, for instance, the executive team focused consistently on three strategic objectives: range authority; delivering an inspirational shopping experience; and multichannel convenience. The specific projects within each of these objectives changed from year-to-year but the three objectives, like the company’s #1 goal, remained constant.
Putting all this together into a strategy statement with cut-through, the executive team developed this:
Our goal over the next five years is to grow our share of the UK retail tile market from 25% to 33%, by providing attractive, high-quality tile ranges and accessories, together with outstanding customer service, to domestic and trade customers across the UK through our national branch network and our on-line reach.
To deliver our ‘out-specialise the specialists’ strategy we will focus on 3 strategic priorities:
- Range authority
- Inspirational shopping experience
- Multichannel convenience
This statement gave the CEO, his team and the wider organisation the clarity needed to deliver. Each retail branch set its own market share goal, for example, and cross-functional teams came together to improve the shopping experience for both trade and retail customers.
As a result, within four years – rather than five – the goal had been achieved. The structure of the ‘strategy arrow’ created strategic clarity and cut-through, allowing everyone across Topps Tiles to understand the new growth strategy and commit to its successful delivery.