Stop Working Harder Than Your Business Strategy
LinkedIn Article by Tim Williams
September 6, 2017
If you have a hard-working team that seems to be working longer hours by the day, it’s likely because you don’t have a hard-working business strategy.
In today’s always-on business environment, it's easy to assume more success will always require more time at work. More meetings, more emails, more “team collaboration.” But consider that the very purpose of a business strategy is to make it easier to produce marketplace results.
As business strategist Jules Goddard observes, the beauty of an effective strategy is that it allows you to create value with much less effort. “If you do strategy well,” he says, “you never have to worry about staying late to work.”
How can you tell if you have a business strategy that's as hard working as you are? Ask the following ten questions (which are especially pertinent if you're in the professional services business):
- Does our strategy strike the right balance between authentic and aspirational? Our business strategy should make us stretch, but it should feel invigorating, not frustrating. It should build on our natural strengths, not strengths we only wish we had.
- Does it allow for clear identification of target prospects? A focused business strategy will result in a well-defined list of "A" prospects. In professional services, this means just a few hundred names instead of a few thousand.
- Does it help us say no to the wrong customers? An effective strategy provides the leadership team with a litmus test for selecting prospects that want you for what you do best.
- Does it make our firm intensely appealing to the types of customers we want most? A strong yet narrow focus means your firm will be very attractive to a very specific target customer. It makes you intensely appealing to someone instead of mildly appealing to everyone.
- Does it help expand our geographical footprint? A unique offering is compelling enough to attract prospective clients not just from your own postal code, but literally from around the world.
- Does it create strong barriers to entry? A well-crafted business strategy creates boundaries that make it difficult for competitors to enter your space.
- Does it result in fewer competitors? Your strategy should dramatically reduce the number of direct competitors (other firms who say they do the same thing or serve the same market).
- Does it help us step-up our pricing? Given that strategy of most firms is to compete on the basis of differentiation instead of cost, your strategic approach should enable to charge more for what you do.
- Does it make business development easier and less expensive? One of the primary economic benefits of an effective strategy is that it reduces your cost of securing new clients by producing more inquiries, reducing the number of competitive shoot-outs, and eliminating the need to respond to scattershot RFPs.
- Does this have the potential to create a completely new category? Ultimately, your strategy should lead you into the waters of the “blue ocean” where, if pushed far enough, could potentially help you create a completely new kind of firm that never existed before.
One more bonus test, perhaps the simplest of all: Would it be rational to choose the opposite of your strategy? Or as Roger Martin puts it, “Could I make the opposite choice without looking stupid?" Martin, the of "Playing to Win," believes this is the first question to ask of any strategy. For example, if your strategic approach hangs on the promise of “excellence,” would the opposite strategy make sense? Most decidedly not. Same with other platitudes-masquerading-as-strategies like “operational effectiveness.” Looked at another way, if competitors are executing strategies that are the exact opposite of yours, that’s a sign you actually do have a strategy.
The overarching precept that should frame all strategic choices is a sound theory of the future of your business. As business school professor Todd Zenger teaches his students, “Companies that enjoy sustained success are typically founded on a coherent theory of value creation." Sound theories of value creation are informed by what Zenger calls the three “sights” of strategy:
Foresight, which is about articulating your beliefs and expectations regarding your industry’s evolution, which predicts which assets, investments, or strategic actions will prove valuable in the future.
Insight, which is about a deep understanding about your organization’s existing intellectual capital and assets, especially the features that are unique, distinctive and valuable.
Cross-Sight, which is about identifying complementary opportunities and strategic adjacencies as well as recombinations of existing competencies that can create new forms of value.
The problem with most business strategies is that they claim too much and sacrifice too little. This provokes disbelief from both current and prospective clients. The plausibility of your claims is, by itself, an important test of your strategy.
The sophisticated companies you'd like as clients understand that rapidly evolving technologies and disruptive business models are fueling the need for increasingly specialized expertise. So when your firm promises “end-to-end solutions” or “full-service,” prospective clients are more likely to be incredulous than impressed. Their unarticulated question is likely to be “Is it possible that your firm can really be that good at everything?"