(The above answer to my question, “Could you define the word Strategy?” came from one of Asia’s top public company CEOs…he wasn’t laughing. He told me I could tell this story but not his name
The truth is most people in business haven’t got a clue what differentiates a ‘strategy’ from a ‘plan’…. or from a ‘goal’ or from an ‘objective’.
I am regularly told by executives ranging from Directors of huge public companies down to young entrepreneurial start-ups :
“Our strategy is to increase turnover by 10%”
“Our strategy is to undercut our competitors”
“Our strategy is to ensure that all our sales staff receive two week’s off-site training per year”
Or even as one London based client told me “Our strategy is to have no strategy”.
None of the above is a strategy!
Not ‘understanding’ the difference between having a real strategy and having a strategy in name only, results in large High Street chain stores believing that all they have to do to profit like a ‘Pound Store’ is to cut their prices and sell more packets. Or large airlines, in competition with highly profitable Easy Jet or Ryannair, to come up with a decision to cut some of theirs. Or to state that: “Our sales strategy is to get everybody working harder …knocking on more doors. That’s what we’re going to do! ” The results of these misguided ‘strategic change’ ideas is usually somewhere between non-existent and suicidal.
To set a strategy is to take into account the entire environment, your corporate desire, market atmosphere, audience, current situation, future assessment and have each item backed up with hard detailed facts and evidence. ‘Strategy’, demands that you can answer questions like: “ ‘Double your profit in the next 12 months eh’?…..What makes you think you can?” (And the answer isn’t “Because we did it last year”)
“ You say you will, increase your ROI by 10%’ …. Compared with what?’ “
Your strategy is in fact your whole business philosophy .
And it is from this alone that springs your action plan, your goals and your objectives.
To start you in the right direction so that you can start to create a real ‘business strategy’, here are eleven questions you must be able to answer in some detail.
1) What is our raison d’etre? What problems does our business solve for our audience? What outcomes and solutions do we, (our people, our company and our product or service) provide? What makes us different from our competitors?
2) Who are our target audience? Describe in detail (The right answer isn’t, ‘everybody’)
3) What do our target audience want? What major headaches nightmares issues and problems do they typically have that we can solve? What will be the knock-on effect of not solving them?
4) What do we want? In most markets we can chose to be somewhere between The Rolls Royce or the cut price runabout. There is profit in both but the ways of going about achieving it are different. So what will make us happy to get up and deliver each day?
5) Are items 3 and 4 (above) congruent? Is what we want compatible with what our audience wants? Is there a good fit between our business and theirs? (Don’t invent answers that look good…you’ll only be kidding yourself). If what they want to receive and what you want to deliver are different you have a strategic problem. [ e.g. The company I employed to do my gardening at home were excellent gardeners but the owners were more interested in proving that they were ‘right’ in any minor dispute than preserving my custom. They are no longer my gardeners]
6) How do our audience know about us? What do we do to make sure we are in the eye of our target audience in every possible way? [e.g Is our website an exercise in corporate vanity or an effective problem solving advertisement? The big test: Would a Martian landing for the first time in front of our home-page know in 14 seconds (average surfing time)what problems we could solve for them?] If your answer begins with, “ Well…errr…….” You have a problem.
7) How do our prospective audience contact us? The complete absence of (or cunningly concealed) phone numbers and email addresses on marketing materials is alarming. The speed of reply to enquiries even more so.
And FINALLY, now that you have a lot more strategic information:-
8) What is the current market for what we offer?
9) What is the future market for what we offer? (And “Business as usual”.. is not a credible answer)
10) So (based on the above) how are things changing?
11) So (if this is how things are) where are we going?
This is not the definitive: “How to Really do Strategy” book. Answer each question honestly and don’t worry if you duplicate ideas or add things that I’ve missed.
It’s just a way of showing you how to start coming up with an effective ‘thingy’.
“Europe’s Best Sales Trainer” : [Voted by ‘Sales Innovation Expo’ 2015 and 2016, Excel London.]