Let’s make strategy great again
With the rapid rise of Agile methodologies, now spreading far beyond the original intent of managing a technological product development team, a strategy has sometimes become something of an unfortunate afterthought -particularly in the world of digital transformation. It’s still surprising to me, how few leaders understand what a strategy is, let alone how critically important one is. Most recently, I’ve seen it confused with finance, culture, and goals. But the most common problem I’ve observed is the total abdication of strategy, which is in itself an elegant strategy -for failure.
So, what is a strategy? In the context of a business, it’s a plan of action, a playbook, or set of policies designed to achieve significant goals. That word ‘significant’ is essential, no pun intended. You don’t need a detailed plan to get lunch, though my favorite strategists usually have one. However, you do need a well defined and documented approach for becoming the most successful business in your category. “We just need more sales” isn’t going to cut it, because this leaves open all possibilities.
In fact, repeating “more sales, more sales” like some new-age mantra, in the absence of any other information, could be downright detrimental. The obvious question being, what kind of sales? Should expand geographically, diversify our products, and sell direct-to-consumer? Any of these (and more) may be excellent ideas -or the business equivalent of committing Seppuku, without all the honor restoring benefits.
The adage that it takes money to make money is right. Chasing the wrong kind of business will end up being far more costly than the cost of sale, in the long run.
“A great strategy is every bit as much about what not to do, as it is what to do.” -Me
So, we’ve established that a strategy is still a critical aspect of a business. Let’s explore how to make it great again.
Understand your business
The first step on the path to a grand strategy is to develop and document a detailed understanding of the organization, and how it makes money. Depending on the size of the organization and your place within the org chart, you may already know everything about the business. If that’s the case, then document it all. This knowledge is an asset and shouldn’t be locked in one person’s head, even if they are the CEO.
At a minimum, I like to pursue answers to the following questions:
- Who are our customers?
- Who are our partners?
- What channels do we leverage?
- How much money do we have?
- How much do we earn a year?
- From where does our money come?
- What do we spend it on?
- What are the activities that make us money?
- Who and what are our essential resources?
- What’s the history of the organization, at a high level?
Once I’ve gathered all this data, I like to pull together notes and a quick mind-map to graph it out. All of this is leading up to a formal, documented strategy, so it will be quite useful to have all the inputs cataloged and summarized for future reference.
Understand your customers
Or, as I like to say, develop a deep and meaningful understanding of your customers. Seem to intimate? Forrester refers to it as becoming ‘customer obsessed,’ and I think that’s a reasonably accurate description of what it takes to become a truly customer-centric organization.
For our strategy, it is necessary to understand who the customers are, when, why, and how they interact with the brand, and what motivates them to act. If nothing else, developing a comprehensive understanding of our customers and what they need will make it a lot easier to prioritize the activities on our strategic roadmap later on in the process.
To develop this deep and meaningful understanding of our customers, I’ve created a specific process which is too lengthy to go into here in detail. Presently I’m going to create a presentation with the process and publish it under a creative commons license. At a high level, it includes research and a series of workshops and stakeholder interviews. The product of this work comprises empathy-driven personas and customer journey maps for all the critical journies like the path to purchase.
Understand your market
Although this is the third and final pillar of my strategy to make strategy great again, it is indeed not the least. In fact, this area itself has three components:
- Understand your competitors
- Understand market trends
- Understand other important trends
When done right, the process of understanding competitors includes a detailed, competitive benchmarking study which combines qualitative and quantitative analysis. I like to create comparative matrices for things like product features, digital presence, and brand attributes and then run as many people as possible through a survey to measure how the comparators rank against one another.
When it comes to market trends, it is critical to know whether you’re in a growing or shrinking market. Other patterns may include new technologies that impact your customer’s experience like AI. Or changes in the way the market is structured. For instance, is there a disintermediation trend? How will this impact your go-to-market approach?
Pull it all together
In the end, the purpose of all this work is to gain knowledge. However, if you can’t share it with others, that knowledge is next to useless. Particularly when it comes to decisions that could have impact measured in millions or even billions of dollars, depending on the size of your organization.
The approach I follow with all this information is to create two deliverables. First, I write a detailed report that explains my methodology, detailed findings, and go-forward recommendations. I also like to layer in predictive models that demonstrate the likely economic impact of doing nothing compared to what we can expect in each scenario based on the changes I’m recommending.
After creating my detailed report, I always follow it up with a presentation that communicates the high-level findings, recommendations, and impact predictions. If everything goes great, you’ll get an opportunity to present your strategy to those in a position to make decisions. When that happens, it’s a bad idea to walk into the room without a presentation to walk through during the conversation.
Finally, I always like to wrap it all up with a roadmap that leans forward into the sequencing of events that will be necessary to complete, should the plan be accepted. A strategic roadmap should intentionally be high-level. Much detailed work is needed to create the real project plan, a deliverable best left to professional project managers, solution architects, and engineers.
So this is my approach to strategy. I’ve followed it multiple times over the last few years to create and present to C-Suite executives in globally recognized brands with success. That said, there are as many ways to develop a strategy as there are strategy consultants and I’d love to hear your feedback and learn how you do it.