Suddenly in Charge of Strategy
As you rise up the ranks of any organization your ability to lead strategy development becomes increasingly important. You may be responsible for setting the strategy of the entire business, a particular area of a business, a function or simply your own team, but whatever the level of the organization you’re leading, the approach to strategy is fundamentally similar.
Before telling you what strategy is, it’s worth pointing out what strategy isn’t: planning. Strategy and planning are not synonymous terms, they are very different, but related activities. Planning is about the allocation of resources over to deliver certain results within a certain time. Strategy, on the other hand, is about setting the direction for the organization and providing a framework for ongoing actions and decisions that will help you deliver your objectives.
So how do you set strategy?
One of the key concepts in my new book, The CEO’s Strategy Handbook, is that of The Strategy Arrow. Like an arrow, a great strategy is fast, direct and has cut-through. There are four key elements to the strategy arrow:
1. Your #1 Goal. The point of the arrowhead is your top goal. I wouldn’t be at all surprised if your organisation and your team are drowning in goals and targets, but can you articulate which of your goals is the most important? Once you determine your #1 goal the rest of your strategy process becomes a lot simpler. Here in the UK, for example, Sky TV (the sister company of Fox TV) set itself a #1 goal of growing its number of subscribers from 6 million in 2005 to 10 million in 2010. The goal gave the business the focus to identify which initiatives to pursue and which to put on the back burner, and helped it to dramatically accelerate growth .
2. Where You Play. Supporting the very tip of your arrow are the two wings of the arrowhead. The first is ‘where you play’ or the scope of your business or team. This means that you must articulate your target customers, your products and services, the channels by which you reach your customers and your geographical reach. You should describe your current scope and playing field, but also define what you wish your playing field to be in, say, three years’ time. Apple transformed its business once it had redefined its market from ‘personal computers’ to ‘personal electronic devices’ (including iPods, iPhones etc.), and Intel saw a similar step-change once it changed its playing filed from memory chips to microprocessors.
3. How You Win. The second supporting wing of the arrowhead is deciding how you will win. You have five generic options: you can be (1) a product leader (Nike, BMW, Apple), (2) a cost leader (Ryanair, Aldi, Primark), (3) a convenience leader (McDonalds, Tesco, Dell, Amazon), a (4) service leader (Singapore Airlines, John Lewis), or (5) a solutions leader (IBM, McKinsey). The key point here is that you must choose. Each of the five leadership options carries with it certain trade-offs. McDonalds, for example, have chosen not to have the very best burgers in order to have widespread distribution, and Singapore Airlines’ commitment to service means that it cannot offer the low fares of some of its rivals.
4. Agenda For Action. The shaft of the arrow is your agenda for action, comprising the handful of key objectives that will deliver your #1 goal, create your playing field and enable you to lead and win. For example, I have recently worked with the top team of a leading UK retailer where we have identified four key objectives: (1) Expanding the number of stores; (2) Delivering a market-leading multichannel offer; (3) Growing the number of exclusive ranges and brands; and (4) Offering new product categories. Over time, the initiatives within each of these objectives will change, but the agenda will stay the same, bringing clarity and consistency across the company about its direction and how the goal will be delivered.
A strategy is not a plan. By focusing on these four strategic elements you will set a clear and compelling direction, enabling you and your team to dramatically improve performance. Good luck!
Stuart Cross is the president of Morgan Cross Consulting, where he helps clients including Avon Cosmetics, GlaxoSmithKline and Alliance Boots to dramatically accelerate growth. His new book, The CEO’s Strategy Handbook, is out now and available on amazon.com. You can find out more by visiting his website at www.morgancross.co.uk.
© Stuart Cross 2011. All rights reserved.