What Is Your Strategy?

I have spent the past 5 weeks running Strategic Planning sessions for Corporations across North America. I credit these organizations for understanding the opportunity to create alignment, consistency and simplicity by actually having a Plan. There are a couple of realities that I would like to discuss. The first is that most organizations do not have a strategic plan and if they do it is really a budgeting exercise in disguise. Second, 95% of employees cannot state their employers’ strategy. That is a data point from a Harvard study, but I have seen it live in the past month.

I usually open up with some exercises and discussion to get aligned on what “strategy is” [or is not] and put forward a definition. With alignment on the definition, I will ask to the group of 20-30 senior leaders a confidential question. I create confidentiality by asking them to close their eyes. With eyes closed, I then ask them to raise their hand if they would be comfortable stating what their corporate strategy is today. In 5 straight sessions, I never had more than 1 hand go up. These are smart and successful leaders of organizations, so what is the challenge?

If you define strategy [as Michael Porter does] as the creation of unique and valuable position involving a different set of activities, then how would you state your strategy? Part of the challenge is that organizations tend to define their strategy by their products and/or markets the serve. “We are an industry leading software company serving the US Healthcare market.” This example may be a descriptor of who you are and your markets, but it is not your strategy. The second challenge is that we often try to differentiate based on our products features and functions, so that is how we define our strategy. This is only one element of how we are judged in our markets and this type of strategic differentiation is hard to sustain.

It goes without saying that if the leaders of an organization cannot state their strategy, then there is no chance that that the rest of the organization will be able to tell the story. This lack of alignment and consistency has a tremendous impact on planning and ultimately execution. As the old saying goes, “if you don’t know where you are going, then any road will get you there.” With strategic clarity, the development of a strategic plan with aligned Goals and Execution Priorities brings the entire organization together. It can also create simplicity through prioritization.

If you are looking to get clarity on your strategy, there is a tool and an exercise that I would highly recommend. The exercise is the creation of Strategy Statement. I have used this for many years and recently came across a great article by David Collis and Michael Rukstad. In the article they talk about the 3 essential elements of a Strategy Statement, being:

Strategic Objective– specific, measurable and time bound.
Defined Scope– product or offering, geographic location and vertical integration.
Defining Advantage– the customer value proposition and your unique activities that allow you to deliver this measurable value.

We talk about “Strategic Sequence”. The heart of Corporate Strategy is your Value Proposition, which sits at the center of your business model. Marketing Strategy and corresponding Sales Strategy are downstream and rely on Corporate Strategy for direction. This is the sequence and it is hard to have a well considered Sales Strategy without a true Corporate Strategy. In the absence of Strategy, we are likely selling based on product far too often and thus being forced to compete on price.

There is an opportunity to be far more strategic in our approach and the benefits are measurable across your company.