Strategy — Inside Out

We often think of strategy as an outward venture detailing what products and markets a business should expand into. However, we rarely see strategy as an inward exercise of growing capability from which opportunities will be born and then delivered.

Active Knowledge Question:

If you look at your latest strategic plan, what actions are listed?

What is Strategy?

Strategy in its purest form is how a business intends to compete to fulfil its purpose and attain its vision.

Purpose is never about profit and should only ever be about fulfilling customer needs. Profit is only one of the outcomes achieved when a business fulfils its purpose well.

Vision is a destination. A quest to reach an outcome which is compelling, challenging and hopefully a bit unrealistic. It draws people together with a passion and energy to reach the summit that the vision has set.

Motive in business is always about outcompeting everyone else in fulfilling customers’ needs to a value no others can achieve. This is achieved by competing against yourself.

Strategy is a dynamic positioning of the value a business can deliver to its customers and an ever-improving value.

Strategy is limited only by the competitive fitness (the capability) of a business. And that competitive fitness resides in the combined talent and effort of every person who works within and with a business.

Leadership’s strategy role is not to create an activity list of products and markets they would like to grow into but rather to muster that combined talent and effort, focus it on purpose, direct with motive and entice it through vision.

Strategy is how you intend to compete.

Delivery

It is well recognised that strategy is nothing until it is delivered. And many strategic plans fail as they are never delivered. This is a failure of the process of creating strategy, often evidenced through a ‘command and control model’ where strategy (action) is formulated and then passed down the line to be implemented.

Formulation and implementation are one process, cannot be separated and must involve participation and contribution from the coalface of the business.

Deliberate (formulated and planned) strategies must adapt to the marketplace in which they are applied. The language of emergent and unrealised strategies captures the reality of planned strategies evolving as they are applied. And real-time learning permitting something not recognised at the start becoming unique opportunities that are captured and won.

Effective delivery requires a team that believes in its purpose, vision and lives the motive to compete. And who are empowered to take what was an intent (planned strategy) and bring it to life in the real competitive marketplace in which that business competes.

Capability

In business, there is often a failure to invest sufficiently in capability. Not just technical capability relevant to the domain in which that business competes, but the capability to ‘get things done’.

There is an old paradigm in the world of strategy that ‘structure follows strategy’. Once you have formulated your strategy, you then mould your organisational structure to deliver that strategy. This is a nice theory on paper and in the world of ‘command and control’ thinking, but it rarely happens in real life.

Strategy is restrained and must be guided by structure. It serves no purpose to craft a strategy that the organisation cannot deliver. And bringing an organisation to the point where it is capable of delivery may be no easy task, and sometimes simply unrealistic.

Strategy always commences with an understanding of organisational capability.

And strategy always, and firstly, addresses and is led by an investment in organisational capability. However, this rarely occurs as the strategy-makers are well removed from the front-line capability that exists in an organisation.

A prime goal of strategy is always to build an organisational capability that is adaptable, evolving, self-learning, self-directing and always competing at its edge and beyond.

To Compete

Businesses are made to compete. To outcompete everyone else in their chosen markets by delivering a customer value that no one else even comes close to or thought of. They are made to lead their markets with everyone else chasing them.

World-class athletes don’t make a list of the medals they want to win and then go out and try to win them. They train and train and train. They discover and invest in their unique talents and skills that they believe will allow them to outcompete others and win the competitions that they set as their vision.

They build a team around them to support them on this journey and strengthen their physical, mental and emotional capacity to compete. Then, when they step into the competitive arena, they focus on their skills and talents and seek to bring an absolute focus to the application of that ability. And if they can sustain that effort, they believe they will win.

But they also know at times that that effort may not be sufficient; however, it does not dissuade them from giving 110% and doing it all over again. Motive is what provides the renewed energy to continue to compete.

In every business, there exists a competitive engine that sets the floor and ceiling to the competitive strength of that business. It operates 365–24–7, whether recognised or not by leadership.

Strategy must recognise this engine and invest in strengthening it, as it determines competitive strength, capability and delivery.

Strategy is about developing an organisation’s ability to compete and, from that competitive platform creating a list of markets and products to step into is natural.

Strategy should always look inside at the organisation’s ability to compete to its fullest potential and invest and compound on that potential. Do this, and all else will follow.

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All the best in the success of your business,

Richard Shrapnel

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