The Three Strategy Questions Leaders Need To Ask Right Now
As seen on Forbes
Do you smell that? That, my friend, is the smell of freshly baked, ready-to-serve strategy. This familiar aroma is wafting through the halls of many companies this time of year as diligent executives return from retreats in fancy places to reveal the results of the heavy lifting called strategic planning.
These sessions are as exhausting as they are predictable. Strengths, weaknesses, opportunities and threats are gathered and discussed; top-down and bottom-up financial models are dissected, debated and ultimately adopted; quarterly themes, key performance indicators, core values and mission statements are gussied up and made ready for annual meetings.
At these sessions, the executives might even watch a Simon Sinek video to make sure they are purpose-driven enough to matter to their millennial staff, and an outside speaker may pop in to present a new best practice.
Then there is the obligatory social time together to blow off some steam and produce some embarrassing company folklore. (“Honest. He did. You can see a picture on Facebook.”)
When all this hard work is finished, you’d think that significant changes would take place. But too often the company just keeps doing the same things, for the same customers, the same way and getting the same (less-than-wonderful) results.
As a fictional but all-too-representative executive puts after the strategy session plan is revealed: “To hell with disruptive startups. We’ve been doing fine for decades. What do they know?” Said senior company officials at _______________ about _______________ just before the ___________________. (I left these intentionally blank so you could have some fun experimenting with different words. For example, consider Blockbuster about Netflix just before the release of streaming video).
But maybe this year the outcome should be different. After all, the future is coming faster and faster and titans of industries seem to be failing more and more regularly. Perhaps all of this talk about big data, disruption, singularity and “uberization” have merit. If you agree, here are a few questions to put front and center during your next strategy session.
What are we going to stop doing?
Michael Porter famously said that strategy is the art of sacrifice. So this year before your team embarks on building the to-do list, why not start with a “stop-doing” list? Give your team permission to talk about the things your company should stop doing. This will create the time and space to work on the essential issues instead of those that are urgent or always seem to be just important enough to be distracting.
Disruptor’s tip: Ask your staff to start with ideas that would get them fired. Then really listen. Most companies have sacred cows that they protect to their own peril. These may include legacy customers, distribution models, products, services and even departments. When you give your people permission to be offensive, you will hear the most disruptive ideas they have. Remember, startups are not concerned about offending you.
How would we put ourselves out of business?
What would it look like if you rebuilt your company today from scratch? Would you sell the same products or services? Would you use the same technology and infrastructure? Would you have the same staff?
Years ago, we worked with a phone company that was competing with a new wireless provider. It is really hard to compete against a wireless provider when you have billions of dollars of wires and poles in place. What are the wires and poles in your business?
Your new competitors are asking what it will take to put you out business. The answer gives them an unfair competitive advantage––particularly if you aren’t asking it too.
Disruptor’s tip: Hire a company to put you out of business. Done right, their plan will scare the heck out of your team, offend everyone, and give you ideas about what your next competitors are about to launch.
What does our customer’s customer want?
Disintermediation is a big, scary word. It basically means drawing a straight line between a person’s desire for a specific product and service and the simplest way to get it. It is what Amazon is doing to retail. It is what Edmunds is doing to the automotive industry. It is what I call moving from B2B to B2C to BtoMe.
The person or company that best understands the customer’s customer owns the future. So if you are a business-to-business company, chances are you are losing track of who your future best customer is and exactly what they want. This puts you at risk of being disintermediated right out of business.
The solution is to build intimacy with your customer’s customer. Ethnographic research and solid segmentation provide shortcuts to good insights. This work must be done regularly because needs can change quickly.
Disruptor’s tip: Segmentation often gets a bad rap and rightly so. Too often it is an expensive way to align your current offerings with demographic profiles. (Read: It is a history report that your best salespeople will roll their eyes at.) A durable segmentation will help you look into the future to align your best future customers with the psychographic profile of the right customer. It will also size the market so you can make strategic decisions about budgeting.
Bonus question: What business could we be in?
Your company has a superhero power or two. This means that you have a valuable expertise that sets you apart from almost every other company.
Challenge your team to discuss this power and how it might be used for good, not evil in parallel markets.
Now, who wants to bake up some fresh strategy?