Many people believe that the formulation of a winning strategy is primarily the domain of the management consultant. However, most anyone can create a winning strategy. According to Playing to Win: How Strategy Really Works by A.G. Lafley, Roger L. Martin, formulating a winning strategy consists of asking five fundamental questions.
- What is your winning aspiration(s)?
- Where should you play?
- How can you win there?
- What capabilities do you need?
- What management systems would support it all?
I believe a winning strategy originates from:
- Price/cost basis – The winner is relentless about the removal of unnecessary solution costs that allows the company the opportunity to price it comparably and enjoy greater margins or give back the savings to the consumer thereby picking up significant market share and increased profits over the long term.
McDonald’s originally beat its competition by offering a comparably tasty hamburger for half the price of any other similar dining out option. People were so enamored of the proposition that they did not mind waiting in line, having few choices and cleaning up after themselves.
- “Joy to use” basis – Others call this a differentiation or proposition-based strategy. No matter what you call it, this strategy drives you to build something so compelling and such a joy to use that people will pay higher prices. Examples are Apple, Dyson, and Nest to name a few.
Each of these companies strives to figure out the true and compelling functional and emotional needs of their customers. They build a product or service that meets the most important and least served of these needs and typically no more. Unfortunately, many products and some companies die because too many extras are added on unnecessarily and the cost burden of providing or supporting them makes the offering less attractive. (Clayton Christiansen offers some great thoughts on this in many of his books.)
For companies like Apple or Dyson, the original offering is usually quite deep and, once it has been perfected to get the job done, then and only then do they begin to go wider and find other markets and industries focusing primarily on their core competencies. For example, Apple has taken its core competencies of elegant design and user-interface simplicity to craft a unique and highly successful retail concept among other offerings.
Strategy is fundamentally about choosing what to do and more importantly what not to do. Starting from a simple A or B choice from above may help you as you start the process. What you end up with will be of your own creation but most winning strategies are later generation versions of the low cost or high-value proposition bases.
I will touch on each of these five “winning strategy” questions mentioned above over the coming weeks starting with:
WHAT IS YOUR WINNING ASPIRATION?
A winning aspiration a compelling ambition that excites your organization and guides the underlying products and processes that get you there to be meaningful to your team and customers. This powerful combination can act as a magnet to attract both customers and employees.
An example highlighted in Playing to Win describes how Olay, defined its winning aspirations as market share leadership in North America, $1 billion in sales, and a global share that put the brand among the market leaders.
GE’s Jack Welch had a simple winning aspiration to be number one or number two in any market they entered. If they could not be number one or two, they either left the market or never entered.
According to Playing to Win, when crafting your strategic aspirations:
- Do play to win, rather than simply to compete. Define winning in your context, painting a picture of a brilliant, successful future for the organization.
- Do craft aspirations that will be meaningful and powerful to your employees and to your consumers; it isn’t about finding the perfect language or the consensus
- Do craft aspirations that will be meaningful and powerful to your employees and to your consumers; it isn’t about finding the perfect language or the consensus view but is about connecting to a deeper idea of what the organization exists to do.
- Do start with consumers, rather than products, when thinking about what it means to win.
- Do set winning aspirations (and make the other four choices) for internal functions and outward-facing brands and business lines.
VISIONING
I ask most of my clients to start any engagement with me by conducting a visioning exercise, as the process can be supportive and informative when thinking through your winning aspiration(s).
Visioning is a thought experiment that puts the leadership team into a frame of mind of having already won. I ask them to pick a time in the future many years from today and to describe in writing what they see and what the future has become.
The best version of this exercise I have come across is from Ari Weinzweig, founder of Zingerman’s bakery and author. Here is a link to the Inc. article that provides a step by step process to create your Visioning scenario. In work I do with my clients we do only the 4th step with an option to do Step 3 if they wish.
START WITH AND END IN MIND
Starting with an end in mind is a tried and true adage. It applies to many areas in your business and personal life. It is especially useful when you are playing to win. After all, a journey without a destination is just aimless wondering.
I encourage leadership teams to take the uninterrupted time to think through and debate what your winning aspiration(s) is. It will be time well spent and something you should revisit often to check that it is still true and will be for the foreseeable future. If you do this and you find that industry trends, consumer tastes, technology, demographics, etc. are beginning to change, you will have time to make adjustments to remain relevant and out front.
Good luck!
Next time, I will touch on where you should play.
Be Exceptional!
To learn more about building your own One Page Strategic Plan visit https://catalystgrowthadvisors.com or contact me at bill@catalystgrowthadvisors.com.
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