The Ride, Part I: The Future Trends and Strategy
Magellan’s strategy was clear and simple: reach the Spice Islands via circumnavigation in order to secure spice trade for Spain and adventure for himself. His plan? Sail west, with prevailing winds. Seek (by trial and error) a channel through the enormous roadblock known as South America. Maintain knowledge of present position and plan for future direction.
It is safe to assume that during the two-year trip, Magellan and his crew constantly assessed this plan’s rationality and feasibility. It is also safe to assume that Magellan did not need a wide-ranging measurement rubric to track each strategic move. Here lies the difference between the Renaissance explorer and the Information Age manager.
To develop a business strategy, corporate leaders must identify and understand the future trends in their industry that will impact the demand for their products and services. The leaders need to create a database of activities. The Trends Analysis should result in a grouping of converging trends. These are the opportunities for future growth.
So how do the leaders drive the organization to succeed? They create a competition strategy. Michael Porter defined competitive strategy in 1996. “Competitive strategy is about being different. It means… choosing to perform activities differently or to perform different activities than rivals.” “Strategy is making tradeoffs in competing. The essence of strategy is choosing what not to do.”
Further strategy is a unique way of creating and delivering value that pervades the entire organization. It is your enduring reason for being that makes your customers want you to flourish and thrive. It is what you do that creates value and makes you hard for others to imitate.
SI’s definition of business strategy … an integrated and align set of strategic initiatives (tactics) all working together to create unique customer value and thereby unique customer perception.
Once armed with a well-framed strategy statement, a business must hit the road. Beat the pavement. Spend deserved time and resources creating a detailed, albeit flexible, roadmap that takes you from here (current reality) to there (objectives).
Again, commitment to adaptability is vital. Strategy, write Kaplan and Norton, “must reflect the structure of the organization for which [it] has been formulated.”
Both—the structure and the strategy—must be persistent but flexible enough to facilitate innovation and market adaptation. A strategy designed to propel a company toward an ambitious goal cannot be represented by a stodgy table or bar graph. The strategy map’s structured chaos perfectly captures the paradox of direction and flexibility that characterizes successful strategy. For this reason, Strategy International consultants help businesses create execution plans, aphoristic visual representations of the whole strategy process from confronted reality to trends, objective to initiative.
Next time we’ll continue this discussion with part 2 of “The Ride: Implementation.”