Can You Say What Your Strategy Is?
David J. Collins & Michael G. Rukstad
* Executives cannot articulate the objective, scope and advantage of their business in a simple (35 word) statement.
Supported By: * Leaders assume that strategic planning process will be communicated succinctly and ensures success.
Proposed Solution: * Leaders must draft a simple, clear, succinct strategy statement that everyone can internalize and use as a guiding light for making difficult choices.
Arguments For: * Well-understood statement of strategy aligns behavior with the business. * It allows everyone in the organization to make individual choices that reinforce one another. * You know what you’re trying to create * The essence of the strategy can be communicated to and internalized by everyone in the organization.
Michael Porter * Suggests the essence of strategic choices is different than the relentless pursuit of operational efficiency. (HBR November – December 1996).
Elements & Structure of a Strategy Statement: * 3 Components of a good strategy statement * Objective – The statement begins with a definition of the ends that the strategy is designed to achieve as well as a time frame for reaching it. * Scope – (aka domain) – the boundaries beyond which the company will not venture – what is the landscape in which the firm will operate? * Competitive Advantage: The essence of your strategy – * IE. HOW are you going to reach your objective? * HOW is your business different than your competitors? * Has both external and internal benefits: * External: A value proposition that explains why the targeted customer should buy your product above all the alternatives * Internal: Your competitive advantage also is a description of how internal activities must be aligned so only your firm can deliver that value