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Review: Can You Say What Your Strategy Is? (HBR)

August 26, 2011

Books, Strategy Concepts

 

Today I rediscovered a favorite article that really sits well with the StrategyDIY philosophy of simplifying business strategy.  I have linked to the summary on HBR.org at the end of the post (FYI: Not an affiliate link).

I can tell you, it’s nice to find those like-minded souls out there that share some of the StrategyDIY thinking.  Maybe it’s just comfortable.  Anyway, here’s my take on the article with some key components pulled out for reference.

Summary

The essence of the “Can You Say What Your Strategy Is?” is that the most successful business strategies are clear and succinct.  And yet this characteristic of business strategies is rare; uncommon at best.  Through their experience, the authors found that most executives cannot summarize their company strategy and are unsure if their colleagues or down-line leaders understand in the same way the senior executives do.

I discussed simplicity in business strategy statements and the benefits that derive from that in a post earlier this week.  Found here.  And much of the same principles are reflected here in the HBR article.

Key Take-aways

  • Vision and Mission are all well and good but are the least specific and most likely to be common within an industry.  True differentiation for a company is the strategy statement – this is what sets companies apart.
  • “Executives assume that the initiatives described in voluminous documentation . . . will ensure competitive success”.  The title of one of the other posts here, “How many pages . . .” tried to hit on this same piece of advice.  There is danger in assuming that a mountain of detail or pages of presentation or documentation will result in strategic alignment and action.  In my experience, that mostly results in more cabinet space in the office.
  • “A well-understood statement of strategy aligns behavior” and “creates a guiding light for behavior”.  I think this is really important and some of the past discussion in our forum focused on this conclusion; this concept of aligning behavior or allowing priorities to be set and decisions to be made is just so important to actually getting a strategy executed.  But this type of benefit doesn’t have to be just for huge teams in big-business.  A clear strategy statement can help small teams or even a team of one (the owner)!  When the strategy is clear, the decision-making is easier.
  • There are 3 components to a good strategy statement, according to the authors – objective, scope and advantage.  Simply:
    • Objective:  The specific ‘ends’ or outcomes desired from the strategy and the timeframe for achievement (familiar with SMART goals?)
    • Scope: The landscape or segment where the company will compete (e.g. customer)
    • Advantage:  What your business will do differently or better (clarity about what makes your company different)

I have proposed also 3 components – Situation, So What?, Actions.  Believe it or not, the formats are not so different and will result in very similar statements of strategy.  Essentially, what you have in both formats are a place for the customer or market [Scope or Situation], a place for results [Objective or So What?] and a place for priorities/action [Advantage or Actions].  The same 3 components, though mixed up a little and called different things, can deliver a simplified strategy statement.  Pick the one that speaks to you.

  • Lastly, the authors address the “how to” component of building the strategy (or strategy statement).  As you might expect, there is a list of “to-dos” that encompasses the creation of a strategy.  Things like: customer needs, segmentation, unique value, etc.  Honestly, this is where the simplicity message breaks down.  We are asked to execute a “rigorous, objective assessment of the firm’s capabilities . . .”.  If you have read some of the blog posts here, you’ll know there’s a different way to start.

Read the summary and buy a copy if you like then share you thoughts on the article below.

Can You Say What Your Strategy Is?

by David J. Collis, Michael G. Rukstad
11 pages.  Publication date: Apr 01, 2008. Prod. #: R0804E-PDF-ENG


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