For most companies, strategic planning season is in full swing. We dig through vast amounts of data, meticulously craft a huge amount of PowerPoint slides and attend dozens of meetings, all of which will culminate in refining our strategy for next year.
For many organizations, this has become a predictable cycle. A sort of rinse-and-repeat where the output usually culminates in incremental changes and tweaks that are aimed at resolving either areas of weakness or taking advantage of new and emerging opportunities.
In a fast-changing world where a competitive advantage often disappears in less than a year, the big risk with a rinse-and-repeat method to strategy is rigidity. If we create our strategy within the same confined box that we always have: “Our Industry, Our Customers, Our Competitors, Our Partners, etc.”, our best results will likely be incremental, and that, arguably, no longer suffices.
It is time to view strategy differently. As more fluid, more customer-centric, less industry-bound exercise and as a method to truly evaluate new business opportunities, executable ideas, and the skills and capabilities needed to execute those ideas.
But before we dive into analysis paralysis, it is important to first revisit some basic questions. Questions that can elevate our thinking beyond current constraints and incremental motions. Start your planning process with a simple session where you strive to answer some of these basic questions, allowing people to come out of the day-to-day and apply a different lens to the business.
As with any session, it is important to set the context. Go for an open discussion and volume of ideas and opinions rather than quality and restraint. It isn’t necessarily a session where there’s a predictable output or where anything in particular will get solved. It could, however, lead you down to some “aha” moments or at the very least, create common ground in terms of how your leaders and executives see the business and where it is headed. Here are the eight questions:
Who is your customer?
It’s hard to conceive that the people you sell to and collect revenue from may not be your primary customer. Seth Godin puts a great perspective on how this discussion might go.
What job is the customer hiring your product to do?
We’ve been taught that they key to success is to understand your customer. Understanding the customer turns out to be the wrong unit of analysis. You really want to understand what causes the customer to buy your product and pull it into their lives. What causes us to buy a product is because we have a job to do and we’ve got to go out and find something to buy to get the job done.
With that in mind, what is your value proposition?
Value proposition = why customers are hiring you to solve what job + your unique abilities as a company
What our your distinctive capabilities (how the value proposition is delivered)?
Today’s market leaders are recognize that value is created by their distinctive capabilities: what they can do consistently well. A recent article in Strategy & Business called The New Supercompetitors suggests a great way to by which to frame your capabilities and align them to your value proposition.
What is changing?
Everybody is talking about change. We know change is happening around us, but very few have crystallized what it is. What are the trends impacting your space?
What are customers asking for today that didn’t exist three years ago?
Building on the previous question, put on the hat of your customer and outline what they are asking for, or expecting today that they haven’t in the past.
What is the gap between you and your customers today and in three years?
The reality is that people are changing faster then organizations. Companies are experiencing or anticipating pain based on a growing gap between themselves and their customers. It is mostly never a good idea to focus your efforts on closing the gap that exists today. By the time you’re done closing the gap, your competition has already leapfrogged you.
Which industry are you in?
This may seem like a very straightforward question, however, it’s anything but straightforward. One of the core premises of strategy is based on the thinking of Harvard Business School professor Michael Porter, which essentially assumes your competitors today will be your competitors forever and your industry focus will remain consistent. However, even Porter himself admits, can be a fatal mistake. In today’s environment, where industry lines are quickly blurring, this can blindside you.
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