5 Ways to Tell If You're Lying to Yourself About Strategy
by Tim Berry, Guest Blogger
- Created: November 16, 2010, 9:00 am
- Updated: March 2, 2012, 8:00 pm
Reality check: how many times have you eaten at a restaurant whose strategy was high end and delivery low end? How many times have you dealt with a business preaching customer service that did;t really offer you any? How often do you run into a business whose strategy aims to please, but its business, the people in it, and the decisions they make, do-t really aim to please?
Tha-s all about strategic alignment, which is a nice business-like way to talk about actually doing what you say yo're doing. Not just talking about strategy, but also, doing it.
For example, I once consulted with a computer store that wanted to focus on small businesses instead of walk-in computer hobbyists. At strategy meetings they agreed it was all about high-end service, installation, and becoming allies of the customers. But then they went back to work, back into the routine, and did everything exactly as they always had, with no changes.
With strategic alignment, they added a big service desk and had technicians wear white coats. They bought vans and sold products with installation bundled in. And they trained their payables person to ask clients why they were late, which turned up some additional installation problems.
The strategy made no difference -- that is, until they implemented it.
With that in mind, 'd like to suggest five questions you can ask yourself about your own strategic alignment.
1. Does your team understand your strategy?
This is't just a big-company issue, surprisingly. 'm amazed how often even in the 10-person company, sometimes even when there are just the two or three of you, the strategy is just lip service to some business buzzwords. Do the words (or slogans) mean the same thing to everybody? Is it obvious how the strategy affects daily business, your website, your pricing, your choice of products or services to offer, and your relationship with your customers?
In the computer store example, they had to rearrange the people and products in the store and deliver services companies needed. The payables clerk, the trainers, and the support people had to understand the new strategy. Not just the upper management.
2. Does your effort match your strategy?
Avoid the trap of strategy that lives only in meetings and business plans. Make it strategy that drives your business. Since strategy is focus, start watching where the energy goes after the meetings are over. Watch what you do all day every day. Does your daily business match the focus you put in your strategy?
If you do't think about it, sometimes you and the people around you attend to the parts of the business you like, that yo're most comfortable with, rather than the parts of the business that are going to have the most impact on strategy. Be honest about it.
In the computer store example, they had to put less effort on the retail store and the boxes and their prices, and more on outbound selling, seminars, installation, and training.
3. Does your spending match your strategy?
True, realistically, yo're still going to pay to get the wastebaskets emptied and the floor cleaned regardless of your strategy. But a lot of your spending should show the same focus as your strategy. Think of your marketing activities, for example, and look where your marketing dollars get spent. Then look at how you generate the product or service you sell, and ask whether that spending matches your strategy. Do you buy high-end inputs to make a high-end product? Do you pay your people high-end salaries to match the high-end service the're supposed to offer?
4. How can you tell if it's working?
Do you have units of measurement available, so you can tell whether your strategy is working? We call this metrics. In the computer store example, they looked at the demographics of customers (individuals vs. companies) and the texture of the sales (installation, training, and support, multiple units, compared to just take-out boxes with computers in them.)
Put yourself a few months into the future: how will you know that your strategy is working?
5. What would your customers say?
The ultimate test of any company's strategy is in the market. Are the people you want to reach getting the message? Would the customers, if asked, understand your distinctive differences the same way you do in the strategy meetings? Word of mouth is extremely valuable. What do people say about you online? Does it match your strategy?
*Not a government website.
About the Author
Founder and Chairman of Palo Alto Software and bplans.com, on twitter as Timberry, blogging at timberry.bplans.com. His collected posts are at blog.timberry.com. Stanford MBA. Married 44 years, father of 5. Author of business plan software Business Plan Pro and www.liveplan.com and books including The Plan As You Go Business Plan, published by Entrepreneur Press, 2008.
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