You Know You’re Clear on Strategy When...

‘If I had the key members of your executive suite all in the same room, would they all be able to articulate the essence of your business strategy clearly and consistently?” I asked the executive vice president of strategy.

“Probably not,” she replied. “But I do know we need a new one, because the current one isn’t working.”

I hear this quite a lot. It’s fine to want a new strategy, but it doesn’t make sense to move to a new strategy if you’re not completely clear about the current one, because formulating a new strategy starts with defining a strategic problem culled from the current strategy.

You know you’re clear on strategy when you:
• Know what it means to win with customers
• Know what it means to win against competitors
• Understand the dimensions in which you’re able to win—with customers and against competitors
• Know who your key customers are
• Can describe your customers in a single sentence
• Know the channels through which you serve your customers
• Know your most winning product or service
• Know all the regions in which you offer that product or service
• Know the stages of production in which you compete
• Know where you participate along the value stream, relative to competitors
• Have consensus on whether you are basically broad or basically narrow in your approach
• Understand your unique competitive advantage
• Know exactly why customers choose you over the competition
• Know whether your competitive advantage is either low cost or differentiation (not both)
• Understand how your competitive advantage is linked to where you play
• Know the key strengths and activities that bring your strategy to life
• Understand which of your strengths are superior to those of the competition
• Know which of your strengths are most relevant to customers
• Understand the systems that give rise to and support your capabilities
• Have a method to clearly gauge the success of your strategy

Now, allow me to add a bit of separation and categorization to these 20 items, and you’ll see the Roger Martin Playing to Win (Harvard Business Review Press, 2013) strategic cascade appear. I've adopted the framework both personally and professionally, and use it in just about every activity for which I want to achieve success, from biking to business.

What is our winning aspiration?
Know what it means to win with customers
Know what it means to win against competitors
Understand the dimensions in which you’re able to win—with customers and against competitors

Where do we play?
Know who your key customers are
Can describe your customers in a single sentence
Know the channels through which you serve your customers
Know your most winning product or service
Know all the regions in which you offer that product or service
Know the stages of production in which you compete
Know where you participate along the value stream, relative to competitors
Have consensus on whether you are basically broad or basically narrow in your approach

How do we win?
Understand your unique competitive advantage
Know exactly why customers choose you over the competition
Know whether your competitive advantage is either low cost or differentiation (not both)
Understand how your competitive advantage is linked to where you play

What capabilities do we need?
Know the key strengths and activities that bring your strategy to life
Understand which of your strengths are superior to those of the competition
Know which of your strengths are most relevant to customers

What management systems must we have?
Understand the systems that give rise to and support your capabilities
Have a method to clearly gauge the success of your strategy

Once you’re clear on your current strategy, then (and only then) can you talk about the most troubling areas of that strategy, and begin to contemplate a new one.

In future columns I’ll walk you through just how to craft a new strategy.

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