Strategy

Over dinner on Sunday some one asked me; “What new course have you got for the times?”

Ah! The downturn discussion! I thought about this and chimed “something on concentrating on your core business and market your way forward with strong selling points and customer service”.

Somewhere in the back of my mind a lamp flickered and lit up the remarkable story of Andrew Cook who in the late 1970s early 80s transformed William Cook, a well established family manufacturer of steel castings, into a market leader when all was against him.

At that time the economy was dismal, dark and uninviting. Output in the industry had been falling for a number of years. But Cook on taking over the company went completely against the trend an invested in increased efficiency, quality and capacity in the least value segment - all at a time when capacity was double the amount of industry sales. Rivals thought he was mad. Indeed conventional thinking would have dictated that Cook milk the business and leave the industry or go into a higher value and differentiated niche.

Remember too that Cook’s didn’t have the image of a Mercedes or an IBM amongst its customers. Neither was it a technological leader, nor did it possess some secret process to guarantee extra income. Nonetheless, Andrew Cook backed his intuition. In a few months his efforts began to yield results.

His investment in a hostile environment transformed the business. Within a few years sales had risen 10% against industry losses. He was the first to invest in BS5750. Within a couple of years he had acquired two of his major competitors and by the ‘90s he had become the market leader.

“What did he do?” you ask. It’s really quite straightforward. He understood his customers. He recognised the value they wanted. His improvements saved customers money which naturally increased demand for his product. Thus Cook generated a double advantage - higher value and lower cost.

When others saw what he had achieved they changed too. They sought to catch up and invoked intense battles … but that’s another story.
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I mentioned last time that any effort to craft strategy must be aimed at creating a UNIQUE STRATEGIC POSITION. I also mentioned that current practices are inadequate. What is required is a dynamic approach that replicates the success of strategic innovators.

Such an approach is to be found in this THREE-Fold framework of strategy formulation that concentrates on:

1. Customers and value; the issue here is to question how to achieve full value and service for customers – something that strategic innovators understand – the majority give the area lip service ONLY.
2. How we respond to customer demands for value with a proposition based on our market mission, distinctive capabilities, strategic assets and our ability to differentiate against the competition instead of unimaginative ‘me-too’ responses to every problem and opportunity.
3. Building an organisational environment that supports creativity and inventiveness, excellent relationships with customers, staff, collaborators the development and implementation of our strategy.

More next time

Best wishes

Andrew Pearson

If you’ve been following my earlier posts on business strategy you might be asking how strategic innovators achieve the results they do.

I believe there is only ONE system to formulate a superior strategy and implement it. It’s not “my” system, it is THE system. Many use the same basic system. Some do it better than others. Some understand it better than others. But, at the end of the day, it’s the
same system.

I call the system the “The Complete Purpose Driven Strategy System”, a SEVEN Step Guide to Creating a UNIQUE STRATEGIC POSITION for Your Business.

I’m going to explain this system to you over the next few posts. And along the way, I’ll present each part of the system and share some insights that are exclusively my own.

Each post will show you why creativity and innovation is more important in strategy formulation than analysis and process. And if you’re serious about differentiating your business they will reveal how to invent fresh strategic positions and leverage more success from your current strategies.

A fuller account of the ‘SEVEN Step Guide to Creating a UNIQUE STRATEGIC POSITION for Your Business‘ is being offered as a free e-Book download for a limited period from andrew@real-results.org

Best wishes

Andrew Pearson

What companies like Apple, Starbucks, Dyson, Virgin, Amazon.com and even Skoda - and many businesses like them - have shown us, is that a superior strategy is as much about being simultaneously in tune with customers as it is with being two steps ahead of competition.

Should we question conventional strategizing processes?
Yes we should! For the most part I don’t think it’s too much to say that what really characterises the pursuit of these goals today is, alas, superficial strategy formulation - a judgement based on contemporary observation in the light of what successful businesses have achieved.

Why is this? There are several reasons; a preference for the status quo, inadequate relationships, poor processes and a general lack of creativity are but a few. But one stark fact stands out. It’s this; we are told WHAT to do to strategize but not HOW to strategize in practice!  

And why is this, you may ask? Because of the dubious nature of conventional strategic formulation, and its application, I would answer.

The character of conventional strategic planning
The structures and frameworks taught by most business schools, consultancies and training organisations are too rigid. They analyse the past to death and prescribe the future through bifocals based on 4-box matrices. However, the future is not contained in the ‘Boston Box’, Porter’s 5-Force Model or even a S.W.O.T - or anything like these models.

Such processes can not possibly help managers invent new and lead the way in how things are done to create value for customers and stakeholders 

Increasingly the really overwhelming competition for a company or a product does not appear from the expected and anticipated sources - the traditional ‘me-too’ competitor - it comes from someone you’ve never even heard of, let alone dreamt that they could take your business away from you.

So where do we go from here…?

I’ll tell you in my next post

Best wishes

Andrew Pearson

For further information download FREE “How to Create and Exploit a UNIQUE STRATEGIC POSITION for Your Business”

What allows strategic innovators to predict the future is their reliance on measures of BOTH ‘strategic’ health AND ‘financial’ health of their businesses.

By adding strategic measures people it’s possible to get a couple of really powerful indicators:

1. An early warning system that allows them to question things before a crisis occurs, AND
2. A means of identifying new unique strategic positions to sustain growth.

The list of strategic health measures is long, they may include; customer satisfaction, market share, changes in the industry and the company’s fit with the changing environment, distributor and supplier feedback, employees morale, strength of company culture, innovation and new products in the pipe line.

Now if we are in agreement that these pretty fundamental measures tell us a lot about business survival and success, a simple question remains to be answered, namely; what tools do we have that can help us do the job of finding superior strategies – and if we want to go further with this – how good are they anyway?

I’ll tell you in my next post

Best wishes

For further information download FREE “How to Create and Exploit a UNIQUE STRATEGIC POSITION for Your Business”

Everybody who is responsible for strategy formulation should be actively considering how to rejuvenate their businesses. In other words to seek out and be ready to allow their businesses to embark on another growth curve – and just when the new growth curve is about to peter out, find ways for their companies to rejuvenate themselves again and prepare to get on a new growth curve and so on.

Clearly, for this to happen, a company is required to adopt a questioning attitude; an approach that continually challenges the status quo – no matter how successful the business is. This would enable the business to fend off trouble before it arrives and would allow it to find address rejuvenation.

But as most managers see and follow only an upward trend line and are successful in achieving growth – and must certainly be doing something right - they are entitled to ask; “Why would we want to change? Surely no one can predict the future?” So justifying calls for action NOW on the basis of what may or may not happen now is a dangerous business?

Therefore, a related issue is for managers and business owners to identify their businesses’ position on the growth curve and hence pinpoint whether or not the moment for rejuvenation.

The difference between most people responsible for strategy formulation and strategic innovators seems to be that the latter have a window on the future, they seem to know a few years before a crisis impacts that they must circumvent it and indeed decide how to do just that!

Best wishes

For further information download FREE “How to Create and Exploit a UNIQUE STRATEGIC POSITION for Your Business”

It is incredible to think of Marks and Spencer, a company that had enjoyed a long history of growth and profitability, until the late 90s, slipping into decline.

Needless to say, the middle of a crisis is the worst time to implement strategies for turnaround – let alone planned growth. For at such periods a business lacks time, but also resources, experience and credibility to develop a new path of long term success.

It’s often said that; ‘an ounce of prevention is worth a pound of cure’. Few managers would disagree with the truth of this principle… but few actually abide by it.

The consequences of maintaining the status quo

Most business owners and managers’ start thinking about change when profits are already in decline – and worse still only start doing anything about it when things get worse!!! This has dire consequences because these companies leave yawning gaps for strategic innovators to fill simply because they fail to actively seek new positions from which to offer their customers more value.

It’s surely much more prudent to introduce new flows of cash and profit with fresh strategic positions and more exciting technologies - when in growth - before maturity hits!

I’ll tell you in my next post

Best wishes

Good morning! Hope your New Year is going well for you.

Last time we looked at the phenomenal success of Apples’ iPhone strategy. If you remember I mentioned that I’d go a little deeper and answer the question: “What does it take to develop a unique strategic position?”

Well, you may be surprised to know, research that we’ve gained from working with hundreds of companies over the past 10 years, shows that all successful superior strategies share the same underlying principles – despite their surface differences.

My argument is that by understanding these basic principles, any director, manager or business owner can use them to design a successful strategy.

And here’s another observation…

If you’ve ever looked closely at strategic innovators, you will have noticed that formulating successful strategies is a never-ending job. Just because companies like Easy Jet or Tescos have superior strategies today it doesn’t mean to say that they will be successful tomorrow!

Far from it! Tomorrow’s success is dependent on a strategy that will be superior in tomorrow’s market; and to continue to achieve that means applying the same fundamental principles yet again to craft another winning strategy once the current strategy has run its course.

Best wishes

May we wish you the best of new years in 2008! And welcome to the first of a series of posts on business strategy - starting with something that may have been a stocking-filler!

Why mention the iPhone?

Apple has said that it’s on the way to selling 1 Billion iPhones in the next few months. Judging by the news and hype (and the ecstasy I saw on a friend’s face who bought one recently) that quest seems to me to be distinctly achievable.

What’s also staggering is that Apple has muscled its way into one of the world’s most brutally competitive markets, rattling the mobile phone industry’s most dominant players by producing the No. 1 ‘must-have mobile phone on the market’.

Ever since Apple unveiled the Macintosh computer in 1984, it has become the standard-bearer of how to market consumer products.

It has transformed into an increasingly commanding force in the new digital universe by combining innovation and design in ‘got-to-have-it’ gadgets. Firstly with the iPod (which changed how we listen to music) and latterly with the iPhone (which has re-invented how use a mobile phone), Apple has achieved technological dominance.

For this reason Apple has shown us what a superior strategy based on a unique strategic position is all about.

The Secret?

What Apple shows us – and other businesses like it – is that strategy is as much about insight and vision as it is about being simultaneously in tune with customers and two steps ahead of competition.

Think about it for a moment. How many businesses do you know who have created and occupied a unique strategic position? And how many of them do you know who have actually gone on to find another one – and another – consistently offering their customers even more value?

A handful probably.

Yet such superior, and successful, strategies share the same underlying principles. Thus the principles behind Apple’s successful iPhone strategy are essentially the same as those that took Marks and Spencer to market leadership 100 years ago!!

What are these principles? Well that’s for next time. See you then.

Best wishes