Strategy

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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 M. Pearson

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 M. Pearson

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

Andrew Pearson

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

Andrew Pearson

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

If your attempts to grow your business have met with sluggish results even though you have got the other result areas that are presented in this Business Growth Series in place – it’s almost certainly your MARKETING TACTICS that are holding you back and restricting you to lackluster results.

Let’s look at some of these tactics now.

Quite simply we can separate marketing tactics into two camps; “Front-End“ and “Back-End”.

You can think of “Front-End” as the first sale; the pipeline that brings new customers into the business. The “Back-End” is the product (or hopefully the series of products and services) that you sell to your customers after they have purchased your initial offering.

The question to ask now is what tactics you should use in each area? And here they are:

  • Front-End -The Marketing and Sales Activities designed to acquire new customers.
  • Back-End – The Marketing and Sales Activities designed to maximize the profitability of each and every customer relationship
  • Clearly front-end marketing is vital for your long term business success. This is why it’s so important to inject the power of marketing into your business so that you can increase the number of customers that come to your business as a continuous flow…

    I said previously that people buy for emotional needs and those emotional needs are never fulfilled. Your role as a marketer or as the business owner is to continue to exploit those needs because it’s the emotional void that creates the desire to buy that never gets fulfilled by the purchase of the product or service. Therefore, in order to do your job right, you need to have multiple products and premium offers on offer throughout the length of your pipeline – or at the back-end.

    You’ll always make more money from back-end offers than from front-end ones. They offer a much higher conversion rate, they usually sell for more money and you can make a bigger percentage on the profits on them too. And it’s always easier to sell to a customer than a prospect.

    But remember the long term; you must have customers coming into the business. You can’t just rely on your loyal customers. By the way, if you have competition then you can bet that most are competing at the front-end and trying to attack your front-end offers with their own so as to eventually weaken and erode the strength of your own USPs and offers.

    The question I have for you is this; are you doing any type of marketing whatsoever, and if you are where is the focus of your efforts?

    Let’s start with a question: Do you have a strategy?

    Trying to do a little better is not a business strategy. You see, when you think about it almost everybody’s strategy is invariably to do the same as everyone else but just to try to do it a little better.

    And if you think about this a little more you’ll realise that this is not a strategy at all. How many business owners have fallen victim to this line of thinking, acting like an opportunist mistakenly believing that they are being strategic? Even though increasing revenue and profit they invariably work harder than ever before – often feeling frustrated, overwhelmed and exhausted in the process.

    If this is you, then you have most likely been working harder than you need to for a fraction of the results you deserve.

    What is a great strategy?
    A great strategy beats the odds; because in the face of uncertainty, obstacles, and risk you decide what course of action leads to success. Indeed a great strategy is about knowing what path to take, what course to follow, what unique position to hold and what means will achieve the end result.

    But where is the starting point? It is this; successful strategies are built on ‘creative insight’ and ‘doing what you do best’.

    We will examine the subject of ‘doing what you do best’ in Module 4, below, but lets start with ‘creative insight’.

    Before we do though, I want to begin with a caveat to emphasise the supremacy of creative insight. The issue concerns business planning. Many public and private institutions advocate business planning as a panacea for successful business; ‘sort the plan out and off you go’ is their cry! But it’s as well to remember that detailed business planning necessarily fails, due to frictions inevitably encountered in the planning process: chance events, imperfections in execution, and the independent will of customers and indeed competitors.

    Instead, human elements: ambition, leadership, people, morale, and above all intuition, or ‘coup d’oeil’; (pronounced KOO-DOY) a quick recognition of truth — or opportunity, as the French say, are paramount.

    The finest business owners and managers know that their biggest opportunity – and means of success – is rooted in a combination of creative insight and competence – not on today’s ‘rocket science’ or in technical advances that everyone is endorsing! They set only the broadest of objectives and develop profit producing activities to build up revenues based on the life-time value of their customers.

    But the overwhelming majority of business owners are opportunity seekers! They have no insight and therefore no goal, no strategy, no business design, no management skills and no plan to carry the business forward to where it is intended.

     

    Profit Note: Install The Habit Of Time Management

    The week has begun, there are lots to do today, and this is an important – albeit lengthy message, so lets start.

    The heart of this post is the issue of effectiveness – and more to the point the HABIT OF EFFECTIVENESS, and so this being the case I would really like to show how habits are formed as well as a strategy you can use to bed in this – and new habits in general – not only faster but in such a way that they will be more likely to last..

    It’s critical to remember that effectiveness is not inborn.

    Just like each and every one of us had to learn to ride a bicycle, because no one is born knowing how – every competent business owner or manager had to learn to be effective and practice being effective until it became a habit.

    Peter Drucker, a great writer on management competence tells us that:

    “Effective managers do not start with their tasks. They start with their time. And they do not start out planning. THEY START BY FINDING OUT WHERE THEIR TIME ACTUALLY GOES. Then they attempt to manage their time and to cut back on unproductive usages of their time”

    Now we need a simple way to ensure that what we learn about effective time keeping actually sticks.

    Here is a great model on how learning a new skill takes place. Once you understand the model, you can leverage it to install new habits rapidly. Pay careful attention here,
    first I’ll explain it, then give you examples to make it easier to understand, then I’ll show you how to use it for your own advantage.

    Learning new skills is divided into four different stages of competence. The theory is that as you approach something to be learned you actually pass through four phases on the way to doing something without even thinking about how to do it.

    Phase 1 – you don’t know how to do something and you don’t even know that you don’t know.

    Phase 2 – you now know all the different things you don’t know and you begin to work on learning them.

    Phase 3 – you now know what you need to know, you can do the skills necessary, but it takes all of your concentration.

    Phase 4 – you can now carry out the skills necessary without thinking about it, in other words you have developed a habit.

    OK, now let me give you two examples of how this work in your life.

    How habits are formed in practice

    Let’s look at this through a simple example, just to make sure you really get it, let’s take a look at learning to tide a bicycle.

    Phase 1 – First there was a time when you knew nothing about riding a bicycle – you didn’t
    know there were pedals, breaks, gears were and probably were oblivious of the all important issue of balance.

    Phase 2 – Next you started to learn about riding a bike – your parents would have explained how to ride one, showing you how to change the gears, raise and lower the saddle and you would have started trying to ride one – with the help of parents – and you would have realised there was a lot to learn but you were basically still unable to ride.

    Phase 3 – After a lot of practice and concentration on how to ride a bike – you were still not ready yet to signal left or right, talk to others and ride all at the same time (never mind cycle in a straight line with your arms folded) – even though you were capable of riding a bicycle you had still to focus and concentrate.

    Phase 4 – then at last you rode enough so that riding a bicycle became automatic, you no longer needed to think about what you had to do, you just did it – you were now unconsciously competent at riding a bicycle.

    So, to install habits in the quickest manner – its important to know which stage you are in and then concentrate on what you need to do to move to the next stage.

    But here’s a question – are you able to ride a bike, arms folded, talk to a friend and go round a bend all at the same time?

    In other words can you do several different – yet related things at the same time? Most people would find this difficult – if they hadn’t done them before they would have “to focus and concentrate” on what they were doing until they could do all these things in “tandem” –until then though they would go round the bend with their hands on the handle bars an stop talking!!

    The point is significant because until you are able to accommodate all these various related activities any attempt to BE FULLY COMPETENT in time management won’t be accomplished. It means simply being effective from time to time won’t really help you in establishing the habit of effective time management.

    Applying the framework to time management

    If you are serious about managing time a la Drucker then its as well to realise that

    1. there is still parts to being highly effective that you simply don’t know and

    2. that your initial goal is to become aware of what really makes up effective behaviour
    but even though you have the knowledge you don’t really know yet how to do it yourself

    3. that you must consciously choose and then practice the behaviours and work on doing them without even thinking about it so that you achieve consistent time management and often (given the presence of related and unrelated activities).

    4. that such practice of relevant activities makes you competent by habit, which should be your goal as a business owner and manager.

    Incidentally if you want more on the behaviour and strategies required to achieve high status as an effective time manager – why not e.mail me at andrew@real-results.org and ask for The Vital Habits to Reclaim Time to Achieve More Results. Its yours for the asking.