In the last two weeks I’ve posted a three-part series on I’ve posted a series on setting and executing business strategy on the Amex OPEN forum in the last two weeks. I’m happy to see the first of these showing up on top of the trending list there. Here’s a summary:
It’s simple. Just imagine the story of somebody who has a problem or wants something, finds your business and buys from you. Pretend for a moment that you’re writing a story or talking to a friend about your company. Don’t sweat writing or editing, just make it a simple story you can tell. Go ahead, be creative and let go.
To develop your own useful milestones for your business strategy, think of how an artist squints to see the features of a landscape, and (metaphorically) squint as you look at where you want your business to go. Look for points along the way, moving in the right direction, that you can fix on.
The idea of steering applies to real business strategy management in the need for frequent small corrections. It’s hard to make daily details match the big strategy. Even with strategy in place, and milestones and metrics laid out, it still takes regular review and revisions to make sure the focus and priorities in the strategy flow down into the daily details.
To my mind, strategy without execution is useless; and good business planning is nine parts execution for every one part strategy. And execution means setting the goals and then managing them, day by day.
True story: my wife and I wanted to move but we weren’t sure where. In true MBA fashion, I set up a spreadsheet to compare candidate locations for a series of factor including outdoor sports, weather, smog, traffic, lifestyle, public education, crime, and so on.
So for each of about 12 possible places I input scores from 1 to 10 for each of the factors I’d identified. And when I didn’t like the original conclusion, I (without realizing it as I did it) changed the input factors until it did. We wanted to live in Eugene, Oregon.
I didn’t realize it then but I do now. I set up an objective analysis and then subconsciously messed with the inputs to generate the conclusion I wanted.
Do you ever do that?
Another true story: One of my daughters struggled with a job decision for weeks. She had a job, and she had a new job offer, and she liked them both. The choice was driving her crazy.
Finally, late one night, she called me up to share a spreadsheet analysis she’d done. As she went through the analysis and the input factors, I realized she was subconsciously cheating the scores towards one of the alternatives and away from the other.
I told her then that I thought she had just discovered what she should do. Her gut had chosen. The evidence was in the way she skewed and biased her objective analytics.
When your gut gets your numbers wrong, and screws up your objective analysis, shut up and listen.
Strategy step one was understanding identity. Step two is market focus, but always with the realization that you think these two through together, not one by one. Your identity is about uniqueness, strengths, and weaknesses. That influences your choice of target market. And your market influences your identity. They mix together.
Most of us make the mistake of aiming too broadly. Think of this quote: “the secret to failure is trying to please everybody.” If we were a restaurant, we’d be trying to offer the best food at the lowest prices with the best service and a drive-through as well. Which is disastrous. Most successful restaurants focus narrowly. They want the foodies who pay high prices, or the quickies who want fast and cheap; but never both.
Really strategic target marketing is like sculpture. You start with the big block and then knock the pieces off of it. Be able to define who isn’t your target market.
Try to imagine in detail your absolute ideal buyer. Experts call this working with a persona. Give her age, family, education, job, commuting habits. Know what kind of car he drives, what websites he likes, and what he watches on TV. Know her politics. Know what he reads. The more you know the one idea, the better to manage your market message and media.
Make sure you understand this person’s underlying buying decision. Understand the real needs. With restaurants, for example, the needs and wants involved in an expensive low-lighting romantic meal for two are very different from those involved in a quick cheap drive-through hamburger happy meal. Free yourself of features, and think of benefits. Tell yourself the story of you this person finds your business, what he is looking for, and why that matters to her.
Another thing I like about small business and entrepreneurship is that you live the strategy without the elaborate frameworks and detailed analysis. As companies get bigger, strategy gets harder. It’s much more likely to take teams of experts tons of detail work.
Big companies are like big ships. They change course slowly. There are lots of moving parts involved.
For you and me and small business in general, strategy is always happening, whether you like it or not. And if you screw it up, changing it too frequently, failing to focus, trying to do everything, then it hurts.
Strategy for us? It’s really about focus. You can’t do everything, so you do the right thing.
You can’t please everybody, so you select who you please based on common sense, your strengths and your weaknesses, and how you’re different.
You can’t sell everything, so you sell what you’re really good at, what makes you appealingly different, and what sets you apart.
You can’t do everything so you do what’s most important, what gives you the most benefit per unit of resources, what aligns you best with your target market and your focused business offering.
Here’s a quick test: do a SWOT analysis, as in the illustration here. List your strengths, your weaknesses, your opportunities, and threats. Then think about your strategy. Does it pass the SWOT test, or not? Does SWOT bring up something you’re doing wrong?
And another quick test: the principal of displacement, which means everything you do rules out something else that you won’t do. Think about it: are you doing the right things? Or are you trying to do everything?
And finally, a third quick test: do you ever say no to anything? When? Why not?
One good step in strategy is understanding your business identity. Look in a conceptual mirror, at your business, not yourself; consider honestly what you see in that mirror. Who you are as a business, how you’re different, what you like to do, what you’re especially good at, and what you’re bad at.
This is like a fingerprint. It’s unique to you. Or, in this case, unique to your business.
Think about strengths and weaknesses. Think about core competence. What makes you special? What can you do for people that’s different or better than what anybody else can do?
You can’t do it in a vacuum. You have to do something other people will pay money for. It’s not all about you. Still, it’s a good first step. Start there.