Tag Archives: choose the right strategy

Creating Strategy Without a Strategy– It’s Business Without a Plan: Choosing ‘Right’ Strategy is Biggest Challenge…

Business strategy is all about decision-making… If there are no decisions, there is no strategy; if there’s no strategic decision-making, there is no success. According to Roger Martin; business won’t survive without a strategy…

When a strategy succeeds, it seems a little like magic; unknowable, unexplainable… then it becomes obvious in retrospect… But actually, it’s not really– strategy is about making choices to win in the marketplace…

According to Tara Gentile; creating a business strategy that breaks through the noise is about declaring ‘yes’ to some things and ‘no’ to others. And as you might guess; ‘yes’ and ‘no’ are not about right and wrong…

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Making a decision to drive the business in a different direction is to make a choice, and the more intentional you are with decisions, the stronger the strategy… However not every strategy works, but to even have chance at success it must be based on– focus and intentional decision-making… Every intentional decision provides an opportunity to put the business in the best possible position for success…

When thinking about a strategy, most businesses tend to follow classical rules, e.g.; study the market and competitive situation, define goals and draw-up step-by-step tactics to get there… typically strategies sort into five categories– Be Big, Be Fast, Be First, Be Orchestrator, Be Viable… But in today’s business environment, which is characterized by; fast change and uncertainty… ‘one size’ does not fit all…

Getting a strategy ‘right’ depends on the critical components of a business environment, which includes;  predictability, malleability, harshness… A classical approach assumes that an industry environment is relatively; ‘predictable’, e.g.; the Oil Industry holds few surprises for strategists; its relatively predictable and changes very little, over time… whereas, the Internet Software Industry is highly volatile and very susceptible to disruptive change, over time…

Clearly, strategies that work in the Oil Industry are highly unlikely to work in a far less predictable and highly disruptive tendencies of the Internet Software Industry… Hence companies in dissimilar competitive environments must– plan, develop, deploy… strategies in very different ways… but, research shows that all too often, they do not…

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In the article Which Strategy When? by Christopher B. Bingham, Kathleen M. Eisenhardt, Nathan R. Furr write: Just when a business thinks it has settled on the right strategy… then markets change, competition shifts… and business is forced to rethink its strategy… By understanding the forces shaping a company’s competitiveness, business must choose the most appropriate strategic framework…

Hence, whatever business circumstances, managers must forever ask the same questions: Where do we go from here, and which strategy will get us there? Do we fortify our strategic position, or move into nearby markets, or branch out into radically new territory? To help guide through these decisions; business must– know, understand, explore… the smorgasbord of strategic frameworks and decide which one is the ‘right’ one, and when…

It’s a continual process, including; jumble of strategic ideas, market analyses and hefty binders of information and data of; 5-forces analysis, 3-Cs analysis, review of core competencies, examination of profit and loss, competitive landscape, and so on… But inevitably the question is– Which strategy is most effective for business right now? Most managers recognize that not all strategies work equally well in every setting, but how do you choose the right one, at the right time…

An analysis can provide some insight: First, different strategic frameworks break into three models; strategies of position, strategies of leverage, strategies of opportunity… And the right strategy for a company depends on its– circumstances, available resources, and management ability to combine resources effectively… Second, many assumptions about competitive advantage simply don’t hold, e.g.; although some strategy gurus talk about strategically valuable resources, sometimes ordinary resources when assembled well can provide the required competitive advantage…

Or, sometimes it makes good sense to bypass the largest markets and focus instead on markets where resources fit best… Or, in other circumstances, it may be preferable to ignore existing resources and attack an emergent market… Or, in some situations basic rules of thumb work better than detailed plans Surprisingly often simple strategies can be more effective than complex ones…

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In the Your Strategy Needs a Strategy by Martin Reeves, Knut Haanaes, Janmejaya Sinha write: Most businesses lack a systematic way to match their strategy-making style to the particular circumstances of their– industry, markets, core competencies… According to BCG survey of 120 companies around the world in 10 major industry sectors; executives are well aware of the need to match the strategic processes to the specific demands of the competitive environments… However many executives still rely on a classical approach,  which assumes the business environment is– predictable, stable… even though their own environment is known to be highly volatile or mutable…

Fully three out of four executives understood that they need to employ different strategic styles in different circumstances. Yet judging by the practices that they actually adopted, the estimate was that the same percentage are using only two strategic styles and they were the Classic and Visionary– which are best suited for predictable environments… And that means only one in four are prepared, in practice, to adapt to– unforeseeable events, or to seize opportunity that could shape an industry to their company advantage…

Understanding how different the various approaches are and in which environment each best applies can go a long way toward correcting mismatches between strategic style and business environment…

Setting strategy is an art, and perhaps you could use a palette, i.e., a ‘strategic palette’ acting as a unifying framework of choice for strategic formulation, and it could provide various ways to approach strategy in this complicated, turbulent world… According to Martin Reeves; it’s not that we lack powerful ways to approach strategy; it’s that we lack a robust way to select the right one for the right circumstances… The ‘strategic palette’ can be applied to different parts of a business, it includes:

ClassicalI can predict it, but I can’t change it…

AdaptiveI can’t predict it, and I can’t change it…

VisionaryI can predict it, and I can change it…

ShapingI can’t predict it, but I can change it…

RenewalResources are severely constrained…

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In the article Have You Tested Your Strategy Lately? by Chris Bradley, Martin Hirt, Sven Smit writes: What’s the next new thing in strategy? According to Phil Rosenzweig; that’s the wrong question: Rather than looking for the next musing, it’s probably better to full understand what you already know is true, and make sure you do that well… Let’s face it: the basic principles that make for good strategy often get obscured… Sometimes the culprit is torrents of data, reams of analysis, piles of documents that can be more distracting than enlightening… but ultimately strategy is a way of thinking…

To stimulate that thinking and the dialogue that goes along with it, there should be a set of tests aimed at helping executives assess the strength of their strategies– testing the strategy itself (i.e., outcome of the strategic process), rather than just frameworks, tools, approaches that generate strategies… There are two issues; first, companies develop strategy in many different ways, often idiosyncratic to their organizations, people, markets… Second, many strategies emerge over time rather than from a process of deliberate formulation…

This may sound more complicated than validation using, e.g.; the 3-Cs (competitors, customers, company), or the 5-forces (barriers to entry, buyer power, supplier power, threat of substitutes, degree of rivalry)… But pressure-testing can help pinpoint more precisely where a strategy needs work, while generating a deeper, more fruitful strategic dialogue… The ability to pressure-test is especially timely in this highly competitive environment, where business only get one chance in the marketplace– testing can help expose– obsolesces, or reveal weaknesses, or force companies to confront choices and trade-offs that are delayed…

But than: What is the biggest mistake companies make with strategy? According to Henry Mintzberg; there is a very human bias towards perceiving business environments as more predictable and more controllable than they actually are… It’s very comforting to believe that one can control and predict the surroundings… Also, a big trap is to be stuck in one way of doing strategy; most often business implement the Classical approach, i.e., analyze, plan, execute… and it may very well be best the approach under ‘right’ circumstances, but it can also be the ‘wrong’ approach…

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In highly volatile markets, there are a couple of capabilities that companies need to have to succeed:

First, adaptive capability— ability to undertake disciplined experimentation…

Second, shaping capability— ability not just to participate in their environments– but actually to shape them to their advantage…

Third, capability of ambidexterity— ability to run different approaches to strategy in different parts of the organization…

Hence, it’s time to ‘kick the tires’ and possibly rethink your business strategy…

The Inevitable ‘Fork In The Road’ Decisions, Moment Of Truth: You Can’t Ride Two Horses, You Must Choose…

Every year a typical business faces over 10,000 ‘forks in the road’. Whether through conscious choice or automatic conditioning, each of those choices shapes the future. And each of those choices is a story waiting to be told… The ‘fork in the road’ metaphor represents the concept of a dilemma for choosing the right direction to go when facing two equal or similar options… it’s moment in business when choice of options is required.  

A quote from Lewis Carroll’s ‘Alice in Wonderland’: One day Alice came to a ‘fork in the road’ and saw a Cheshire Cat in a tree and Alice proceeded to asked the Cat: Would you tell me which way I ought to go from here? That depends a good deal on where you want to get, said the Cat. I really don’t care where, replied Alice. Then it doesn’t much matter which way you go, said the Cat…

According to Blair Kirchner; every business faces the proverbial ‘fork in the road’… it’s what they decide at these critical moments that determines if the business will achieve its vision, or not…

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Hence it’s very important, when you reach these forks that you step back and objectively evaluate all the options… and make the best decision using all the available information at that time… As Robert Frost wrote; when you come to a ‘fork in the road’; do you take the easy path that addresses only today’s supposed crisis, which can harm innovation in the long run? Or, do you take the harder path (fork) that strengthen– innovation, economic growth…

As Yogi Berra once said; when you come to a fork in the road, take it! Although this Yogi’s saying may sound odd, it makes more sense than you might realize. Many businesses come to forks in the road and they do nothing– hence, the business becomes stagnant, it does not grow, it does not shrink, it just sits there… Most of the times you need to do something– you must choose!

In the article When You Don’t Know Where You Are– You Can’t Get To Where You Want to Go by Jamie Sussel Turner writes: Have you ever attended a fancy dinner and faced many ‘forks’ at your place setting, wondering which was the proper fork for the salad? Life and business choices can feel a lot like that. So how do you choose the right fork? You might try by asking; What’s most important here? The answer to this question might weed out the ‘forks’ that go in the wrong direction…

Every fork in the road is either; opportunity, adversity, status quoThe scary part is often you just don’t know, which one is which. However, by having clear vision about what you want, who you want to be, direction that you want to take, then fork-in-the-road decisions  become easier to make, and inevitable bumps in the road become less stressful…

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In the article Fork in the Road Business Questions by Daniel Newman writes: There’s an age-old saying in business: What got you ‘here’, won’t get you ‘there’… It relates to the continued search for how to take your business, yourself and your ideas to the next level…When running a business it’s normal to find yourself continuously inundated with the daily grind… However if you do want to end up ‘there’… it’s important that you not only do the right things day in and day out, but that you also ask the right questions; of yourself, your customers, employees, everyone else in the value chain… Begin by asking questions, such as:

  • What are you best at? It’s surprising how many companies don’t truly know their core competency, or haven’t reflected on how it has changed over the past several years. This is critical to your business model and success…
  • Who is the competition? Beyond just the obvious, are you aware of who competitors are?
  • How is the competitive landscape changing? Are the competitors only those from your industry? What has changed your competitive position in the market?
  • What truly makes your organization different? ‘Equal’ doesn’t cut it anymore. What is your differentiator?
  • What change is shifting your industry? What changes will have biggest impact on the organization?
  • What happens next? What are the forks in the road? Where do you go from here?

In the article Which Fork to Take? by Dylan Madden writes: There are times in business when you reach a point where you have to decide which fork (path) to take… But often you are unsure which is the right path, e.g.; consider the dilemma of a ‘deer’; what options does a deer have in head-light? 1.) It can decide to stay where it is, which only pro-longs its journey across the road… 2.) It can run to center of the road with doubt on what to do next, procrastinating in making a decision… 3.) It can carefully run across the road and reach its destination…

Every business has the same options: 1.) stay where you are… 2.) doubt yourselves and do nothing, which leads to destruction… 3.) make the decisions and ‘move’ forward… Which do you choose? The short answer is that you ‘must’ make a decision and choose a direction… But first, you must have a clear purpose and goal in mind… second, you must fully understand the options and consequences… third, you must understand the probable outcome and collateral impact of your decision… Most important– you must make a decision and don’t prolong the journey…

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In the article Reaching a Fork in the Road by Gary and Joy Lundberg write: One of the often quoted sayings by Yogi Berra, famed baseball player and manager; When you get to the fork in the road, take it… This quote brings much laughter because most people think of the normal outcome, which is each fork leads in to different direction.

However when you know the origin of the quote, you understand it in a different light: Yogi was giving directions to a friend’s house, which is accessible from both roads at ‘fork in the road’ since they eventually merge to the same location… Yogi’s message is simple and clear; when at a fork you must make a firm decision… More important– make sure it feels right, learn from the decisions, don’t second-guess yourself … Things to consider when making a decision at the ‘fork in the road’:

  • Evaluate the options and know how they affect your principles and values… If one option compromises your values, no matter how lucrative it may be, it’s not worth the risk…
  • Does the decision feel right deep inside? There are a number of people who have reflected after picking a fork in their road, saying; it just did not feel right, but I did it anyway… when a decision does not feel right, you cannot force it to be right…
  • Get input from others who have traveled a similar road. You don’t need to reinvent the wheel, learn from others so you can make better and wise decisions…
  • Make a firm decision and go forward; Focus decisions on building success but also understand that business is ever-changing and full of forks in the road…

In the article Which Road Should I Take by self-development writes: My brother called me the one day and asked me for advice?  He was trying to decide between two job offers: Job-1 and Job-2… and he asked me which job should he take… I told him, it depends… just like the fairy tale, the ‘Cat’ was telling ‘Alice‘ that the road you take depends on where you want to end-up...

So I advised my brother to begin with the end in mind, i.e.; what is your life’s purpose? He said his purpose in life was to ‘teach’ but he wants to make a lot of money, first… I told him to forget about the money and advised him to focus on his ‘purpose’… I then asked him which job best supports his end goal of ‘teaching’.

He said ‘Job-1’ and quickly added that ‘Job-2’ pays more money; his thinking was first to make lots of money and then go into teaching which is a very rational approach to the dilemma. But I again advised him to ‘focus on purpose’, not money... I cautioned him to think through his decision carefully because things– don’t end wrong they begin wrong!

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Business is all about ‘forks in the road’– making decisions… At every fork in the road, you make a decision and those decisions shape the business… Hence, whenever you are at a ‘fork in the road’ make a decision that best supports the overall– purpose, mission, goal… of the business… and if possible; ‘take the road less traveled’, or ‘do things a different way from the way they are usually done’, because that makes the difference in the journey… these phrases are from the poem ‘The Road Not Taken’ by Robert Frost...

However, despite the obvious advantages of taking the ‘road less traveled’, there are certain times when taking this path is not always the best choice, and it might be better just to stick with the ‘road more often traveled’… Making the decision on which road to take can be very difficult, but managing a business is all about choices…

According to Bobby Albert; it’s important for leaders to– pause, reflect, plan… so that when they are at a ‘fork in the road’ they know which fork (path) will get them to their destination…