Can your Strategy pass its most important test?
My co-author and colleague, Roger Martin, wrote a Medium article on strategy. I suggest you check it out.
“Remember, every small business, nonprofit and freelancer has a business strategy whether they’ve consciously made choices to improve their chances of winning or not.”
Of course, if you are following the Leading to Win playbook, then you will have asked yourselves five questions and made five coordinated and integrated choices:
What is winning?
Where to play?
How to win?
What are the must-have capabilities?
What are the must-have enabling management systems?
Once you’ve made these choices, the next step is figuring out how to test those choices. You need to understand whether you have chosen a business strategy that is distinctive enough and competitive enough. You also need to understand if your strategy has the potential to create significant value for you, your customer and your organization.
As Roger reveals, you should run a simple 2 question test of your choices against your competitor’s responses. Ask yourself: are there important choices you’ve made that competitors can’t or won’t do? Be as objective as you can and try to put yourself in the place of your best competitor.
Roger believes the key to “can’t do” advantage is time. I agree that there is a first mover advantage and a head start can be an important source of competitive advantage. However, in my experience, two other characteristics of your business strategy choices also matter: how different and distinctive are your choices? How unique and robust are the vital core capabilities and enabling management systems?
Competitors can’t do strategies that create new blue oceans with executions that ensure a big, running head start. They can’t do strategies where you quickly capture a lot of customers, build critical assets, content, data, and other resources, move quickly down the learning curve, and/or create network effects.
Most competitors won’t do strategies that force them to make big changes that change their core beliefs about the industry, their brand, product or service, or to alter their previously winning business model. And, competitors do not like to give up significant value, margins and profits.
Enjoy Roger’s article on the two simple but powerful tests of your strategy’s competitiveness, distinctiveness and sustainability titled Can Your Strategy Pass Its Most Important Test?
