Can You Say What Your Strategy Is?

A previous issue of the Harvard Business Review includes article entitled "Can You Say What Your Strategy Is?"

Their premise?

"Can you summarize your company’s strategy in 35 words or less? If so, would your colleagues put it the same way?"

Their conclusion?

"Very few executives can honestly answer these simple questions in the affirmative. And the companies that those executives work for are often the most successful in their industry."

The downside?

"Conversely, companies that don’t have a simple and clear statement of strategy are likely to fall into the sorry category of those that have failed to execute their strategy or, worse, those that never even had one. In an astonishing number of organizations, executives, frontline employees, and all those in between are frustrated because no clear strategy exists for the company or its lines of business."

Leaders of firms are mystified when what they thought was a beautifully crafted strategy is never implemented. They assume that the initiatives described in the voluminous documentation that emerges from an annual budget or a strategic-planning process will ensure competitive success. They fail to appreciate the necessity of having a simple, clear, succinct strategy statement that everyone can internalize and use as a guiding light for making difficult choices.

Understand there are three critical components of a good strategy statement—objective, scope, and advantage. Then, create a great strategy, which requires careful evaluation of the industry landscape, a detailed understanding of customer needs, segmenting customers, and identifying unique ways of creating value for the ones your firm chooses to serve. Then, find the sweet spot that aligns your firm’s capabilities with customer needs in a way that competitors cannot match. Next, leave no room for misinterpretation and cascade the statement throughout the organization.

BOTTOMLINE: "Words do lead to action. Spending the time to develop the few words that truly capture your strategy and that will energize and empower your people will raise the long-term financial performance of your organization."