How to Think Strategically

Have you ever heard someone say, “We need a strategy”…and wondered what that person meant? Look up books and attend lectures on strategy, and you’ll read and hear plenty about setting priorities, goals, and measures. This is what some people call good strategy, but it’s what I call boring and stale planning. It keeps an enterprise moving along, but it rarely propels a team to the top. In fact, isn’t not even strategy. It is just planning.

A great strategy accomplishes much more. It captures the imagination. It energizes a team. It resonates with its marketplace. It reflects and satisfies the needs and wishes of those it touches. It elevates an organization to deliver sustainable and meaningful impact, ideally well beyond what the enterprise had accomplished before. It differentiates the enterprise from everyone else in the field. A great strategy may achieve desired goals, but it also brings a clarity of focus, stands for something special, and stimulates passion across the enterprise and beyond.

What does it take to produce this level of strategy, and what does such a strategy look like? Apply these principles to emerge with a strategy that raises performance and passion across your enterprise:

Start with a Solid Foundation

Some elements of a winning strategy are straightforward, so don’t overlook them. Use them to your advantage.

  • Leverage your fundamental strengths.
    Recognize what already works well. If one of your products is growing steadily and profitably, study why that is happening and try to replicate it. Be like a sports team that discovers its most effective plays, captures those plays in a playbook, and develops systems to run effective variants on those plays for as long as they succeed.

  • Align with the dynamics of survival and growth.
    Figure out what you absolutely must get right, such as profitable margins, access to capital, and healthy cash flow. Do not develop a strategy that drifts away from these fundamentals. This point may seem obvious, but consider a franchise you’ve seen that became the hottest item in town, became too sure of itself, grew beyond its means, and then flamed out and died. A great strategy is aspirational, but it also honors the “laws of nature” for organizational survival. Be like an eagle that fills up on enough nutrition and oxygen to soar all day with energy to spare. Your strategy must draw energy from positive income, sturdy resources, and ample liquidity.

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Achieve Clarity

Clarity of focus does not mean “do what you’ve always done”; instead, it means you must recognize the trade-offs between the options you face, invest in the options that offer the most upside, and decline or divest the other options.

  • Distinguish and differentiate your enterprise.
    If your customers and supporters can’t tell easily what makes you special, you are not special. If you are not special, eventually you will lose to a competitor who is. Aim to be unique…or dare to redefine the field. Thinking strategically is about deciding what you will do differently than everyone else. This is one of the most powerful elements of strategy, yet it rarely gets the attention it deserves in traditional “strategic planning” discussions. Give this principle your full attention. Consider with your team, “What might we do better, differently, and more memorably than anyone else?”

  • Convey clear direction within your enterprise and across your marketplace.
    Communicate, “This is who we are and this is what we do” in unmistakable terms. Ask your team, “If we are to be known for one thing, what shall it be?” Align your choice with something your desired audiences will love. Communicate that direction to your audiences. Do not diverge into messages that would confuse or distract anyone.

  • Make thoughtful trade-offs.
    This principle complements the previous ones. Define what your enterprise will and will not do: “We will invest in A. We will not invest in B. The lines are clear.” If you decide to swim, don’t buy running shoes. Buy a swimsuit.  

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Combine Pace and Leverage

Stretch your enterprise like a rubber band. Extend beyond what you are today, or point in a new direction, for as far as the elastic will take you.

  • Identify and exploit new combinations and connections.
    Reconfigure relationships and stretch networks to get growth, efficiency, and strength beyond what you could accomplish alone. Be like a film producer who weaves together a web of movie sets, creative talent, advertisers, and distributors to boost content and profits. Think about the ecosystem of support that you could access. Design your strategy not only to activate the ecosystem you know today, but also to develop relationships across the ecosystem you will need tomorrow.

  • Seek not to maximize, but to optimize.
    Aim for bold size, scale, and scope…if resources can support the growth. Be like a team that paces its offense so its defense will get lots of time to rest before returning to the field. Be like a farmer who plants the right amount of seed for crops to grow healthily without choking or cannibalizing each other. Be like a kitty who eats the right amount to be satisfied…and to still be able to jump!

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Treat People as People

  • Choose markets whose behaviors match your model.
    Either exploit or diverge from waves of demand. Be like a music band that makes a conscious choice to either play pop music for the masses or unveil a new sound to attract and delight a niche audience. Do not waffle between these options. Your strategy should be tailored toward the audiences that align best with the pricing, product and service mix, and brand identity you desire for your enterprise, so select your market not so much by demographics such as age or income, but instead by behaviors, such as cost-saving, trend-following, luxury-purchasing, or travel-loving. Invest in “human-centered” research to understand your customers at the behavioral and emotional level, and then use the observations as catalysts for future product, service, and marketing strategies.

  • Reconfigure your team to match your strategy.
    An effective strategy is not about who you are today, but whom you wish to become tomorrow, so prepare for the staff you will need tomorrow. Your personnel structure might need to change, but this does not mean you should develop strategy behind closed doors and then announce changes that could surprise and concern your staff. Such an approach almost always backfires: trust erodes and morale suffers. Instead, engage your staff members in strategy. They will become more motivated to train themselves for the needs of tomorrow and they will deepen their trust in your leadership.

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Reveal and Rethink to Revolutionize

Strategic thinking is liberating when it frees your mind from convention. As you develop your skills, you may find that you are becoming more curious about why people behave the way they do, why enterprises are structured as they are, and where untapped possibilities for progress are hiding, waiting to be discovered.

  • Discover and reexamine quiet assumptions.
    Know the lessons of the past, but realize the future may require new beliefs and mindsets. Be like a car buff who loves a gas engine but then plugs an electric engine under the hood. 

  • Reframe problems and opportunities.
    Something as simple as changing a word can propel a more successful future. Be like a technology director who asks, “What if our solution were cloud-based rather than server-based?” or a sales manager who ponders, “How would our customer relationships change if we saw ourselves as servants instead of salespeople?” Leverage the variety and flexibility of language to unearth exciting new possibilities!

If you apply these principles, you can create a healthy, strong, distinctive, and purposeful enterprise that will thrive well into the future. Don’t settle for a plan when you can explore and achieve far more.

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