How to create a better strategy for your company?

How to create a better strategy for your company? 1280 850 Minerva Lifelong Learning
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In last week’s blog we explored the importance of creating an innovative business strategy, and looked at the case study of Yellow Tail wine. This week, we’re explaining how you can start to create an innovative strategy for your company. 

In this escalating changing world which is full of volatility, uncertainty, complexity, and ambiguity (VUCA), leaders are being challenged to produce visionary thinking, make insightful strategic decisions, guide their teams to go back to the way things were, take advantage of emerging opportunities, and so much more. 

A 2015 PwC study of 6,000 leaders, showed that most company leaders have the strong operational skills needed to maintain the status quo. But they had a critical deficit: they lacked people in positions of power with the ability, experience and confidence required to tackle strategy. 

So, how do you start to create a better strategy for your company? Start with a methodology, any methodology… Hire strategy specialists to help you. Companies that hold no conviction about priorities too often spread resources evenly across multiple issues, projects, and opportunities rather than targeting a few key activities with the potential to win big.

That’s exactly how Steve Jobs, the late Apple CEO, saved the company from disaster in 1996 and set it on the path to a $1 trillion valuation today – he worked with external consultants and the leadership team to develop a simple strategy – reduce Apple’s large product portfolio to just 4 key product lines: home/desk, home/laptop, pro/desk, pro/laptop, no enterprise. This brought Apple back to being consumer oriented NOT technology oriented. Like Thomas Edison said ‘I find out what the world needs, then I proceed to invent it.’ Note he says ‘needs’ not ‘wants’. I can’t think of anyone’s lives in the Western world that hasn’t been affected by Apple’s strategy – music, smartphones, etc.

I’ve borrowed McKinsey & Co’s ideas, the global consultants of choice for strategy, to illustrate a methodology. They view strategy through four lenses: 

  • Financial lens: what’s needed to create value in the business?  
    Several companies start their strategy process with a look at their financial performance. Yellow Tail didn’t start here, nor did Amazon, because it’s wrong. The financial lens is great for developing an objective baseline for assessing the feasibility of targets not in creating them in the first place. 
  • Market lens: am I playing in profitable markets that will deliver growth over time? Like Yellow Tail and Amazon did, it supplied a means by which they found opportunities of growth within existing segments and beyond. 
  • Competitive Advantage lens: what does it take to win in these markets?  
    An honest assessment of current capabilities should inform how the company chooses to play in its markets, as well as partnerships or acquisitions that may be necessary. But given time pressures, innate biases, and other factors, leaders and managers typically fall short in their consideration of assets, capabilities and the investments required to compete more effectively against rivals. As a result, companies end up chasing unattainable growth and underinvest compared to what it would take to win. 
  • Operating Model lens: do I have an organisation that can deliver?  
    Companies often keep the status quo rather than asking whether they have the people, processes, technologies, and other critical components required to make big moves.  

Thank you for reading my blog. Please do get in touch if you have a comment or share it on LinkedIn.

This is blog 2 in a 3 part series. Next week I’ll be sharing examples of businesses who developed innovative strategies in response to the Covid-19 pandemic, and will share the cost of not developing a strategy that is based on honest assessments and facts. 

About the author

Minerva Lifelong Learning

Short, simple and interactive learning programmes which provide adaptive, future skills for business leaders and SMEs with effective and enduring outcomes.

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