Executive Summary on Business
The goal of business strategy is to gain sustainable competitive advantage in order to be able to achieve the organization's purpose and objectives. Business strategy is most effectively broken up into three core components: business horizon, business focus, and business performance.
Strategic direction is decided by a thoughtful eye on the business horizon. The foundation of competitive strategy is matching up an organization's strategic capabilities with the present and future needs and wants of both current and hoped for customers. The fit between what an organization does best - its strategic capabilities - with what customers both need and want determines the strategic portfolio of products and services the organization should deliver. This clarifies the business horizon in the sense that it lets the organization establish in which market segments it wants to acquire superiority in the near future. The key to establishing this strategic direction is to answer the following four questions:
Formation of a strategy team or council is suggested to keep reviewing these questions and to make needed adjustments in a fast-paced marketplace.
After determining strategic direction, an organization must focus its energy and engage rivals in the "intelligent clash of wills" in competing for customers. Marshalling the "troops" to meet and defeat competitors while creating value for customers is referred to as tactics. It is bringing the organization's strategic vision into clear focus in the present. The Chinese strategist, Sun Tzu, gives three strategic guidelines for tactical operations when engaging competitors: first, disrupt competitor's strategy; second, upset competitor's alliances; and third and last, attack competitor directly. In doing this, it is helpful to remember the four keys to tactics given by the Prussian strategist, Carl von Clausewitz:
There are four basic tactical maneuvers to keep in mind in the direct attack of competitors. Note they are all explained in military terms, their analogy to business strategy is best worked out for each specific case.
It is recommended that a tactical team or council be formed to monitor tactics and make needed adjustments in the "friction and fog" of competition and to discuss the best ways to engage both customers and competitors.
Operations is where the rubber meets the road, it's actually doing it. However, in competition and interaction with others, nothing ever goes as planned! The best strategy and tactical plans break down, it's inevitable. Clausewitz, the Prussian strategist, blamed this on the "fog and friction" of the intelligent clash of wills. So, in the actual performance of an organization's strategic and tactical plans, expect the unexpected. The key to operational effectiveness and success is constant feedback from the frontlines. This requires that the organization place a high value on open and honest communication. Everyone in the organization needs to have permission and opportunity to talk to anyone else in the organization.
It is recommended that an operations council or team be formed to monitor and correct any problems in communication within the organization and to constantly ask how to improve operations and make them more efficient. It must be on guard for "High-Level Dumb" - a condition characterized by a large and growing gap between the beliefs of those at the top of the organization and the reality in the trenches.
For any strategy to be successful in the long-run, it must be aligned with the basic desires and values of all individuals who have a stake in the life of the organization. These are not only customers and equity owners, but all employees, suppliers, and vendors as well. Luckily, we all share the same basic desires and values; namely, we desire freedom and economic security and we all value self-worth, connection to something larger than ourselves, and contribution to others. For a more in depth presentation of these core components of strategy, and how they apply to your organization, contact Jeffrey Nielsen at firstname.lastname@example.org.
Jeffrey Nielsen is the founder of Intellectual Capital Development. Jeff is passionate about working with organizations to develop robust strategic business models that help them be creative, solve problems, and optimally adapt to their environment to create success. He specializes in strategic consulting and training so that all individuals in an organization act strategically, acquire knowledge-based skills that will not become obsolete, and begin to think like owners. To this end, he has created strategy, training, and organizational design models that give organizations the ability to transform challenges and crises in the environment for their gain and growth.
Jeff began his consulting and training career working with the Franklin Covey Company where he presented both the Seven Habits of Highly Effective People and the First Things First Time Management workshops. He also taught interpersonal communication workshops for special clients of the former Covey Leadership Center as well as overviews of Principle Centered Leadership. In this capacity Jeff has traveled internationally consulting with many of the Fortune 100 companies. He has also worked extensively with health care companies, computer and information technology companies and has frequently visited Washington D.C. to work with a variety of groups within the Federal Government. Jeff is also visiting lecturer at Brigham Young University and formerly at Utah Valley State College. He can be reached at email@example.com or firstname.lastname@example.org .