Sound Strategies
by Ronald C. Lazof

The development of Sound Strategies for a company requires that first the company assess its present position and then have determined its vision. Once the end points are known, alternative paths to Planned Performance can be analyzed and the path contributing the most timely and direct route to the company's vision, consistent with the company's resources and requirements will constitute the company's Sound Strategy.

Once a company has adequately determined its present position and determined its goals and corporate vision, it is in a position to select the route to be followed from among all of the alternative available paths. The first step however must be a full and adequate analysis of a company's current position.

What are the company's strengths and weaknesses (S.W.O.T. analysis)? What tools and process does the company have available? What are the company's resources (personnel, financial, operational) and its requirements? How are the company's products and services differentiated from its competitors' offerings? All of these questions and many others need to be first answered and quantified.

Merely going through the exercise involved in a S.W.O.T. analysis, listing the company's strengths and weaknesses, as well as how important each is to its stakeholders, will deliver significant value in the planning process. It is key that the company's strengths which are most important to its stakeholders be emphasized, but it is even more important that its weakness, in areas which are important to them, get immediate attention. Once the S.W.O.T. analysis is complete, it can be used to help in the allocation of the company's scarce resources.

Obviously it would make no more sense for a company to adopt a strategy for which it lacks resources or which does not meet its requirements stakeholders collective expectations than to buy a pair of shoes that are too small just because they look good! The adopted strategy must take into consideration only the company's presently available resources and those which will be available with at least an 80% confidence level. That means the weaknesses must get first call on the company's resources. The company must survive before it can thrive.

Once all of the lethal weaknesses have been addressed, the company can afford to devote additional resources to the process of emphasizing its strengths. Obviously, few resources should be allocated to company weaknesses that are unimportant to its stakeholders. Where the company has strengths that are unimportant to its stakeholders either management may seek to educate and market its strengths in these areas, to the stakeholders as differentiating factors, that should be recognized as important or alternatively mine and reallocate the resources utilized in developing and maintaining these strengths to address company weaknesses.

Collectively, the results of the company's analysis of its present position together with the company's vision statement, will ultimately determine its path or market strategy. Any strategy that gets the company to the end vision is in some measure sound. But, it is that strategy which will gain the goal in the most direct way, in the shortest time, with the highest probability of success in light of the company's present resources and capabilities, that constitutes what we refer to as a Sound Strategy.

Like the concept of confidence level, that of probability of success comes out of the statistical disciplines. An event is probable of occurrence if it will more likely than not occur. However, as used here we mean that of all of the paths to the company's vision the selected one, after consideration of all relevant factors, is the most likely of success.

It is the company's Sound Strategy which directs the creation of the company's business plan and budgets, forecasts and estimates, defines the company's vision, and makes the statement that the vision is both practical and achievable. It is, of course, axiomatic that the shortest distance between two points - the company's present position and its corporate vision- is a straight line. Although this may work in two dimensions, it may not always be true in three or more dimensions, such as the great circle routes often taken by today's airlines.

Today's business environment is both multidimensional and multi-variant. Therefore, the company may need to establish intermediate way points in its strategic plan. Although these way points advance the company in time and distance in the direction of the corporate vision, they may when viewed from the outside appear to move the company away from its base course. In fact, such observable misdirection to third parties may be a key part of the company's strategy to lull others into believing either the company is off course or to misjudge its ultimate destination.

For example, a job-shop manufacturer without proprietary branded products may have as a corporate vision the manufacturing, distribution, and marketing of unique, proprietary and branded products of its own with the goal of realizing substantial enhanced operating margins. The vision may however, as an intermediate step, require the manufacturer to first become the low cost producer of similar commodity products in order to finance facilities, equipment and the trained work force which will ultimately be required to achieve the corporate vision. The plan and strategy may then be sound and direct even though it may from an external viewpoint not appear to be so.

Sound Strategies are all unique to a particular industry and company. They are custom made and based on each company's own strengths, weaknesses, marketing position, and vision as well as its resources. By taking Intelligent Information and developing a Sound Strategy, a company can, through Planned Performance, achieve its vision.

Ronald C. Lazof currently serves as a managing director of Prism Advisors, LLC, a management advisory and consulting organization. Prism focuses its attention on the entrepreneurial, emerging growth and mid-sized privately held corporate markets. Mr. Lazof served as President and Chief Executive Officer of Behr Process Corporation from 1996 to August 2001, playing a key role in the company's move from a private family held business to a publicly held multi-plant manufacturer and distributor of paints and coatings. Contact Ronald by e-mail: and visit .

Many more articles on Competitive Strategy in The CEO Refresher Archives


Copyright 2002 by Ronald C. Lazof. All rights reserved.

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