Business Success Starts with a Clear Strategy
Presented by Kevin NottJune 17, 2009
Preface
• Simplistic overview of a complex concept• This is the method I employ• There are different methods used by others• There is not “one right way” to do it• Most effective when conducted with an
experienced coach who– Understands the process– Encourages you to look beyond the obvious and
comfortable
Expected Course Outcomes
• Understand the concept of STRATEGY• Know why a clear strategy is critical to
business success• Understand strategic options• Learn how strategic options are evaluated• See how a business is built around a
strategy• Be motivated to forge and follow a clear
strategy
Running a Successful Business is like Playing a
Game• The game must be winnable• You play the game to win• Rules must be clearly understood• Probability of winning must be high• You can only play one game
What is this Strategy Stuff?
• Selecting the right game to play• Identifying components for success• Creating and aligning the organization to
win the game
Why a Clear Strategy is Critical
• Sets the direction for the business• Blueprint for the organization• Identifies purpose • Filters opportunities, decisions and
resources• Drives the communication between
company and constituents
Steps to Selection and Clarification
1. Analyzed your current situation2. Identify viable strategic options3. Evaluate each option Select one option4. Determine strategic direction5. Identify strategy-driving processes6. Align all aspects of business with the
strategy
S.W.O.T Analysis
• Internal Factors– Strengths– Weaknesses
• External Factors– Opportunities– Threats
Internal Factors
• Company culture• Company image• Organizational
structure• Key staff• Access to natural
resources• Position on the
experience curve
• Operational efficiency• Operational capacity• Brand awareness• Market share• Financial resources• Exclusive contracts• Patents and trade
secrets
External Factors
• Customers• Competitors• Market trends• Suppliers• Partners• Labor issues• Substitutes
• Social changes• New technology• Economic factors• Political factors• Regulatory factors• Barriers to entry
Identifying Strategic Options
• Primary Business Focus– Who you serve– What you offer
• Basis of Competition– How you position your business in the market– How you conduct business
Primary Focus Options
• Customer / Market• Product / Service• Production Capacity• Technology
Primary Focus Characteristics
CUSTOMER/MARKET PRODUCT/SERVICE
Business Defined by Customer type Products and services
Growth Focus New products for existing customers
New customers or uses for existing products
Product Evolution Customer needs Existing products
Objective Customer Satisfaction Product Integrity
Basis for Competition
BASIS FOR SELECTION BY CUSTOMER
LOW PRICE Lowest price. Speed, quality and service are of lesser importance.
SPEED Speed of delivery. Quality, price and service are of lesser importance
QUALITY Quality of the product. Price, service and quality will be less important
SERVICE Level of service – the experience. Quality, price and speed are less important.
Strategic Options Summary
CUSTOMER/MARKET PRODUCT/SERVICE
LOW PRICE
SPEED
QUALITY
SERVICE
Identify Strategy Drivers
Processes that are performed in the business for a selected strategy that
• Create distinctiveness• Are critical to the success of the strategy• Must be performed very well• Must be a business priority
How are Options Evaluated?
• Each option is considered on its own merit• Each factor is evaluated us S.W.O.T.
analysis• Strategy drivers are identified• Ideal business is “created” for strategy• Current business is measured against ideal
business to determine potential fit
Selection Criteria
• Organization has or can easily obtain significant competency in areas of Strategy Driver
• Significant market demand exists to make the option viable
Strategy Fit Matrix
Meets Customer Wants / Needs
High Low
Internal Capabilities
High Winner Temptation
(Solution seeking a problem)
Low Challenge Foolish
Aligning the Business with the Strategy
• Shared Values• Structure• Systems• Style• Staffing• Skills
Based on the 7-S Model developed by McKinsey & Company
No Strategic Alignment
Skills
Systems
Structure
Shared Values
StaffingStyle
Strategy
Limited Strategic Alignment
Skills
Systems
Structure
Shared Values
StaffingStyle
Strategy
Clear Strategic Alignment
StrategyShared Values
Systems
Structure
Skills
Staffing
Style
Summary
• A clear strategy is the foundation for success• Only one strategy can be selected• Strategy defines all aspects of the business• Organizational alignment is critical to strategy• Strategic success is dependent on Strategic
Drivers• Strategic Drivers must be in areas of core
competency
Kevin Nott, M.A.Business Strategy Coach