Can you answer the most essential strategy question facing every business: Does Your Company Matter?
Author Cynthia Montgomery redefines strategy and issues a call to arms for leaders to take back their rightful claim to be strategists of their own organisations.
- Ingvar Kamprad’s IKEA and the compelling purpose that is enabling the company to reap huge profits in a crowded, traditionally low margin marketplace
- Dominico DeSole’s spectacular turnaround of Gucci Group and the finely-tuned system he created to reposition the company
- Steve Job’s rocky evolution as a strategist at Apple and Pixar, and what can be learned from the times he got it wrong and the times he got it right
Does your company matter?
That’s the most important question every business leader must answer. If you closed its doors today, would your customers suffer any real loss? How long would it take, and how difficult would it be, for them to find another firm that could meet those needs as well as you did? Most likely, you don’t think about your company and what it does in quite this way. Even if you’ve hired strategy consultants, or spent weeks developing a strategic plan, the question probably still gives you pause.
Hallmarks for great strategies
- Anchored by a clear and compelling purpose. It is said that “if you don’t know where you’re going, there isn’t a road that can get you there.” Organizations should exist for a reason. What’s yours?
- Add real value. Organisations that have a difference that matters add value. If any of them were to go away, they would be missed. Would yours
- Clear choices. Excellence comes from well-defined effort. Attempting to do too many things makes it difficult to do any of them well. What has your business decided to do? To not do?
- A tailored system of value creation. The first step in great execution is translating an idea into a system of action, where efforts are aligned and mutually reinforcing. Does this describe your business?
- Meaningful metrics
- Passion. It’s a soft concept but even in mundane businesses companies that stand out care deeply about what they do
Less than half of the workers in any industry felt strongly connected to their organisation’s purpose
In a Gallup poll nearly all respondents said it is “very important” or “fairly important” to them to “believe life is meaningful or has a purpose,” but less than half of the workers in any industry felt strongly connected to their organization’s purpose. Equally interesting, a number of people in less than life-and-death careers (for example, septic tank pumping, retail trades, chemical manufacturing) felt a strong connection to the goals of their organizations, while others in some traditional “helping” fields (for example, hospital workers) felt far less connection.
If your company disappeared today, would the world be different tomorrow?
Frankly, it’s not a question most have been asked or asked themselves says Montgomery. It’s a real soul-searcher. But it’s one that you need to answer. Here’s what it means to be different in a way that matters in your industry. It means that, if you disappear, there will be a hole in the world, a tear in the universe of those you serve, your customers. It means customers or suppliers won’t be able to go out and immediately find someone else to take your place.
Purpose is where performance differences start
Nothing else is more important to the survival and success of a firm than why it exists argues the author, and what otherwise unmet needs it intends to fill. It is the first and most important question a strategist must answer. Every concept of strategy that has entered the conversation of business managers—sustainable competitive advantage, positioning, differentiation, added value, even the firm effect—flows from purpose. When a management with a reputation for brilliance tackles a business with a reputation for bad economics, it is the reputation of the business that remains intact.
What’s been forgotten is that strategy is not a destination or a solution. It’s a journey
But, if this were so, the process of crafting a strategy would be easy to separate from the day-to-day management of a firm. All a leader would have to do is figure it out once, or hire a consulting firm to figure it out, and make sure it’s brilliant. If this were so, the strategist wouldn’t have to be concerned with how the organisation gets from here to there—the great execution challenge—or how it will capitalize on the learning it accumulates along the way. But this is not so. What’s been forgotten is that strategy is not a destination or a solution. It’s not a problem to be solved…
Leadership and strategy are inseparable
Many leaders today do not understand the ongoing, intimate connection between leadership and strategy says Montgomery. These two aspects of what leaders do, once tightly linked, have grown apart. Now specialists help managers analyze their industries and position their businesses for competitive advantage, and strategy has become largely a job for experts, or something confined to an annual planning process. In this view, once a strategy has been identified, and the next steps specified, the job of the strategist is finished. All that remains to be done is to implement the plan and defend the sustainable competitive…
How can leaders expect customers/stakeholders to understand what’s important about their companies
If leaders aren’t clear about this, imagine the confusion in their businesses three or four levels lower. Yet, people throughout a business—in marketing, production, service, as well as near the top of the organisation—must make decisions every day that could and should be based on some shared sense of what the company is trying to be and do. If they disagree about that, or simply don’t understand it, how can they make consistent decisions that move the company forward? Similarly, how can leaders expect customers, providers of capital, or other stakeholders to understand what is really important about their companies if they themselves can’t identify it?
Strategy has been backed into a narrow corner and reducing it to a left-brain exercise.
Strategy became more about formulation than implementation and more about getting the analysis right at the outset than living with a strategy over time. Equally problematic, the leader’s unique role as arbiter and steward of strategy had been eclipsed. While countless books have been written about strategy in the last thirty years, virtually nothing has been written about the strategist and what this vital role requires of the person who shoulders it.
Bringing strategy alive
Montgomery brings strategy alive and argues convincingly that it is just another part( a very important part) of your business and you have to own it. You can’t outsource strategy.