Is your strategy realistic?

Read time: 4 minutes

Hey there 👋 - it's Brian.

Just landed in Ecuador to spend some time with family. I haven’t been here since pre-COVID so my Spanish is a bit rusty. I’m hoping to get it back in the next 2 weeks.

Now for some strategy.

Today’s issue will be focused on how you test if your strategy is realistic. A great strategy will accelerate your growth, but only if you can make it a reality.

The exercise we're about to run through, helps my clients understand 2 questions:

• “Is this strategy possible to execute in a reasonable amount of time?”

• “How do we change the business (culture, processes etc) to maintain the strategy?"

Let’s get into it:

First, a quick refresher on strategy and competitive advantage

In the last two issues we talked about what makes a strategy (click here) and how to decide what your competitive advantage will be for your business (click here)

Quick summary:
Strategy = figuring out what things you'll do better than competitors (or what things you'll do differently) to give you an unfair advantage and help you win.

Competitive Advantage = Choosing where you'll focus (ex: offerings, customer types, geographies) and how you'll win in those focus areas.

Now that we're up to speed, a few new questions to think about:
• What will we have to build/buy to make our strategic choices a reality?
• Will we have to invest to too much money? Time? Resources?
• How do we set up our business to maintain these changes?

Let's figure out how to answer these now:

What will we have to build/buy to make this strategy a reality?

For each strategic choice you've made, you'll need certain capabilities to make them a reality.

Capabilities include:
• Processes (examples: approval processes, workflows)
• People (examples: training, new leadership)
• Culture (examples: customer-centric culture)
• Tech (examples: new software, databases, analytic tools)

For example - if your strategic choice is:"We will focus on LinkedIn and Twitter content creators in the business niche. We will win through an ecosystem of exclusive partnerships with top business creators."

You'll likely need new:
• Processes for customers to interact with influencers
• People who have relationships with influencers
• Culture that is engaged online in the business niche on LinkedIn and Twitter
• Tech to analyze impact of each influencer

This is a non-exhaustive list. You'll want to write many more for your own business.

How much do you need to invest in capabilities?

Now, write down the difference between the capabilities you currently have and what you'll need to make your choices happen.

In other words, what do you need to upgrade? Buy? What does the end state look like?

How much time / money / resources will you need to invest to get each capability working to make the initiative happen?

In one of the next issues, we'll talk more about how to know which initiatives you focus on first, but the short answer for now: the initiatives that require more investment, will likely be de-prioritized for high impact/low investment initiatives.

How do we maintain the strategy?

We use "management systems" to maintain the capabilities you listed out in the previous section.

For example, if talent is your competitive advantage, the related management system is investing in high salaries, extensive interview process, and training.

Write down the management systems you need to maintain each capability.

3 types of management systems (according to Roger Martin - link at the bottom):
1) Outsized investment (example: resources, time, money)
2) Unique approvals (example: giving frontline workers approval rights that managers typically have)
3) Non-standard measurement/tracking (example: tracking customer complaints to a level no other company does)

You'll notice they are all "exceptional" (outsized, novel, non-standard).

This is critical because, friendly reminder, if it's standard for the industry, it's a best practice and doesn't give you a competitive advantage! Only write down what's exceptional.

Ready to determine if your strategy is realistic?

Great!

If you want help, reply to this email with "I'd love help with my growth" and I'll point you to resources to help.

I read every email and will answer your questions in future content.

Clickworthy Resources

• Article: The Role of Management Systems in Strategy, by Roger Martin (Click here)

• Article: Distinguishing How to Win from Capabilities, by Roger Martin (Click here)

• Newsletter Issue: What is Strategy?, by Brian O'Connor (Click here)

• Newsletter Issue: Guide to building your strategy, by Brian O'Connor (Click here)

Hope it's been helpful!

If you enjoyed it, please forward this email to friends looking to grow their business.

See ya next Thursday,

Brian