Ready?
Some of the typical responses I hear include washing cars, delivering lunches and begging for money. Here's the "a ha" follow-up question: Which of your ideas could you turn into a $1 million business? How about $10 million or $100 million? I'm still waiting for the day when someone jumps up enthusiastically and runs out of the room to pursue their brilliant idea!
How the question is framed shapes your thinking and, therefore, the outcome. The same goes for strategic planning.
So the one question you must answer before setting strategy is
"What is our goal?"
Is the goal to grow the business to $10 or $100 million? That's the difference between grabbing a bucket and sponge to wash cars and creating a highly valuable, scalable, differentiated product.
Is the goal to achieve market share of x% or profitability of y%? That's the difference between Google's strategy to maximize Android market share (according to Statista, Android market share is approaching 90%) and Apple's strategy to maximize profits (according to Strategy Analytics, Apple Captured Record 91 Percent Share of Global Smartphone Profits in Q3 2016). Yes, I know that this isn't exactly an apples-to-apples (no pun intended) comparison, but you get the idea.
To get to the best possible outcome from your strategic planning process, start by getting all of your stakeholders aligned on the most important question to answer: What is our goal?
[P.S. I'm pretty sure that I did not come up with the $10 strategy exercise above...but I can't remember the source and I can't find one. I'm happy to acknowledge the source if anyone knows it.]
Nice article highlighting a "relentless attention to business fundamentals" attitude, Matt. I've also come to think of what is a goal vs. strategy very dependent on one's perspective. If you have a vision->goal->strategy->tactic structure, the strategy IS the goal from the tactical perspective. It is easy to bog down in "that's a strategy, no that's a tactic" during planning; in the end literally they are synonyms. From a business perspective I have found strategy and tactic to be differentiated simply by the time range they target. Okay, now back to thinking up $10 million dollar ideas...
ReplyDeleteThanks for the input, Karl. It's a little cliché, but I tend to think of the difference between strategy and tactics as the altitude from which you're viewing things. No doubt you've heard terms like "50,000 foot view" (or, to be more global, the "15.000 meter view"). If you think of looking at a map with the goal of getting from Point A (your current position) to Point B, you have a number of different options (or strategies) for how to achieve that goal. Based on the strategy you choose (say, crossing the lake vs. going around the mountain), the tactics could be very different. In this case, I see the strategy as distinct from the goal.
DeleteStill, I understand your point. We can certainly agree that it's essentially to balance the short-term/tactical planning with long-term/big picture/high level/strategic planning.
One more thing: please submit those $10m dollar ideas to me privately. :^)