As we work with business owners to develop strategy, we are regularly met with the hurdles around building a shared understanding of strategy. A regular topic of discussion concerning business and technology strategy is that businesses confuse operational effectiveness with strategy, and that believe they are being strategic because they are good at what they do, or that they use technology, or have the best people.
Let’s call it out. Anything that your competitors can do that you can do is not a strategic advantage, it’s not defensible and it’s not sustainable. Eventually your competitors can, and will, catch up.
Operational effectiveness – which can form part of a strategy and is often linked with efficiency – is akin to continuous improvement, maintenance, and streamlining. For some it can be a false sense of strategic predisposition, that “we engage with our customers” in areas such as gathering and interpreting feedback from internal and external stakeholders to refine a process or improve products and services. Again, this can be a strategic activity, but is in not itself a strategy.
Yes! new capabilities can come from implementing these improvements. For example, digitising processes, utilising CRM and information systems, as well as automation, are improvements. These do not necessarily translate directly to lead growth or enhance customer retention but can form the strategic levers of change.
Effectiveness improvements may help you reduce overhead, expose more margin, increase quality, or reduce price for consumers. Strategy, however, is concerned with assembling and uniquely deploying capabilities to realise the outcomes of success. For example, implementing information systems or going ‘Cloud’, or changing suppliers and external partners in isolation does not directly link to success, but as part of an overarching business strategy – linked to technology, supply chain and logistics through tactical execution and operational plans – can be deployed strategically to maximum effect to create a sustainable competitive advantage. This is the essence of developing strategy.
Remember, it’s about uniqueness – the uniqueness in the assembly of, or ability to solve the problem to satisfy the needs of your customers better than your competitors.
How are you uniquely positioned to do it better than the rest?
Thinking then about the tangibility of strategy, it must be real for everyone within the business. Leadership is about bringing people on the journey, strategy is the roadmap, and everyone should have visibility, understanding and definition about the role they play and the underlying drivers of change – essentially the “why?”.
Strategy needs to be adopted!
If you’ve made it this far, and you’re now coming to grips with the fact that I’ve called it out, maybe you’re not actually being strategic. Remember, you may be operationally effective, which can form part of the strategic agenda, but, critically, they are two very different things.
It is time to invest in strategy!
If you’d like to know more or need help in developing a strategy, contact us engage@alignedstrategies.com.au
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