Do you have the Winning Strategy For Your Business?
The COVID-19 pandemic and the resulting measures to contain the pandemic, including the circuit breaker and travel restrictions, have adversely affected economic activity globally. As Singapore enters Phase two of the circuit breaker, some activities are allowed to resume, and businesses that can operate began to see some light at the end of the tunnel. A Winning Strategy For Your Business is now key to emerge stronger and better than before
Some companies have started their rebuilding effort by developing strategies to face the new challenges. Formulating a strategy can be a challenge itself because businesses know how important it is and how it can change for their companies. Developing one can be a pain point because it is time consuming, frustrating and at the end of the whole exercise with a whole lot of effort put into it, you may not get value out of it.
We would like to take the opportunity to share a framework to developing and execute the Winning Strategy For Your Business: Playing to Win : How Strategy Really Works by Roger Martin and his co-author, A.G. Lafley, CEO of Procter & Gamble – the five essential questions at the heart of winning strategies.
Strategy is about the choices you make. You can make all the choices in the questions prescribed, and tie them together to make a winning strategy that is relevant to your business. This approach does not necessarily guarantee success, but it does increases your odds of winning.
You may apply the same five questions no matter the type, size or context of your business:
๐ 1. What is your winning aspiration?
๐ 2. Where will you play?
๐ 3. How will you win?
๐ 4. What capabilities must be in place?
๐ 5. What management systems are required?
By answering each question, you are making choices about what you will/will not do so as to create an advantage over the competition. Thus, by making key choices by answering the five questions, you have created the winning strategy.
๐ What is your winning aspiration?
A winning aspiration defines the purpose of your enterprise, its guiding mission and aspiration. Simply put, this is your business goal. Essentially, you need to know what it means to win in your business. An aspiration that sets you up to win focuses on winning your competition and winning over your customers.
Some examples of winning aspirations:
Starbucks Coffee โTo inspire and nurture the human spirit โ one person, one cup, and one neighbourhood at a timeโ
Nike โTo bring inspiration and innovation to every athlete in the worldโ
What is your winning aspiration? For example, if you were a restaurant operator selling chicken rice, would your winning aspiration be โTo serve my chicken rice to each of the 28 districts in Singapore, five districts per yearโ, or โTo increase my sale by 20% every yearโ?
๐ Where will you play?
Choose where you will play to win; choose to play where you have an advantage or have a distinctive element to your competitor so that you can focus your resources on your offerings.
Every playing field that you could possibly play on tend to be bigger than it is optimal to play on. Thus you need to decide
- Which market to compete/engage,
- Which customers or consumer segments to target,
- Which distribution channel to utilize,
- What product categories to offer,
- Which geographical area to focus on.
๐ How will you win?
How you win in the strategy is a function of where you play. Play to your advantage by understanding typically that there are two types of strategies or ways to win:
- Low Cost (NOT Low Price) โ Win on being low cost position than your competitor so that you can sell at the same amount as your competitor and earn a higher return. You can also lower the price to capture a larger share of the market. An example of a Low Cost play is Walmart.
- Differentiation โ having a unique proposition that is more attractive to your customers who are then willing to pay a price premium for. Apple and Tesla are current players which win based on differentiation.
Set your business up so that you will employ one strategy at one playing field. For example, if you are going to engage in a price sensitive consumer group then you should employ the low cost strategy to this group to be able you to capture market share by lowering your price if you need to without hurting your bottom line.
๐ What capabilities must be in place?
Capabilities are the activities that enable companies to bring the where-to-play and how-to-win choices to life. When you alter a strategy, the current capabilities may not be adequate to set you up to win. For example if you decide to make a change on your business model from offline to online, you will need to build your capabilities on digital marketing, IT systems, and even logistics management.ย With the capabilities in place, you are now equipped to deliver on your strategy.
๐ What management systems are required?
Management systems are the systems that build, support and measure a strategy. These can be the processes, structures, and rules to ascertain and ensure that the strategies are working. This system can be in form of non-conformance reports, records of training, performance metrics or KPIs, etc.
As the questions flow down in a cascading manner, all choices have to link back and fit in with one another; each choice has to reinforce one another so that the strategy will work effectively. It is an iterative process in which all choices influence one another and must be taken into account together. For example, if the winning aspiration is to be a technology innovator, the where-will-we-play cannot be a tiny market because technology development involves huge cost and thus the market should be big enough for scaling.
Once all the questions fit in and tie logically with one another, you are all set up for winning in your playing field. The intent of the strategic choice cascade is to provide a clear and powerful framework for thinking about winning choices, a shared language for thinking about strategy within your company and a playbook for developing that Winning Strategy For Your Business.
As Singapore moves towards easing restrictions, affected businesses are trying to pick themselves up from the bump, move in the right direction and gain momentum. Companies would have a better chance of winning in a marketplace if they have a strategy. That must be a strategy to win, and your odds of success would increase if you make clear choices about where and how to play.
References:
- https://rogerlmartin.com/thought-pillars/strategy
- https://hbr.org/books/playing-to-win