There are literally thousands of books written about strategy. But at its heart strategy is about being able to answer the following five questions.
1) Why do we exist?
The answer to this question gives your company both meaning and purpose. Strategy experts often call this the Purpose Statement or the Mission Statement. It should be simple and clear to express what is at the heart of the business. It adds noble purpose and aspiration to the enterprise.
2) How should we behave?
The answers to this question depict the DNA of the company. The answers convey not only what the desired behaviour is but also what it isn’t. The experts in this field will call these the Core Values. They are more than simple “permission to play” values such as honesty and integrity. They express the inner spirit of the team, the type and tone of behaviour, the ethical pillars of the company. Values are the filters that drive our decisions and therefore our actions.
3) What are we good at?
These are often referred to as Core Competencies. The answers will tell us where to start and what to build on. These are the processes, the procedures; the skills that you are the best at, or can get better at than anyone else in your industry. In many ways it is the starting point of strategy. It is the strengths of your company that you build on or add to in order to grow.
4) Where do we want to end up?
Every company needs a sense of direction in order to grow. This is the long-term outcome for the company. Often referred to as Vision, Jim Collins calls it the Big Hairy Audacious Goal (BHAG). It depicts where you are going and where you want to end up ten years or more down the road.
5) Why should customers do business with us?
What is the compelling reason for customers to buy from you or to use your service? It isn’t usually priced. It needs to be the customer’s reason, not your reason. It addresses the needs, the pains, if you like, of your core customers and spreads to other customer groupings. This is often referred to as the Brand Promise or Value Proposition.
Like many of the concepts I work with, the magic doesn’t happen by providing quick answers to these five questions. The magic happens in the debate and the argument that has to precede answering these questions.
It is in this argument, this debate; it is in the passion and the emotion of the discussion that the leadership team will eventually align on a shared vision, a shared strategy that they can explain and articulate with passion, emotion and conviction.
This then becomes at the same time the bedrock and the guiding light for the progression and the growth of the business.
A strategy isn’t a dry dusty academic concept. A strategy is the ‘how’ that supports the reason that we have for existing at all. It is that fundamental.
I would like to acknowledge fellow Gazelles Certified Coach Michael Synk and his book “Rock and Sand” for providing such a concise and easily comprehensible explanation of these five strategy questions.