Don’t forget the strategy!

Many tactics can be mistaken for business strategy.

Geoff Wilson

Have you ever been part of a “strategic” effort that just doesn’t feel … strategic? For example, I’ve written about how “strategic” cost-reduction efforts can become merely “whacking.” That’s the kind of thing I have in mind, but there are many others.

I’m reminded of a classic (to me) scene from the movie “Revenge of the Nerds”. John Goodman, playing a college football coach (and looking as svelte as I’ve ever seen him), delivers a speech to his team on the field about the importance of homecoming. He gets the players really fired up about it. They get so amped up, in fact, that they—as victims of a practical joke involving jock straps and liquid heat balm—run off the field and into the locker room after the speech. Here, see for yourself:

The coach, oblivious to the practical joke, simply yells “Shower up!” at the end of his speech. As his players frantically sprint into the locker room, he looks at the ground and says a powerful thing, almost in passing:

 “Sh*t, we forgot to practice.”

It’s that end point that’s important: “We forgot to practice.” The coach expends all of his and his team’s energy on a speech and forgets the core activity of the moment.

How often do you go through strategy efforts and end up saying “Sh*t, we forgot to do the strategy”? Here are some examples I’ve seen.

  1. Forming a strategic “show” for the board vs. a strategic plan for the business. The board wants a strategy; you deliver a shiny document. Seems like a fair trade, right? No. The dazzling document is the equivalent of the coach’s speech above. It makes the business the object of the conversation vs. the subject of the conversation. The board is the subject.
  2. Mistaking a financial model for business strategy. A good financial model has to underpin a good business strategy, but a business strategy is not a financial model. If your strategy is to gain 200 bps of margin through SG&A reduction, you’ve set a goal, but you haven’t set a strategy. This brings me to my next point …
  3. Mistaking organization for strategyThis one cuts both ways. It may be very strategic to reorganize, but tell me why. If your answer is that you end up with lower costs, then great. Tell me about your cost-leadership strategy: How does that create a sustained competitive advantage in the market? If you can’t answer that, you’re likely not forming a strategy. The same can be said for a strategic hire. I once advised a CEO that his VP of HR would be the most strategic hire he would make—in this case because of shoddy systems, style, engagement, and a host of other ills that the hire would be tasked to cover. There was strategy behind my recommendation, but too often our shiny new hires come with no strategy behind them.
  4. Missing the market. Management teams often fall into this. They forget that the reason for a company’s existence—really any organization’s existence—is to serve someone else. That’s the only way value is created. However, too many strategy efforts are focused inwardly. In fact, points 1-3 above can be summed up that way: They are internally focused failure modes. If  you’ve forgotten the market, you’ve forgotten your strategy.
  5. Using “strategy” as code for “my agenda.” You don’t see this one too often, but occasionally executives spin up elaborate strategy efforts to get to answers they already have in their heads. That can be fruitful if the answers are grounded in fact and built for the market, as it brings other people on board. However, if the strategy effort is simply a ruse to quiet the masses while pursuing an adverse agenda, the executive has missed the point.

Those are a few examples, but there are many other ways to forget strategy. Some of them come while running the business and others while leading people. Strategy synthesizes market, organizational, financial, and other knowledge sources into direction via a logical argument. If you take only one element and make that the strategy, you’ll fall short.

Don’t be left staring at the ground and saying “Sh*t, we forgot to do the strategy.”

What do you think?

Your organization is a good expression of your strategy, so get it right

How you allocate talent and prioritize functions directly reflects your business strategy.

Geoff Wilson

What is an organization, really? It’s almost that time when many companies begin hard discussions about budgets for next year. In most cases, that conversation crosses at least partially into the topic of organization structure, so it’s good to think about what an organization really is.

The old-school theory of the firm argued that firm structures form at the point where owning a service is more efficient and valuable than buying a service from another firm. It’s usually more efficient for you to own your own sales force than to try to get alignment with a third party to outsource sales (or to hire sales people like day laborers). Therefore, one discussion about organization structure must consider the own-vs.-rent decision.

On another axis, a firm really exists to do two things: capture opportunities and manage risks. Those two objectives aren’t always mutually exclusive to individual parts of the organization (for example, a CEO has to do both, as do many other people in the organization), but they are the two considerations when designing an organization.

A third axis of organization decisions involves what I’ll call centering. In a given company, there is efficiency to creating centers of skill in some cases, and to distributing skill in others. You might easily centralize procurement operations, but you might need to keep your sales force distributed and close to the customer in order for it to be most efficient. This is the old division-of-labor argument that is subtly written into every organization: Do you expect your general managers to be great at HR and IT, or are those functions better handled by true experts elsewhere in the organization (or by outsiders, if you’re thinking about own vs. rent as noted above)?

The interesting discussion during the annual budget cycle should then be on four levels:

  1. Have we established the right boundaries for our firm? Should we stop doing some things in house that somebody else can do effectively? Should we rent vs. own? Many companies have decided to outsource activities that were traditionally in house. Information technology is an example of a function that is easily outsourced to a third party that is both better and more cost-effective than in-house operations. One cautionary note: Don’t outsource your competitive advantage.
  2. Have we covered key risks with the right organizational investment? Legal, human resources, accounting, finance, credit, and many other areas are examples of risk-management functions (in most cases). They are investments made to manage risk, not necessarily to capture opportunities.
  3. Have we covered opportunities sufficiently? This is usually the toughest of these questions for companies to answer with confidence. Do you have the right investment in product development, engineering, sales, and other potential revenue-producing resources. I’m always struck by companies that consistently operate understaffed—at least a person or two down—on their sales force, but never allow their accounting function to be shorthanded.
  4. Have we centered and distributed functions appropriately? Are there competencies that need to be concentrated and improved? Are we properly structured to ensure we get the best of those competencies and the best distribution of their use across the company? A good example of this can be R&D staff. They may be best placed in a center that can allow quick knowledge sharing and effective processes vs. having a broad set of individual researchers spread throughout a company. But they also might be best positioned right next to the customer in a distributed form. Your mileage may vary.

As you look at your organization, can you answer these questions? I’m not sure most management teams can. Like my anecdote about companies with fully-staffed accounting functions yet people-starved sales functions, I see resource imbalances in organizations all the time. One company I encountered had an accounts-receivable function that was staffed with excellent people, and many of them. In fact, the company had more and better talent evaluating customer-credit decisions than it had in pretty much any sales function. That allocation of talent says a lot about management’s priorities.

I’ve noted in past posts that your budget is the best expression of your strategy. It turns out your organization is a pretty good approximation of your budget.

Now, what do you think? Share your thoughts on this topic.

Be who you are, especially in business

Strategy must solve for the core before testing boundaries.

Geoff Wilson

Remember when Michael Jordan left basketball to be a professional baseball player? The topic was covered by an ESPN “30 for 30” documentary, “Jordan Rides the Bus“. It wasn’t a total disaster, but it does make you cringe to think about. The greatest basketball player of all time took significant time off from his main sport to play baseball. Jordan was basketball. Basketball was Jordan.

Google, a company that is fantastically sound in its core business of search-targeted advertising, has spent millions (perhaps billions) looking for the next big thing. Nevertheless, a huge portion of Google’s revenue and profit comes from its AdWords platform. AdWords is what Google “is.”

While my home state’s Birmingham Barons loved the spectacle that Jordan offered them by testing the baseball waters, and though Google has doubtless made many millionaires by dipping its toes into new venture areas, both of these anecdotes offer lessons for those of us who focus on strategy. Strategy, in so many ways, is about being who you are, first—then testing the boundaries.

I have the pleasure of serving many companies on strategic issues. I’ve now consulted with well over 50 companies at the top management level. Without a doubt, the biggest strategic blunder management teams commit is chasing shiny new things at the cost of their core business.

Loss of focus on the core is the critical risk for a business in transition. Companies have core assets. Those may be people, machinery, locations, patents, or products. A strategy that ignores the core is likely to fail.

Why? It comes down to risk. Let’s use Jordan as an example. When he played basketball in the 1992 Olympics for the United States’ famed “Dream Team,” he had to adapt to a new style of play. There were different rules, a differently shaped key on the court, and the 3-point line was at a different distance. He even had to watch out for being called for traveling, which is rarely enforced in the NBA. But it was the same ball. It was the same dribble, drive, shoot he’d mastered for years as a pro, and he was successful while the Dream Team dominated its way to a gold medal.

What about Jordan’s foray into baseball? Well, that was a different story. Baseball was, literally, a whole new ballgame. Different ball, different skill set, different rules, and different player mentality. It was a whole new world. Jordan hit for just a .200 average in the minor leagues. The whole scenario basically proved he was a fairly flexible athlete, but a very average baseball player.

See the issue? New ball, new rules, new skills, new mindset? Jordan tried to enter a change of pace that had too many degrees of uncertainty. Companies do this all the time. They seek to enter arenas with new technologies, new customers, new channels, or all three—and they commit resources that should probably be focused on their core businesses.

Combining the risky trifecta of new customers, technologies, and routes to market with your existing skills is a recipe for disaster. Doing it at the expense of your core business is just plain obtuse.

I once served a diversified firm whose explicit, vociferous strategic focus was on new product development within a very narrow set of businesses, but whose bread and butter was really in driving cost reduction within a vast core business that wasn’t pursuing a cost-leadership strategy. You get that? To be clear: Driving cost reduction as the key strategic move while not pursuing a cost-leadership strategy is, in itself, a strategic blunder.

Though this company’s new product-development areas were promising, they were also extremely long cycle. And they ate a tremendous amount of resources (as those things sometimes can). Still, management treated the core business as if it were on autopilot while suckling away at the cost-reduction teat without a discernible cost-leadership end point.

The issue with this is that strategies have to be focused against end games, and this particular company had a vast core whose strategic end game left the company itself out of the mix. It would not be a cost leader in its market, but was depending on cost reduction to ensure its financial performance. Meanwhile, new initiatives focused on new technologies, customers, and channels—not to mention new skills—were front and center, resourced heavily but not exclusively, and extremely long cycle to maturity.

The end result of such a quasi-strategic scheme is predictable: a stumbling core and an immature periphery. Why? Because the core business in such a scenario has such mass that a trip up in the core overwhelms any “big” wins in the new, new thing. The core would eventually trip, and the periphery would not be significant enough to save it. It’s the industrial equivalent of the savings and loan crisis: savings and loan institutions borrowed from depositors’ short-term funds and lent long term, automatically setting up a liquidity crisis somewhere down the line.

You have to focus on the core, no matter how ugly it is. The core is your short and intermediate term. You have to be who you are.

The lesson is this: Your core has to have a strategy, and that strategy must reflect who you are in terms of strengths, skills, and competences. You can (nay, must) look for the new, new thing—but you must do it with a core strategy that is effective, extensive, and sound.

Now, none of this matters if you are fat and happy. If you’re a multi-millionaire athlete who has millions upon millions of dollars in endorsements (like Jordan did), or if you’re a high-margin juggernaut like Google (excuse me, Alphabet, Inc.), you can afford to emabark on a diversion that is totally against your strengths.

But if you’re like most of the world, you have strengths, and you only have a finite amount of time to exploit them. You also have a finite amount of time and resources to commit outside your strengths. Be careful with those.

Be sure to form a strategy for who you are first, and then keep a little margin to test who you might be. It can be a liberating thing.

What do you think?

A business strategy that’s everywhere is actually nowhere

If you define your strategic focus too broadly, you don’t have a strategic focus.

Geoff Wilson

Remember when Steve Jobs returned to Apple in the late 1990s—more than a decade after being fired from the company he co-founded? Apple lore says one of the first things he did was cut through all the diverse initiatives and products to establish four focus areas with a very simple matrix. On one axis was “Pro vs. Consumer” and on the other was “Portable vs. Desktop.” By doing this, Jobs created a relentless focus for a relatively large organization around only four possible core products.

What are you relentlessly focused on?

That question is a good test of your strategy. If you can answer it honestly, you probably find that “focus” can be a hard thing to pin down. Many business strategies start with goal-based focus areas: grow revenue, reduce cost, improve delivery time, etc. The problem with goal-based focus areas is they rarely constrain the scope of activity enough to create real focus. You end up “focusing” on something that actually can drive a lack of focus.

Focusing on sales growth is a great example. If you’re focused on sales growth, any sale might seem like a good sale. You might take that really complex deal that promises a lot of revenue at the expense of working to develop a customer base that is both simpler and more profitable over the long term. Your sales “focus” creates strategic diffusion.

And there’s the rub. Your relentless focus shouldn’t necessarily be on a goal, but rather on an outcome that creates sustainable advantage. Who cares if you grew sales 20 percent last year when the way you did it isn’t profitably replicable over time? The Steve Jobs example above is actually pretty vague: We are going to focus on four product types. But it created focus on being great in four areas, and four areas only, on the way to broader success on the metrics. The rest is history with Apple.

This post is not to denigrate tactical wins. If you have the capacity and can afford the distraction, by all means, take the money or invest in the new thing. Apple certainly has. But all too often a distraction breeds more distraction. It also creates confusion for those who don’t know the difference between a tactical decision (“Sure, we’ll take that complex project.”) and a strategic aim (“We aren’t strategically focused on complex projects.”).

The takeaway from this one is simple: If you define your strategic focus too broadly, you don’t have a strategic focus.

What do you think? Share your thoughts in the comments section below.

May the Force be with your business strategy

How do you create change? Move. How do you overcome inferior mass? Move faster.

Geoff Wilson

Strategy is a combination of direction and applied force. It’s the force of assets deployed, talent assigned, new products launched, or new initiatives driven. In short, strategy is applying what you have to achieve what you want.

But wait a minute. What if what you have isn’t enough? What if your assets, talent, products, and other “things” are inferior? What if you just think they might be inferior? Well, I have news for you.

The laws of physics teach us about force. Newton’s second law states that force—the “thing” that creates change in the motion of an object—is derived via mass and acceleration. That is to say, if you want to create a change in something, you have to use a mass and move it at some rate over time.

So what does that mean for a business strategy? It means two things:

1. If you have a mass of assets to apply, you need to move them in order to create change.

You can’t just sit on your laurels and expect change to happen. This is a key issue when it comes to critical strategic moments in a company’s life. Need to change the basis of competition in your market? Better get moving, redeploy assets in a new configuration, and do something rather than do nothing. (And no, I’m not imploring you to just “do something.” Think first.)

When we look at well-worn examples of companies that shape and reshape industry segments, we see constant motion. Walmart stores look nothing like they did 25 years ago. Walmart has led all these years not by sitting still, but by shaping and reshaping a set of retail concepts around a juggernaut of a supply chain. They created force by maintaining a massive base of assets in a constant state of acceleration.

2. If your mass of assets is inferior, you have to move faster than the competition.

That’s right, you can overcome inferior mass with superior acceleration of the mass. What this means in business is that you can, in fact, outwork the other person. You can move faster than the competition.

Some might say this is exactly what Samsung is currently doing to Apple. Samsung has settled into a device product-launch velocity that is a multiple of Apple’s. While Samsung may not have Apple’s brand and market weight, the velocity of what it does have is applying real force to change the market.

So, if a strategic direction is known, here’s the question that should come to mind next for the management strategist: How are you applying force? Are you relying on massive assets moved at a steady pace, or are you counting on a rifle shot—a bullet fired at high velocity—to achieve change?

How do you create change? Move. How do you overcome inferior mass? Move faster.

Don’t just take it from me. Take it from one of the most brilliant military strategists in history:

The strength of an army, like the momentum in mechanics, is estimated by the weight multiplied by the velocity. A rapid march exerts a beneficial moral influence on the army and increases its means of victory. – Napoleon Bonaparte

What do you think? Is the force with your strategy?

Strategic planning means knowing how to deal with uncertainty

It’s crucial to know when your need more data and when you need more action.

Geoff Wilson

When it comes to business strategy, it can be tough to know precisely where you are and where you are going, so be sure to cycle between the two constantly. Here’s another post that speaks to the value of fast cycles to your strategic plan.

Renowned physicist Werner Heisenberg’s uncertainty principle states (roughly, folks) that the more you measure one property of a particle (its velocity, for instance), the less precise you will be when it comes to measuring another property (its position, for example). Extended to the world of business strategy, this principle lends some fascinating insights.

Let me list five:

  1. The basic knowledge that there is a tradeoff to measuring multiple things at once in a complex system. You have to measure, but you also must know the limits of your ability to measure.
  2. The more you try to measure one thing, the less precise you fundamentally become on the others, all else equal. This is true of companies that spend too much time on employee engagement and drop the ball on operations. And it’s true of the operator who focuses too much on throughput and not enough on quality.
  3. The more you focus on where you are, the less you can know about how fast you’re going. Information you gather that tells you where you are is already old by the time you absorb it. Think about analysis paralysis. It’s real.
  4. The reciprocal is true as well: The more you focus on action, the less you can know about current position. The fog of war is real, too.
  5. This last one is probably the kicker for me: The better you understand your current position, the more you should know you’re probably not focused enough on momentum and action. If you’re working the financials two places to the right of the decimal point, and you aren’t a hedge fund or a bond trader, your inaction is probably showing.

And here’s a bonus insight: Your organization is not subject to the laws of quantum mechanics, so know when you need more data and when you need more action. The best answer to this tends to be finding the right “loop lengths” for different processes in your strategic management approach. And cycling through them faster than the competition.

If these things are true, then let me ask you: Why do you allow yourself to try to measure so many things so precisely?

I’m interested in your thoughts on how to trade off measurement of position with measurement of action. What do you think? 

Who’s your customer, really?

In a “customer-centric” world, we too often lose sight of the customer.

“But I paid no attention to what mattered most”

— Ty Herndon, “What Mattered Most”

Geoff Wilson

I’ll level with you: I espouse a professional-services ethic that is decidedly “client first.” It’s frustrating to some who have worked alongside me, and perhaps edifying to others. I’ll write on where it comes from one of these days.

What “client first” means for me is this: If you’re working for or with me in serving a client on a project, the only productive discussion is one that reasonably focuses on the client mission within the defined scope.

However, I’m also experienced enough to know that not all service providers are bought into this mentality. WGP has at least once engaged specialist consultants who simply can’t step outside of their own rate structure to figure out what is best for the end client (or even WGP as their own client). The “job” is to spend time on an account and to bill fees.

What a boring mission. What a boring definition of “customer.”

In that mode of consulting, the product is hours or days of work, and the customer is actually the consultant, who seeks ways to serve herself through development of fees. The true client—the “Big C” client paying the bills—is incidental to the process.

If you employ consultants or employees who focus more on their time, their process, and their rights than on your problem to solve, you are incidental to the process. You’re like Facebook users—important to the business model because you make it go, but incidental to the business.

If you’re an executive, you have multiple customers: likely a boss, board, shareholders, and the Big C customer. And you have yourself. If you find yourself trouncing Big C in order to please your other customers or pad your income, you’re probably doing it wrong.

Some of the best consultants and executives I know make income, fees, and work nearly incidental to the client relationship. Good service is well compensated, unless you do work for bad clients (or bad bosses). But then again, why would you want to help them?

The “client first” model that we work hard to champion at WGP is simple: Listen, bring something new, do real work. Too many in professional services do too little of each of these, and then wonder why they look and act self-centered.

The key is in knowing who the customer is. Do you know yours? Is it the Big C customer, or some other customer you’re serving.

What do you think?

To succeed at strategy, you have to move fast … AND slow

The key to strategic management lies in balancing fast decision loops with slow decision loops.

Geoff Wilson

The longer I live, the more I realize that life is all about the pace at which you make decisions. But that doesn’t always mean really fast is best.

I’ll use the concept of the “OODA loop,” made famous by Air Force Col. John Boyd. The idea is that strategic action depends on establishing and executing on decision loops that run from observation to action and back again. OODA stands for: observe, orient, decide, act. A strategic actor needs to establish and execute this loop in order to act effectively within a competitive environment. And cycling faster than the competition creates an advantage.

But (and this is important), the pace at which a manager must “loop back” to ingoing assumptions about a strategic variable changes drastically based on the factor and the business environment. You can think about this practically by envisioning the difference between the fuel gauge and the throttle position in a race car. The race car driver likely assigns the fuel gauge a decision loop that runs minutes or longer during most of the race—the driver looks at the gauge and establishes an action plan at least every few minutes. The throttle has decision loop that is drastically shorter—fractions of a second at times.

Different variables mean different loop lengths. This is a crucial concept in business management and strategy. I’ve been in the middle of discussions at technology companies that involve planning for growth in a specific, established product line that exceeds 100 percent per quarter. And I’ve spent much of my career amid product lines that do well to eek out a couple of percentage points of growth above GDP. Both circumstances had something in common: They required sets of very deliberate strategic decisions, and they required sets of very rapid ones. They had long loops and short loops.

The loops didn’t look the same in both instances, but there were fast ones and slow ones. And the same is the case with your business. You not only need to know the variables to manage, but also the loop lengths you handle them within. In strategic management, there are short loops and long loops. You have to know the difference.

Short-loop strategic variables might include:

  • Staffing
  • Marketing and sales plans
  • Account plans
  • Flexible capacities (shift structures)
  • Customer feedback cycles
  • Product enhancements

These items have loop lengths that range from days to weeks—or, in some businesses, maybe a quarter. They are highly strategic (being resource allocations and positions), but many people think they are tactics.

Long-loop strategic variables might include:

  • Workforce planning
  • Technology roadmaps
  • Asset footprints
  • Market assessments
  • Statements of strategic intent
  • Overall organization structures or operating systems

These items have loop lengths that, in most businesses, last at least a year. Management “OODAs” on them on an annual basis (in the case of strategic intent, often much longer).

They key to strategic management, then, just might be establishing the variables and loop lengths that matter for your business. A business in the semiconductor space likely can’t afford to wait for annual strategic planning if the industry moves in six-month cycles. Likewise, pushing a regulated utility to do monthly strategy updates might be a waste of time—the world just doesn’t move that fast.

Where this gets really useful is when you start to see your day-to-day activities get out of sync with your expected loop lengths. Perhaps you know it’s time to act on that staffing problem you’ve had for months now, but you just don’t have the energy to do it—you are “off loop” and likely off strategy, as it were.

One thing is for sure: You have to establish what fast and slow are, know what variables fall into the two categories for your business, and learn to lead them both.

I’ll continue to develop this further, and would love your thoughts on this one.

Welcome to the real, messy world

Like the real world, real business isn’t as simple as you’d like it to be.

Geoff Wilson

I’ll confess, I’m a bit of a strategy junkie. You don’t have to be one to do what I do, but it helps. However, if you read my writing much, I hope you come away with a sense of the practical bent that I bring to the topic. The real world is the real world. Just as any engineer will tell you that lab scale processes rarely translate directly to production facilities, financial and strategic models rarely reflect reality—at all.

The below image was shown at a recent annual meeting of a private equity firm we have the privilege to serve. It shows indexed revenue and EBITDA performance over the life of a fund’s portfolio. Each line is a portfolio company. Lines that trend upward are green. Downward lines are red.

Keep in mind, this is a top-performing private equity fund. Returns for this portfolio were excellent. What do you see? The real world.

Each of those lines depicts the outcome of an actual business. It’s the result of some management team’s hopes and dreams. Those businesses were probably planned using relatively linear models and margins. But what you get is actual sausage making. And I’ll say it again: This is a top-performing portfolio.

The real world is sausage making. Real business comes with randomness, particularly in companies that are working to make things happen.

If you consider it failure that some parts of your portfolio might not stay in lockstep with your linear growth expectations, you probably don’t understand the nature of risk taking and enterprise building. You might be more comfortable investing in CDs.

The real world is messy. This is good to keep in mind when you’re futzing with a financial model that implies a precision that your business outcomes will never achieve.

What do you think?

The danger of “only winning” in business

Only beating the competition isn’t strategy.

Geoff Wilson

What a week it’s been on the political scene. We saw U.S. Senate Republicans almost (thanks to John McCain’s last-second “no” vote) pass an absurd bill to effect the “skinny repeal” of Obamacare. The bill would have stripped the economically rational parts of Obamacare (the mandates) and left the rest.

The bill was so ridiculous that Senate Republicans actually didn’t want it to be passed by the House and sent to President Trump for signature. Some just wanted to make a symbolic move in the name of winning something on healthcare.

The bill was an act that focused on “winning” against a foe, but it was ultimately grounded in no vision whatsoever for the future health of the country (literally and figuratively).

Strategy focused only on winning against the competition may not be enough

“We won the battle but lost the war.” You’ve heard that plenty, I’m sure. It’s a tired adage. The problem is that modern organizations are rife with battles yet extremely light on defining of the war. A case in point would be your functional organizations, which may define winning in ways that have nothing to do with the mission of the greater company. Your human resources team wants to hire and train, your supply chain team wants to source cheap raw materials, and your engineering team wants to create a better mousetrap. Which of these three investments make the most sense for the company? Who knows.

The same is true for business managers. So many business strategies are built on beating the competition that doing so has come to define strategy. But what if the competition is playing the same tired game? Who’s out there looking for ways to deliver value to customers that the competition hasn’t thought of yet? One of the reasons the book Blue Ocean Strategy by Chan Kim and Renée Mauborgne has captured so many imaginations is that it has exhorted us to look for ways to deliver value that others have not figured out. The concept is literally “find out where the competition isn’t,” but in a way that implies innovation in that void, not mere presence.

But doing so requires vision

The major issue with applying this “more than winning” approach to strategy is that it takes time and expertise—it requires vision. You need to have the time to think of strategy as avoiding the competition and focusing on the vision for the customer. And you have to have the expertise to actually figure out how to do it. Chances are there aren’t many people in your company who have both the time and the expertise.

The U.S. Senate nearly taught us this week that only focusing on winning against a foe can lead to really stupid outcomes. Absent a compelling vision for how to deliver stable, cost-effective health care to citizens via regulatory boundaries and mandates (an admittedly hard thing to do), the Senate simply aspired to do something to beat the competition. May your own strategy avoid such a ditch.

Now it’s your turn:  How have you seen this sort of thing play out in your career?