CEO Strategy Handbook Cover
I'm delighted to announce that my new book, The CEO's Strategy Handbook, is now out and available direct from my website, Amazon, and, as they say, all good bookshops! Distilled from my work with market-leading companies including Alliance Boots, Nectar, Avon Cosmetics, and Morrisons, I guarantee that the pages contain techniques that will immediately improve the performance of your organisation.

You can find out more about the book, download a chapter for free, and buy the book by -just click here.

 

This month's article is.... 

The Strategy Arrow 


When it comes to defining a business strategy, most executives take a similar line to that adopted by Justice Potter Stewart of the US Supreme Court when he once struggled to describe 'hard core pornography' and simply said, "I know it when I see it." Stewart's view is all very well when you're reviewing a strategy, but if you're developing a strategy from scratch it's helpful to have a clearer approach!

 

One of the key concepts in my book, The CEO's Strategy Handbook, is that of The Strategy Arrow. Like an arrow, a great strategy is fast, direct and has cut-through. There are four key elements to the strategy arrow:

  1. Your #1 Goal. The point of the arrowhead is your top goal. I have written previously on the importance of identifying which goal, above all others, is your most important. Once you have done that, the rest of the strategy process and the alignment of the organisation becomes a lot easier. The goal is not an ambiguous vision statement, but a quantifiable measure of performance. For Southwest Airlines the #1 goal is to be the lowest fare airline, and for BSkyB the #1 goal in 2005 was to grow from 6 million to 10 million subscribers by 2010. What is your #1 goal?
     
  2. Where You Play. Supporting the very tip of your arrow are the two wings of the arrowhead. The first is 'where you play' or the scope of your business. This means that you must articulate your target customers, your products and services, the channels by which you reach your customers and your geographical reach. You should describe your current scope and playing field, but also define what you wish your playing field to be in, say, three years' time. The critical insight is that you should not simply follow the playing field of the leader in your market, but set out your own playing field. Once you do that, the impact can be liberating. Apple transformed its business once it had redefined its market from personal computers to personal electronic devices, and Intel saw a similar step-change once it changed its playing filed from memory chips to microprocessors. What is the playing field on which you wish to participate?
     
  3. How You Win. The second supporting wing of the arrowhead is deciding how you will win. You have five generic options: you can be a product leader (Nike, BMW, Apple), a cost leader (Ryanair, Aldi, Primark), a convenience leader (McDonalds, Tesco, Dell, Amazon), a service leader (Singapore Airlines, John Lewis), or a solutions leader (IBM, McKinsey). The key point is that you must choose. Although you need to be good enough on all five, you must choose the dimension on which you wish to dominate your particular playing field. Each of the five leadership options carries with it certain trade-offs. McDonalds, for example, have chosen not to have the very best burgers in order to have widespread distribution, and Singapore Airlines' commitment to service means that it cannot offer the low fares of some of its rivals. Which of the five leadership options should your business pursue?
     
  4. Agenda For Action. The shaft of the arrow is your agenda for action, comprising a handful of key objectives that will deliver your #1 goal, create your playing field and enable you to lead and win. The agenda should not be a long list of initiatives, but a short list of themes and objectives that you can communicate across your business over the life of your strategy. For ten years, for example, Tesco pursued four objectives: (1) To grow the core UK business; (2) To be a serious international retailer; (3) To be as big in non-food as in food; and (4) To grow retail services in all markets The projects behind these objectives changed over time - for instance retailing services focused on driving tesco.com in the late 1990s and early 2000s, but has since delivered Tesco Direct, Tesco Mobile and Tesco Bank - but the objectives stayed the same, providing the ongoing focus to support the company's bigger goals and strategy. What are the handful of objectives that will best deliver your strategic ambitions?

By focusing on these four key questions and building your own strategy arrow, you will not only 'know it when you see it', but you can also create a compelling, focused and coherent strategy to deliver new growth for your organisation.




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Stuart Cross
Morgan Cross Consulting
Tel: +44(0)1636-526111
www.morgancross.co.uk
www.crosswiresblog.com

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