Negative space

The key question that can turbo-charge your strategy

In business we talk a lot about ‘strategy’ but what does that term really mean, is it important to have one and how would you know if you had the right one anyway?

The answer to the middle question is that it is definitely important to have a strategy - some kind of ‘north star’ to help you make decisions. In most businesses, most of the time, there are far more things that we could do than we could ever possibly execute well, and so the art of leadership is often an exercise in narrowing down a long list of possible choices to the shorter list of things you are actually going to try to accomplish.

In that sense, we can think of a strategy planning exercise as doing 2 quite distinct things. On the one hand, it will throw up some ideas about what is important for our business, but on the other it will, if well executed, also provide us with a kind of ‘filter’ that we can apply from day to day to make sure that as much of the effort in our businesses as possible is focussed on what really matters.

My experience, however, is that businesses often put much more effort into the first part of that process than the second.

Coming up with a strategic plan is exciting. It is a forward thinking, outward-looking exercise which makes for more interesting meetings than reviewing last month’s VAT return. We get to take some time to ask, and debate, important questions:

• What are the technological trends in our market and how are they changing?

• Are customers’ attitudes to our category also evolving - are they using our products in different ways or drifting away from using them altogether?

• What are our comparative advantages over our competitors and how do we take maximum advantage of them?

• Conversely what strategies might our competitors follow and if we ‘game’ that out then what is our best course of action?

Any one of these would have an MBA class salivating and they make a terrific and energising break from the humdrum of the day to day. Certainly, if you don’t find some time each year to ask these questions of yourselves as a leadership team you are doing something wrong.

Done well, these questions can point you to areas of your market where you are under-performing your potential, and which therefore represent opportunities for growth. They can also point to practical ways that you can evolve your business to exploit new technologies (like AI and Large Language Models for example). And they can highlight competitor weaknesses where you might be able to grab some market share.

The danger for any leadership team, however, is that the output of that exercise just becomes a list of yet more things to do in an already over-stretched business. Even more calls on the IT team to investigate those new technologies. Another set of objectives for the Commercial team to launch new products or services. A new territory to expand into for already tired Operations teams.

That is a tell-tale sign that you’ve achieved the first goal of a strategy process - the well thought-through set of ideas for the future - but not achieved the second - your strategy is not acting as a filter to help you narrow down your options.

Here, then, is the question I always ask when a team presents their strategy work:

“What does this strategy tell us we should NOT do?”

That’s often a difficult question for the team to answer, but it is well worth digging into. If it is important that we launch a new product perhaps we need to retire some old ones. If we are going to start addressing the needs of a customer segment where we have a growth opportunity, are there other customer segments we should be focussing on less? If we going to explore a new technology, should we remove some old ones?

In the real world, businesses generally don’t want to stop things. Someone has been working on that thing for years, we have real skills in that area, there might be some negative feedback from customers from stopping it.

But the harsh reality is that 5 things done really well will usually top 25 things done in a half-baked way. And so it is important to be clear about what our strategy say is on the to-do list, and what isn’t.

This is a particular challenge, I think, for Boards of Directors and senior teams. It is too easy whenever a topic comes up to take the middle ground. Should we follow a marketplace strategy? Should we investigate cryptocurrencies a bit? Should we expand internationally?

In each case, if your strategic work indicates that topic is not really a priority then the answer should be “no, we focus on what is important to us”. But there is a natural human fear of being wrong that makes it too easy instead to give the answer “it probably isn’t a priority but let’s have a small team work on it for a while”.

The trouble is that all those little non-priority projects end up as the grit in the system that means you either can’t get important stuff done or have a cost base which is far too high (or worse, both).

Take a moment, then, to think about what is happening in your business which, given your strategic focus, you should just stop doing. There is liberation to be found in the space that those decisions creates!

P.S.

As I write this post, retailers all around the country are working with their teams to try to be ready for any disruption, violence or looting which emerges from the thuggish rioting we’ve seen around the country. I wish everyone in the 3m strong retail family in the UK a peaceful and undisrupted few days.