Without any doubt, strategy is very important to any business.
What exactly is business strategy?
You’ve got a whole bunch of tools that you can use to do strategy, these include: SWOT Analysis; Porter’s five forces, Value Chain Analysis and so on.
In fact, there’s a whole number of them but a strategy often relates to setting up what your vision is and how you’re going to achieve that.
However, there’s something interesting that I most strategy planners miss out on which is really very important. And that is that strategy is often about what we are not doing.
Why is deciding what ‘not to do’ important for strategy?
Most companies and most businesses can come up with a strategy but what differentiates a successful business and a failing one is often the execution of that strategy. If execution fails, clearly the business is not going to get anywhere, even if strategies are clearly laid out beforehand. Often a strategy execution fails because those laid out strategies are often limited by the resources available – whether that’s time, money or people.
So as you dream up your strategy you often define how you are going to hit the market, decide that you want to target this segment, and who you’re going to address. Then, you see this other wonderful segment which you want to address too. However, you need to realize that you have the same amount of people or money or time to achieve all of that. Pick one clear approach and start with that, don’t take them all on at the same time.
Whenever you create your strategy, whenever you make a change in your strategy and say this is what I’m going to do. Have a second look and make a conscious decision about what you will not do. Shankar Meembat, TAB Facilitator for Milton Keynes, recalls his days in Nokia when the team decided that we would be releasing a second version of an app. Yes, there was a whole bunch of customers out there using the first version but it clearly had its problem and it wasn’t really scalable. The development team decided on a total redesign in the architecture so that they could get the system to become much more scalable. This was a great strategy. However, what it came down was that while the existing app needed to continue working – so it also needed its bug fixes and its customer support but the same team was also trying to develop the new app.
This approach often doesn’t work, because there are not infinite resources and Shankar and the Nokia team had to constantly delay the development of the second app until the product was given up upon completely.
So, in summary, if you’re creating or changing your strategy, always go back to say ‘this is what I’m not going to do.’