Over the coming Months, I’ll be publishing a series of blogs, modestly titled: “Strategy Fundamentals”.
This is why.
Strategy can be done dull
I love strategy – for me, its real-life problem solving at its best, taking something complex and messy and making it simple, clear and compelling. Building collective understanding within an organisation and turning it into something useful and meaningful. Amazingly, not everyone feels the same way.
Many years ago, I was at a family wedding. It wasn’t quite ‘Four Weddings and a Funeral’ style, but not far off. Early in the day I was being interrogated by an elderly distant relative – let’s call her Aunt Mathilda for the purposes of this blog. After a couple of minutes of warming up by disapproving of the groom’s shoes and tutting at the weather, she asked me what I was doing these days. Right, I thought, this will impress her “I’m leading a strategy team for a major international bank” I served up. A look of pity crossed her face as she smashed a cross-court winner “Oh. Oh dear. Poor you.”
Aunt Mathilda is in good company, lots of people don’t like the idea of what Strategy is, something that feels dry and overly theoretical, hung up on process and box-ticking and divorced from their day to day experience and the real challenges they face.
It doesn’t have to be like this, and nor should it be.
Strategy Needs to be Simple
At its heart, and in principle, Strategy is enormously simple. It’s only when you lose sight of that it becomes complicated. But it’s worth reminding ourselves of its fundamental simplicity from time to time, to make sure we focus on answering the most useful questions and spend our time on the tasks that add the most value and insight.
The simplicity arises from focusing on the only two Strategy questions that really matter:
– What do we want to be?
– What are we going to do?
There are of course lots of other secondary questions that underpin those ones and underpinning “What do we want to be?” are two more:
– Where do we want to compete?
– How do we want to compete?
Assuming we are a shareholder owned business focussed on making profit and creating economic value for our owners and employees, the single most important further question that underpins “Where” and “How” will we compete, is “Where’s the Money?”.
Phrased a little more elegantly, this might be “Where’s the personal or business need… that potential customers will be prepared to pay us to address … at a volume and margin that works for us… that we can credibly meet”.
The centrality of understanding “Where’s the Money” is one of the reasons that at Whitecap we spend a great deal of time on client projects conducting market assessments – looking at customer need, pockets of growth, competitor activity & performance, market size and spend – and (because we’re all strategic and that) – understanding the likely direction(s) of travel.
The real value of knowing what you want to be 1, 2, 3 or 5 years in the future, is that it gives you a much better chance of making good decisions right now. Investment decisions; how to allocate current resources; hiring decisions; commercial judgements; sales and marketing focus, etc. Not only are individual decisions better, but collectively all your decisions are more likely to pull in the same direction – we see a lot of organisation whose last three or four big decisions look as though they could have been made by entirely different businesses.
If more of the people around you also have the same understanding of what you want to be, the decision-making load can also be shared effectively – the challenge of growing businesses to empower their management teams is massively eased if this coherent view exists across the organisation.
Most of the organisations we work with have an opportunity, or a problem, or a question with the word ‘growth’ in it. The reason strategy matters is, put simply, if you have a well-conceived strategy you stand a much better chance of accelerating your growth and delivering a better return on your investments than if you don’t.
I find myself, somewhat improbably, feeling all evangelical about communicating the building blocks of strategy in a way that connects them to real business opportunities and problems.
Given the centrality of “Where’s The Money?” to most if not all commercial enterprises, the next instalment, will focus on this.
Aunt Mathilda – this is for you.
Hopefully you‘ve found this article useful. If you feel that your strategic planning would benefit from independent review and challenge, and would like to have a no obligation discussion, please get in touch with us here.
Established in 2012, Whitecap Consulting is a regional strategy consultancy headquartered in Leeds, with offices in Manchester, Milton Keynes, Bristol and Newcastle. We typically work with boards, executives and investors of predominantly mid-sized organisations with a turnover of c£10m-£300m, helping clients analyse, develop and implement growth strategies. Also, we work with clients across a range of sectors including Financial Services, Technology, FinTech, Outsourcing, Consumer and Retail, Property, Healthcare, Higher Education and Professional Services, including Corporate Finance and PE.