Strategy is the First Key to Sustainable Business Growth
In our Fall 2019 issue, business advisor Phil Symchych started a discussion on the ‘Six Keys to Sustainable Business Growth,’ which has inspired a series. In his first article of the series, he takes a look at strategy and what it means for your business.
Who are some of your favorite companies to deal with, both personally and in business? Why do you like them? What do they do better than the competition?
Personally, I enjoy visiting The Diplomat Steakhouse, Don’s Photo, Fresh Air Experience, and Jack’s OK Tire. In business, I get great service from KSP Technology, Source Office Furnishings, and WestJet. Why? Because they all know my name, know my preferences, and consistently have quality products and services. They also follow up to make sure I got the experience and results I wanted. How are you following up with your best customers?
In other words, they have a good strategy with a personal touch. That’s the best way for privately-held companies to compete—and win—against larger and on-line companies. Even WestJet, a large public company, is focused on great customer experiences. Their on-hold phone wait time is a couple of minutes at most, putting their competitor to shame, and saving me lots of time. How can you save your customers time?
Have you ever seen a successful company crash and burn? Remember Blockbuster, Eaton’s and Sears, and Kodak. Kodak, the film company, invented the digital camera but were too scared they would cannibalize themselves, so they didn’t implement. Others implemented the new technology and put Kodak out of business. What could you implement that would shift your industry?
Fear is not a good strategy. The status quo is not a good strategy. Dying companies blame their failure on foreign competition or the economy. The truth is these companies had a poor strategy.
The good news is that strategy is entirely within your control. Strategy development and implementation are, ultimately, management’s responsibilities.
First, my definition: strategy is the intentional focus and alignment of your resources to create measurable customer value. Next, your ability to implement your strategy depends on your relationship with your customers, your culture, and your courage.
Strategy Development and Implementation
Take four minutes to answer these questions:
- What is your strategy?
- How do your employees and customers describe your strategy?
- How effective are you at implementing strategy?
- How do you measure your strategy?
The four common strategy mistakes I’ve seen, and helped companies overcome, are:
The Four Strategy Mistakes
Lack of strategy.
A service company did not have a strategy. They were entirely reactive and grew organically by answering the phone and taking orders. Their customers were in charge of the strategy.
A manufacturer had a clear strategy but didn’t communicate it internally. The employees defaulted to doing their tasks and avoiding blame. There was no customer focus.
A service company had a strategy and communicated it to the team in methodology terms: “We fix stuff.” This reactive strategy ignored the important customer impact they could have had by being more proactive and measuring results. They fixed customers’ problems, but their customers had better choices; suppliers who prevented problems.
I’ve seen many companies where everyone is aware of the strategy, but there are no metrics to measure actual performance on the strategic priorities. No metrics means no focus or alignment.
The keys to a sustainable growth strategy are:
- Clarify how you help your customers improve their results. Focus externally on your customer. Put yourself in their shoes. What’s important to them?
- Quantify your impact on your customers’ results. What results do you create for them? This critical step is missing in most companies. Ask your customer how they measure your contributions and value. When you get these metrics right, you’ll generate higher margins and customer loyalty.
- Identify resources available, including internal best practices, which are often not recognized, codified, or shared. Don’t under-value your greatness.
- Foresee obstacles, anticipate problems and identify opportunities to help your customers increase their success. Think like a consultant, not a vendor.
- Measure performance on internal delivery efficiency and external customer value creation. Don’t ignore this step.
- Implement plans to leverage resources while overcoming obstacles and delivering results.
- Help your customers to increase their results, and you’ll also increase your results.
The Strategy Process
Strategy can be compared to a great recipe, where the intangible technique of combining tangible ingredients creates a unique and consistent outcome. An effective growth strategy creates a positive customer experience and outcome.
Developing and implementing—emphasis on implementing—a growth strategy that is focused on your customers’ results will give you a sustainable, differentiated, competitive advantage in any environment. Focusing on internal and external results will help you to build your business wealth.